Microsoft Dynamics 365 Procurement Software Integration

Are you using Microsoft Dynamics 365 procurement software and desire a better procurement process?

Microsoft Business Dynamics is a complete ERP software that helps you gain robust automation in the various aspects of your function. Still, it is a general-purpose software like other ERP software like SAP and Oracle.

These solutions are designed to cover the breadth of a business’ functions and supply chain management, not necessarily the depth of each solution area. You can get the basics of procurement function, but if you want advanced capabilities, you must use an add-on that works with Microsoft Business Dynamics.

In this article, we will cover a step-by-step process to enhance the capabilities of Microsoft 365 procurement software for your customized solutions. We will achieve this by walking you through how to use add-ons like ProcureDesk to enhance the procurement experience.

Let’s get started!

What Is Microsoft Dynamics 365 Procurement Software?

Microsoft Dynamics 365 Procurement Software is an integral component of the larger Dynamics 365 suite, specifically designed to enhance and streamline an organization’s procurement operations. At its core, it offers businesses comprehensive tools and functionalities to optimize their procurement processes, ensuring transparency, efficiency, and cost savings. Key features include the following:

• Vendor Management: Centralized platform for tracking vendor information and performance.
• Automated Purchase Orders: Streamlined digital creation, approval, and PO tracking.
• Spend Analysis: Provides insights into purchasing patterns, highlighting potential cost-saving areas and any action that may relate to payment with vendors.
• Seamless Integration: Interacts smoothly with other Dynamics 365 Supply Chain Management modules and third-party applications.
• Compliance and Risk Tools: Ensures adherence to industry standards and proactive risk identification.

These capabilities are a great starting point for many companies, but you need a simpler employee experience as your organization grows.

For example – you might need the ability to link to multiple vendor websites and implement a curated marketplace.

Or you might need a mobile app for creating and tracking purchase order requests.

That is where the product falls short, but you can enhance the capabilities of Microsoft Dynamics by using a product like ProcureDesk.

Improving Microsoft Dynamics 365 Procurement Software With ProcureDesk

ProcureDesk is a procure-to-pay platform designed to integrate seamlessly with Microsoft business dynamics. We will use ProcureDesk as an example, but you can use any software that works with Microsoft. We want to help you understand the features of ProcureDesk before you move on to any of your software purchases.

The focus of this section is to show you how you can improve the purchasing experience for your employees.

Streamlined Purchase Requisitions

Microsoft doesn’t offer purchase request capabilities natively. However, you can add on to enable purchase requests in Microsoft Business Dynamics.

You can enable purchase requisition lines, leaving you with a poor employee experience.

Employees need to know the exact product or service they are purchasing, or you need to create every item in the item database, which is a time-consuming task. Imagine if to have created 10’0’s of items every month, and most of them you might purchase again.

That is where ProcureDesk can help with your purchase requisition review.

The system provides two easy ways to improve the employee experience.

Using Punchouts

Punchouts enables an online shopping experience for your employees. Instead of copying and pasting data from different sites, you can set up an easy process where employees can choose what they want, and the data is automatically copied into ProcureDesk.

Let’s take an example of a purchase from Amazon.com.

An employee logs in to the system, presenting them with all the preferred vendors they can purchase from, including Amazon.

The user must click on the Amazon logo, and the system automatically redirects the user to your Amazon business page. There is no need to log in or password sharing.

The user then chooses the items they need to purchase and clicks “Submit an item for approval.”

The system then copies the data from Amazon and adds it back to the user cart. It is that simple.

Here is an example of how it looks in ProcureDesk:

This approach has the following benefits:

1. The user doesn’t need to remember the username and password for their accounts.
2. The data is copied with the latest price, which reduces the chance that the vendor will reject a purchase order due to incorrect pricing information.
3. You can limit what vendors should be used for different categories.

Using Catalogs

Although the punchout catalog is preferred, it is not always possible because the vendor might not have the appropriate technology infrastructure.

That is where you can find an alternate approach: internally hosted catalogs.

Internal catalogs and vendor catalogs offer the same experience for your employees, but instead of navigating a website, you are navigating through a catalog created in the purchasing system.

Here is how an internal product catalog can improve the purchasing experience for your employees.

Once the request fills in the purchase details, the next step is to review and send it for approval.

Budget Checks In Real-time

One of the challenges for the finance teams is ensuring you have a purchase budget.

Most companies don’t have a process for proactively checking the budgets, leading to over-budget scenarios.

To avoid that, you can proactively check the budget before purchasing.

The system allows you to set up a process for proactive budget checks.

All you have to do is upload your existing budget into the system. You can then control who can use that budget for purchase.

This can be controlled by the chart of account, department, or a combination of any of those fields.

The system then checks the budget availability, and if an adequate budget is available, the employee can proceed with the purchase. If not, you can route the request for further approval.

The approvers can also see the complete budget usage before approving the purchase. This way, they can approve with confidence.

