Welcome to the

Business Central Matrix

You’re processing invoices when you feel something isn’t quite right. It’s a tiny flicker on your screen. You blink. Suddenly, the same invoice appears twice. You tell yourself it’s nothing. It’s just a glitch; that weird feeling of déjà vu.

But deep down, you know it’s not déjà vu. It’s a glitch in The Business Central Matrix—Microsoft has updated your Business Central environment with its second attempt to deliver AP automation.

Now you’re probably asking yourself the obvious question…

Is the Payables Agent the right choice for our organization?

The short answer is: it depends. The Payables Agent for Business Central is an encouraging first step toward AP automation “for the masses.” Like any first-generation release, however, it has gaps and other shortcomings you should know before considering it for your organization’s AP automation needs.

Future updates to the Payables Agent

Note: The analysis below and our recommendation for the Payables Agent are current as of 2025 Release Wave 1, BC v26.5. We will update this analysis as Microsoft updates the Payables Agent in the future.

We expect Microsoft to address at least some of the major gaps in the Payables Agent in the coming months (and years) to make it a more realistic entry-level solution for a broader swath of the Business Central customer base. If Microsoft has announced specific enhancements, we have noted it below and provided a link to the release plan notes.

Do you want the blue pill or the red pill?

For months, Microsoft has promoted the Payables Agent as a breakthrough in processing invoices. The story is enticing: a frictionless world where AI handles the drudgery of accounts payable, freeing your team to focus on tasks more mission-critical than data entry. It’s neat, polished, and reassuring.

If you’ve seen The Matrix, then you know the opening sequence revolves around Keanu Reeves’ character, Neo. Neo has a nagging feeling that the world he sees around him isn’t real. He chases online rumors, keeps odd hours, and can’t sleep. He doesn’t know what he’s looking for, only that something is “off” and that he’ll recognize it when he sees it.

That’s when he meets Morpheus. Morpheus offers Neo a choice.

This is your last chance. After this, there is no turning back. You take the blue pill – the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill – you stay in Wonderland, and I show you how deep the rabbit hole goes.

In the case of the Payables Agent, you can take the blue pill and stay inside the illusion. Every invoice is clean, every vendor follows the rules, and every field gets extracted without error. Everything looks efficient. Everything feels automated. Everything appears to work.

But in your heart of hearts, you know this kind of fantasy land can’t be reality. As Morpheus explained to Neo, “something is wrong with the world. You don’t know what, but it’s there like a splinter in your mind, driving you mad.”

Here’s our “blue pill” overview of the Payables Agent process

Below we will walk you through the Payables Agent process at a high level and give you links to the “red pill realities” you should know about at each step in the process. Or Take the Red Pill- Click Here for the "Red Pill Realities"

Capturing inbound email messages

The Payables Agent in Microsoft Dynamics 365 Business Central automates the intake of vendor invoices received by email. It continuously monitors a dedicated Microsoft 365 mailbox set up for accounts payable and imports unread messages in the background. This ensures every invoice received at the monitored address is captured consistently and added to the processing queue. Each new email and its PDF attachment(s) is processed automatically to identify invoices that require additional processing.

Storing PDF files and email messages

The Payables Agent relies on the Business Central database to save each PDF email attachment, whether it is an invoice or some other type of document such as vendor instructions, a vendor statement, a proof of delivery, etc. Each PDF received by the Payables Agent corresponds to an Inbound E-Document record. You can access a list of every PDF file the Payables Agent has saved by navigating to the Inbound E-Documents list. The Inbound E-Documents record stores the original link to the corresponding email message in Microsoft Exchange.

Extracting invoice header and line data using Azure Document Intelligence

The data extraction phase uses Azure Document Intelligence, Microsoft’s AI-powered optical character recognition (OCR) service. The system identifies key header-level fields (vendor name, invoice number, invoice and due dates, subtotals, taxes, totals, and currency) and line-level fields (item descriptions, quantities, unit prices, and tax amounts). This information is mapped directly to the appropriate fields in Business Central to provide the necessary data to create a draft purchase invoice that will become a Purchase Invoice record and eventually a Posted Purchase Invoice record.

“Human in the loop” review of the Payables Agent’s output

For organizations relying on the Payables Agent, Microsoft has introduced what it calls a “human-in-the-loop” review process—a safeguard to ensure that users can review, correct, and approve invoices before they are finalized. In practice, this process splits across two separate user experiences inside Business Central: the Copilot Task List and the Inbound E-Documents page.

