How to Activate and Configure the Payables Agent in Dynamics 365 Business Central

Accounts payable is often one of the most manual and error-prone areas of finance. Invoices arrive in email inboxes, get downloaded, renamed, and keyed into Business Central by hand. This creates delays, introduces errors, and increases processing costs. For finance teams trying to close the books faster or improve vendor relationships, these inefficiencies can be costly.

As organizations grow, so does invoice volume. What might have been manageable for one AP clerk quickly becomes overwhelming, leading to late payments, missed early payment discounts, and compliance risks. Business Central’s Payables Agent was designed to solve this exact problem by automating the intake and drafting of vendor invoices.

This guide explains what the Payables Agent is, why it matters, and how to activate and configure it. We will also cover Inbound E-Documents, best practices, and troubleshooting so you can confidently roll this out in your organization.

What is the Payables Agent?

The Payables Agent is part of Microsoft’s Copilot and AI Agents suite in Dynamics 365 Business Central. Its purpose is to reduce the amount of manual work needed to process vendor invoices. Instead of requiring AP staff to manage invoice emails and type data into Business Central, the agent takes responsibility for the initial steps.

It monitors a designated mailbox where vendors send invoices. Every email received is imported, and each PDF attachment is converted into an entry in Inbound E-Documents. From there, the agent uses Azure Document Intelligence to extract key information such as vendor name, invoice number, amount, and date. When it finds a match to an existing vendor, it drafts a purchase invoice. If no match is found, the agent suggests creating a new vendor, which is automatically set to Blocked until approved by finance.

In practice, this shifts the AP team’s role from data entry to quality control. Instead of re-keying invoices, they review exceptions, validate extracted data, and decide whether to approve new vendors.

In short, the Payables Agent:

Captures vendor invoices directly from a monitored mailbox.
Imports PDF attachments into Inbound E-Documents (one entry per PDF).
Uses AI to extract invoice data with confidence scoring.
Matches invoices to vendors or proposes creating new ones.
Drafts purchase invoices for supervisor review.
Keeps new vendors blocked until formally approved.

By combining automation with supervisor oversight, the agent accelerates invoice processing while maintaining compliance.

Key Benefits

Automating AP is not just about efficiency. Manual invoice handling often hides deeper risks, such as duplicate payments, unauthorized vendors, and lost discounts. Each invoice may only take a few minutes to enter, but across hundreds or thousands of invoices, those minutes add up to hours of lost productivity and significant cost.

The Payables Agent directly addresses these pain points.

Faster invoice processing: Invoices go from inbox to draft purchase invoice in minutes, shortening cycle times dramatically.
Improved accuracy: By using AI to extract and map invoice details, the agent reduces the risk of human error.
Compliance and control: Vendor creation is blocked until approved, ensuring no payments are made to unverified suppliers.
Scalability: AP teams can handle higher invoice volumes without increasing headcount.
Supervisor oversight: The agent manages routine processing while supervisors focus on exceptions and approvals.

Together, these benefits free up AP staff to focus on higher-value tasks like vendor relationships, cash flow management, and compliance reporting.

Prerequisites

Before activating the Payables Agent, make sure the following are in place:

Licensing: Available in production environments starting with Business Central 26.3. Premium licensing is recommended.
Feature Management: Enable Copilot and AI agent capabilities under Feature Management.
Dedicated mailbox: Create a mailbox exclusively for vendor invoices (for example, apinvoices@yourcompany.com). Assign ownership to Business Central and prevent Outlook access. Because the agent imports all emails from this mailbox, it should not be shared with other agents or users.
Inbound E-Documents: Enable this framework, which serves as the staging area for captured invoices.
Vendor approvals: Configure approval workflows to ensure new vendors remain blocked until vetted.
Sandbox testing: In sandbox environments, enable Allow HttpClient Requests in Extension Management to test the Payables Agent.
Language support: Validated and supported in English. Other languages may work but are not officially supported.

With these prerequisites complete, you are ready to activate the agent.