Here is an example of how the approvers review the budget before approval:

Approver view of the budgets

Automated Approval In The Purchase Order Workflows

The Approval process is cumbersome for many reasons. There are many reasons for that:

• One, the approvals are done via email. Emails get lost, or the approvers forget to do the approval on time. This leads to delays and multiple hours spent chasing approvals,
• The second reason is that the employee doesn’t know who must approve the purchase. It is a guessing game because they don’t always remember the approval hierarchy.

Both these issues can be resolved by automating the approval process using a system like ProcureDesk.

Here is how it works:

• The admin sets the approval workflow by configuring the purchasing policy in the system. Think about authorization levels based on the job titles.
• Once the approval workflow is configured, the system evaluates every purchase request and then routes it for approval based on the pre-defined conditions.
• The approver then gets a notification for approval.
• The requester can track their request anytime and send reminders for pending approvals.

There are multiple ways an approver can approve the purchase request:

• Approve using the email notification. There is a link for the approval in the email; you can approve without needing to log in to the system.
• Approver can use the mobile app to do the approvals or use the web application to manage the approvals.

Here is an example of approvals using the mobile app:

Mobile app for approvals

Automated PO Generation And Dispatch

Do you spend time generating and sending purchase orders to vendors?

That is a time-consuming process, and you can eliminate that by automating the purchase order generation and dispatch process.

The system provides multiple templates that you can pick and choose from. Here is an example of a purchase order generated by the system:

You can add custom fields on the purchase order, terms and conditions, or any other necessary fields.

After the purchase order is generated, the system automatically sends the purchase order to the vendor.

ProcureDesk supports the following methods for sending the purchase order:

• Email
• cXml
• Vendor Portal
• EDI format

Order Tracking Capabilities

Do you feel your purchase orders go into a black hole after the PO is sent to the vendor?

It doesn’t have to be that way.

Here are some ways the system can help you better track purchase orders.

Order Acknowledgment Process:

With this purchase process, you can request a vendor acknowledge that they received the purchase order. This serves as a confirmation of the receipt and allows the vendor to confirm the shipping dates.

For example, if a purchase order is back-ordered, the vendor can inform the buyer and provide an updated date.

This helps you proactively work with vendors on delayed shipments.

The vendor can send the order acknowledgment to an email, or you, the vendor, can use the portal to provide that information during the procurement procedures.

Here is an example of order acknowledgment:

Purchase order acknowledgment

Tracking Shipping Status:

After the vendor ships the quality product, you must continuously track the delivery status across multiple vendor websites to be aware of your direct and indirect procurement status.

This is time-consuming; you can use ProcureDesk to track the delivery status.

With the automated order tracking capabilities, the system keeps track of product delivery through transit.

When the product is delivered, the order contact gets a confirmation that the product has been received.

No need to continuously check the status of the delivery during the purchase process.

Creating Receipts To Track Delivery

Once the product is delivered, a goods receipt note is created.

It serves two purposes:

1. Everyone knows what was delivered and whether the item was delivered in full.
2. Second, were there any problems with the delivery, for example – damaged products?

You can upload serial or asset numbers for better asset tracking and inventory control.

A receipt can be created using a mobile app or web application.

The mobile app makes it easy to create a receipt, especially for the warehouse team, because they are not always on their desk. Thus making your purchase order management easier.

Here is an example of how a receipt looks in the system:

Matching Purchase Orders With Invoices

Manually matching invoices with purchase orders in Business Dynamics is a pain!

You must first figure out the appropriate purchase order number and then find the specific lines against which to match the invoice. This will help you gain better purchase order management for your business.

In case of missing receipts, you have to chase people to have a receipt created.

All this can be automated using ProcureDesk. Here is how it works:

1. The invoice is automatically imported into the system from your AP email inbox. Alternatively, you can ask the vendors to submit invoices using a supplier portal.
2. Once the invoice is received, the system runs through an OCR (Optical character recognition) process. That allows the system to identify the purchase order number and the invoiced lines on any invoice.
3. The system then uses this information to match the invoice with the purchase order and any available receipt.
4. If a receipt is not available for a 3-way match process, the system informs the appropriate person and asks them to create a receipt.
5. After the receipt is created, the system matches the document again, and if all matches correctly, the invoice is marked ready for payment.

It is that simple!

Here is an example of a purchase invoice in ProcureDesk:

 

Integration With Microsoft Dynamics

If a purchasing system doesn’t integrate with Microsoft, you must manually create purchase orders and invoices in your ERP system.

That negates any default values added that you received by using automation in a third-party purchasing system.

That‘s why ProcureDesk provides native integration support for Microsoft.

Here are the things that are automated with Microsoft:

• All the master data is automatically synced from Microsoft Business Dynamics to ProcureDesk. That includes a chart of accounts, suppliers, payment terms, dimensions, and other additional information you need to create the purchase order and invoices in ProcureDesk.
• After the purchase order and invoice are successfully created in ProcurDesk, they are automatically synced without manual intervention.

Challenges With Microsoft Dynamics 365 Procurement Software

Here are some common challenges with using the native functionality of Microsoft Dynamics.