Copilot Task List

The Copilot Task List surfaces pending invoice tasks generated by the Payables Agent—essentially, drafts that need human attention before posting. From this list, users can open each invoice record, review the AI-extracted data, make corrections, and confirm whether the invoice should proceed to posting. The interface mimics the workflow of a to-do list. The experience is oriented toward confirming suggestions from the Payables Agent, not managing the full invoice lifecycle.

Inbound E-Documents

The Inbound E-Documents page represents the back-end layer of the same process. It serves as the repository for all incoming vendor documents, including those automatically fetched from the Agent’s dedicated inbox. Each record appears with a processing status—Received, Processing, Created, or Error—reflecting where it stands in the ingestion pipeline. Users can drill into these entries, correct mapping errors, and manually trigger the creation of purchase invoice drafts when the Agent fails or produces incomplete results.

Creating the draft purchase invoice

After extraction and validation of the data Business Central needs to create an invoice record, the Payables Agent creates a draft purchase invoice record in Business Central. This draft record includes the captured header and line details and organizes them into the familiar invoice layout—header, lines, and totals.

Each field in the invoice draft remains editable so users can review or refine the data as needed. The end result should be a ready-to-finalize draft invoice that reflects both the extracted information and any user adjustments completed during review.

Coding invoice lines with AI-assistance

The Payables Agent uses AI-assisted line coding to suggest a general ledger (G/L) account, item, and dimensions based on historical invoice data. Users can view reasoning tooltips for each suggestion, verify coding that is accurate, and correct any coding that is incorrect.

Over time, corrections should improve the Payables Agent’s coding suggestions.

Future enhancement announced by Microsoft: More context for AI coding

In a public preview to be released in November 2025, Microsoft has indicated that a future release will enable the Payables Agent to analyze “more information to determine the context and similarity of historical invoices and how that compares to the invoice currently being processed.” Microsoft offers the following example: “an electrician bill requires a different G/L account if the delivered electrician service is for a manufacturing asset in the manufacturing facility, not for putting up new lamps in the office building.”

Finalizing the draft invoice

Once all required data is reviewed, the user finalizes the draft, converting it into an open purchase invoice within Business Central. The finalized record includes a link to the stored invoice PDF, maintaining a direct relationship between the transactional record and its source document.

After you finalize and post purchase invoices, those posted results become training signals that the Agent uses the next time it sees a similar invoice.

Do You Want to take Red Pill Now?

💊 Red Pill Realities: Extensibility, Cost, and Other Important Constraints of the Payables Agent

💊 Red Pill Realities: The Document Capture Constraints of the Payables Agent

💊 Red Pill Realities: The Hidden Risks of How the Payables Agent Stores Documents

💊 Red Pill Realities: The Truth About Data Extraction and Verification with the Payables Agent

💊 Red Pill Realities: Where Exceptions, Coding, and Approvals Break Down

Our current recommendation

The Payables Agent for Business Central is an encouraging first step toward AP automation “for the masses.” Like any first-generation release, however, it has gaps and other shortcomings you should know before considering it for your organization’s AP automation needs.

We believe there may be a small subset of Business Central customers that might benefit from the Payables Agent in its current form. In our view, this subset of organizations conducts its entire business within a single company in Business Central and has a low volume of non-PO invoices with uncomplicated layouts and a limited number of lines. They also must have a willingness to separate and process PO-based invoices manually.

By “low volume” we mean around 10-15 invoices per day. By “limited number of lines,” we mean 10 or fewer lines on an otherwise uncomplicated invoice layout. By an “uncomplicated invoice layout” layout we mean a clean, system-generated PDF (not scanned) from a known vendor with clear invoice/date/total/tax boxes, one currency, and one tax rate/amount. Invoice layouts become “complicated” when descriptions wrap onto multiple lines, prices or totals appear on a continuation row, or sub-charges (e.g., fuel, freight, or special fees) sit indented beneath a parent line. Other layout complications can occur when columns “drift” such that quantity, unit, price, or currency appear to sit under the wrong header.

Note:

Our recommendation for the Payables Agent is current as of 2025 Release Wave 1, BC v26.5. We will revise our recommendation as Microsoft updates the Payables Agent and we have the opportunity to test these updates.