How to Activate the Payables Agent

Step 1. Enable Copilot and Agents

Go to Feature Management and confirm that Copilot and Agent capabilities are enabled. Without this step, the Payables Agent will not appear in your environment.

Step 2. Set Up a Dedicated Mailbox

Create a mailbox dedicated to AP invoices. Assign Business Central ownership and disable Outlook access. Communicate this address to vendors to centralize invoice submission.

Step 3. Activate the Payables Agent

In the search bar, type Copilot & Agents. Select Payables Agent and switch the toggle to Active.

Step 4. Verify Capture

Send a test invoice PDF to the mailbox. Confirm that it creates an entry in Inbound E-Documents and that a draft purchase invoice is generated for review.

Working with Inbound E-Documents

The Inbound E-Documents page is where automation and human oversight intersect. Every PDF attachment the agent processes creates an entry here.

Once imported, the system applies Azure Document Intelligence to extract invoice data and assigns confidence scores. Supervisors review the entries, focusing attention on low-confidence fields. If multiple PDFs are attached to one email, the agent creates one entry per attachment, ensuring each invoice is tracked separately.

Supervisors can:

Correct vendor names, invoice numbers, and amounts.
Link invoices to existing vendors or request new vendor creation.
Reclassify or discard duplicates and irrelevant files.
Approve and forward validated invoices into draft purchase invoices.

This ensures that invoices are processed quickly but always validated before entering the financial system.

Configuring the Payables Agent

Once activated, configuration fine-tunes the agent to your organization’s needs.

Email monitoring: The agent imports all emails, not just those with PDFs. Supervisors must manage irrelevant or misdirected emails.
Vendor matching: The agent uses invoice history, mapping tables, and AI models to match vendors. Supervisors step in when the match is uncertain.
Vendor creation: New vendors are automatically created in a blocked state, requiring approval before they can be used.
Invoice drafting: Drafts are prefilled using AI and vendor history. Supervisors review, adjust if necessary, and finalize.
Posting and approvals: Drafts flow into Business Central’s standard posting and approval processes, ensuring compliance with internal controls.

Best Practices

A few best practices can maximize success:

Use separate mailboxes per agent: Never share mailboxes between Payables Agent and Sales Order Agent.
Whitelist vendor domains: Reduce irrelevant emails and ensure clean data capture.
Start with a pilot group: Onboard a handful of vendors before scaling across all suppliers.
Train supervisors: Ensure AP staff understand how to use Inbound E-Documents and interpret confidence scores.
Review exceptions regularly: Audit unknown document types and recurring errors to improve accuracy over time.

These practices help balance automation with oversight, giving your finance team both speed and control.

Troubleshooting

Even with the right setup, issues can occur. Common ones include:

Agent not visible: Check Feature Management and confirm you’re in a supported environment.
Emails not processed: Verify mailbox ownership and ensure Outlook is not connected to the mailbox.
Invoices not captured: Remember, only PDF attachments are processed. Files must be 5 MB or smaller and 10 pages or fewer.
Vendors not found: Supervisors can instruct the agent to create a new vendor, which will remain blocked until approved.

Most issues trace back to mailbox setup, feature toggles, or vendor matching.

Can I test the Payables Agent in sandbox?

Yes. In sandbox environments, enable Allow HttpClient Requests in Extension Management to test the agent.

Does it support multiple companies?

Yes. Each company can configure its own Payables Agent with a designated mailbox.

Which file types are supported?

Only PDF attachments are processed, up to 5 MB and 10 pages. Other files are ignored.

Which languages are supported?

The Payables Agent is validated in English. Other languages may work but are not guaranteed.

Reduce Manual Workload and Speed Up Processes

The Payables Agent represents a new era of accounts payable in Business Central. By taking over routine invoice capture and draft creation, it reduces manual workload, speeds up processing, and strengthens compliance. Supervisors remain firmly in control, validating exceptions and vendor approvals before invoices reach the G/L.

The key to success lies in pairing automation with strong governance: dedicated mailboxes, trained supervisors, and vendor approval workflows. With these guardrails in place, the Payables Agent can deliver real efficiency gains and help finance teams scale without sacrificing control.