Manual Process For Purchase Orders

• Inefficiency: One of the challenges faced by users of Microsoft Dynamics 365’s procurement software is the manual processing of purchase orders. In today’s fast-paced business environment, automating such critical operations is crucial for efficiency and reducing human errors. Manual processes require more time, leading to potential delays in order processing and delivery schedules.
• Increased Error Rate: Manual data entry and processing mean errors are more likely. Mistakes can occur at various stages, including order entry, verification, or even during approval. These errors can lead to incorrect orders, additional product costs, and strained supplier relationships.
• Scalability Concerns: As a business grows, so do its direct and indirect procurement needs. Manual processes might be manageable for small volumes, but as the number of purchase orders rises, the system can become overwhelmed, leading to bottlenecks, wrong forecast assumptions, and inefficiencies.

No Punchout Catalog Capabilities

• Limited Supplier Integration: Punchout catalogs are essential for businesses as they provide real-time product data directly from a supplier’s system. Companies miss the latest product updates, price changes, or availability statuses without this capability.
• Impaired User Experience: Users are forced to navigate away from their procurement system to the preferred supplier’s website for product details, leading to a disjointed user experience. This can also make it difficult to track spend and order history efficiently.
• Increased Procurement Cycle: The absence of punchout catalogs means that procurement teams need to manually update product data, prices, and other relevant details, lengthening the procurement cycle and potentially leading to outdated or incorrect data.

No OCR Capabilities For Invoice Matching

• Manual Data Entry: Without Optical Character Recognition (OCR) capabilities, all invoice data must be manually entered into the system. This not only takes more time but also leaves room for potential inaccuracies.
• Delayed Reconciliation: Manual matching of invoices to purchase order lines can delay the reconciliation process. This might result in delayed payments, which can affect supplier relationships and may incur late fees or penalties.
• Higher Operational Costs: The absence of automated OCR capabilities necessitates additional manpower to manage, verify, and reconcile invoices. This can significantly increase operational costs and reduce the efficiency of the accounts payable department.

Benefits Of Using Procurement Software That Integrates With Microsoft Dynamics

So why implement a purchasing system that works with Business dynamics? Here are some of the benefits to make you understand how it can help you with your processing capabilities:

Better Employee Experience

An integrated procurement software solution combined with the robust capabilities of Microsoft Dynamics 365 Supply Chain Management ensures a seamless experience for employees as they work on improving supply chain management for your business. This integration means they no longer have to toggle between different systems or manually enter data, leading to increased efficiency and less frustration.

Reduced Errors And Purchase Order Changes

With integration, there’s a single source of truth in business processes. Data entered or modified in one system is automatically updated in the other, ensuring consistency across platforms and reducing the chances of discrepancies.

The software can automatically cross-check and validate entries against predefined parameters or past data. This minimizes the chances of human errors, such as duplicate entries or incorrect values.

In cases where purchase order changes are necessary, the integrated system ensures that all revisions are recorded, approved, and synchronized across platforms, maintaining a clear and auditable trail.

Better Order Tracking

Optimizing your integration options with Microsoft Dynamics 365 Supply Chain Management gives businesses real-time monitoring of order status and supply chain management,  ensuring better direct delivery requests and other payment processing actions.

Having a centralized work list, your team can ensure that any potential issues or delays can be promptly addressed. With comprehensive metrics, you gain real-time budget visibility so you can understand your processing capabilities.

It allows for detailed order tracking and expense reports, combining procurement software and Microsoft Dynamics 365 Supply Chain Management data. This aids in performance analysis, understanding key performance metrics, monitoring of KPIs, and highlighting areas for potential improvement.

Automated Invoice Matching Along With Purchase Orders

An automated invoice matching process automatically matches vendor invoices with corresponding purchase orders and packing slips, ensuring that payment processing is made only for received goods or services.

Automated matching can significantly reduce the time and resources traditionally spent on manual reconciliation, translating into direct cost savings for businesses.

Automated invoice matching also acts as a safeguard against fraudulent vendor invoices. Any discrepancies between invoices and purchase orders are flagged for review, ensuring businesses don’t overpay or fall victim to scams.

Conclusion

The procurement landscape is evolving rapidly, and organizations need advanced tools to meet their growing demands, ensure customer satisfaction, and bring in customer wins.

Microsoft Dynamics 365’s native procurement functionalities provide a solid foundation, but as businesses expand and require more refined capabilities, there is a clear need for enhanced tools and box integrations.

Solutions like ProcureDesk address these advanced requirements and seamlessly integrate with Microsoft Dynamics, ensuring a harmonious flow of information and a streamlined purchasing process.

By embracing such integration options, organizations can drive efficiency, reduce errors, streamline order tracking, and automate invoice matching, resulting in a more effective, accurate, and user-friendly procurement experience.

Don’t let manual processes and inefficiencies bog down your direct procurement, indirect procurement, and supply chain management operations. Using cloud-based purchasing system, you gain a 360-degree view on your spending status, spending operations, and company usage of resources.

Explore integrated software solutions and their power to bring you robust automation. Harness the full potential of your Microsoft Dynamics system’s comprehensive suite to help with your company’s purchasing decisions.