Microsoft Dynamics 365 is a popular ERP system with modules and automation to support various business processes, such as procurement and supply chain management. 

However, this system lacks depth in areas like procurement and purchasing, so it integrates with other business applications, such as purchasing software, to better support and streamline workflows. 

Our guide reviews Microsoft’s procurement software, covering its features, pros, and cons. Then, we explain how ProcureDesk integrates with Dynamics 365 to support procurement and accounts payable workflows.

What Does the Dynamics 365 Procurement Software Offer?

Microsoft’s procurement software is integral to the more extensive Dynamics 365 suite. It offers an array of tools and functionalities to optimize procurement processes, give teams better structure, and enhance efficiency. The software also includes various spend analysis reports to provide transparency into company spending and improve cost savings. 

Key features of Microsoft Dynamics 365 include:

• Vendor management: Centralized platform for tracking vendor information and performance.

• Automated purchase order generation: Streamlined digital creation and tracking of purchase orders.

• Spend analysis reports: Provides insights into purchasing patterns, identifies potential cost-saving areas, and tracks actions related to vendor payments.

• Seamless integrations: Interacts with other Dynamics 365 Supply Chain Management modules and third-party applications.

• Compliance & risk management: Tools for adhering to industry standards and identifying risks proactively.

These capabilities are a great starting point for many companies, but many teams need a more convenient and controlled purchasing solution as their organizations grow.  

For example, you might need to link to multiple vendor websites and implement a curated marketplace. Or, you might need a mobile app to create and track purchase requests.

That is where the product falls short — and solutions like ProcureDesk come into play. 

Three Challenges with Microsoft Dynamics 365 Procurement Software

The three main downsides teams report with Dynamics 365 procurement software are:

• It doesn’t support or streamline the actual purchasing process, and teams have to follow manual purchase order processes.  

• It doesn’t offer punchout catalogs. 

• It doesn’t offer optical character recognition (OCR) to automate invoice matching. 

Downsides of Manual Purchase Order Processes

• Inefficiency. Manual purchase order processing is challenging for users of Microsoft Dynamics 365’s procurement software. 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 make errors more likely. Mistakes can occur at various stages, including order entry, verification, or 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 increase, the system can become overwhelmed, leading to bottlenecks, wrong forecast assumptions, and inefficiencies.

Cons of No Punchout Catalogs

• Limited supplier integrations. Punchout catalogs are essential for businesses, as they provide real-time product data directly from a supplier’s system. Without this capability, companies miss the latest product updates, price changes, or availability statuses.

• 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 make it difficult to effectively track spend and order history.

• Manual catalog maintenance. The absence of punchout catalogs means that procurement teams must manually update product data, prices, and other relevant details, lengthening the procurement cycle and potentially leading to outdated or incorrect data.

Drawbacks of Not Having OCR or Automated Invoice Matching

• Manual data entry. Without OCR, someone must manually enter invoice data into the system — this takes more time and leaves room for potential inaccuracies.

• Delayed reconciliation. Manually matching invoices to POs and receipts can delay reconciliation, which might result in delayed payments. This can affect supplier relationships and cause you to incur late fees or penalties.

• Higher operational costs. The absence of automated OCR capabilities necessitates additional manpower to manage, verify, and reconcile invoices, which can significantly increase operational costs and reduce the efficiency of the accounts payable department.

Benefits of Integrating a Purchasing System with Dynamics 365

The main reasons why teams supplement Dynamics 365 with purchasing software are: 

• It gives employees with a streamlined shopping experience. They can browse approved vendors, view budgets, build carts, complete requisitions, and submit them for review in one workflow — eliminating the need to switch platforms or enter data manually.

• It reduces errors in purchase order processes. Integrating a purchasing system with Dynamics 365 allows teams to work in tandem in real-time. If you update information in one platform, the changes are reflected in the other. The software can automatically cross-check and validate entries; in cases where PO changes are necessary, the integrated system ensures that all revisions are recorded, approved, and synchronized. 

• It offers more transparent order tracking. Track POs from when they’re sent until packages arrive at your desk. This visibility also lets procurement teams catch order delays before they can lead to potential issues (like stalling projects). 

• It includes more robust expense reporting — by combining procurement software and Microsoft Dynamics 365 Supply Chain Management data. This aids in performance analysis, understanding key performance metrics, monitoring KPIs, and highlighting areas for potential improvement.

• It automates vendor invoice matching and supports accounts payable processes, saving teams countless hours and reducing costs. Automation allows focus on invoices needing troubleshooting, such as mismatches or incorrect amounts, and helps safeguard against fraudulent invoices.

How ProcureDesk Supports Microsoft Dynamics 365 to Improve Purchasing Processes

ProcureDesk is a procure-to-pay platform designed to integrate seamlessly with Microsoft Dynamics 365. 

Our system combines procurement management and AP automation to wholly support purchasing processes. It communicates with Dynamics 365 to automatically transfer master data, POs, and invoices between systems, improve budgeting and spend management, and streamline payment workflows. 

You can read more about our integration here.

Below, we’ll briefly explain how ProcureDesk supplements Dynamics 365.  

Creating a Controlled Purchasing Hub 

First, ProcureDesk lets procurement teams create a controlled purchasing hub to simplify and support this process. 

Users can access ProcureDesk and see all the vendors they can shop with and their available budgets. They shop with vendors securely within our platform, browsing items and building shopping carts. Then, they send carts for review in ProcureDesk and our system automatically reviews and routes orders.

There are three steps to creating your shopping hub: 

1. Connect vendor catalogs. We offer 200+ punchouts — with popular sites like Amazon, Costco, Sam’s Club, Thermo Fisher Scientific, Grainger, Uline, Staples, and more. Our team can also help you create custom catalogs. 

2. Set budgets. You can import budgets from Dynamics 365 (this can be controlled by the chart of account, department, or a combination of any fields) or set these in our system. We provide various ways to control spending by vendor, spend category, department, individual, project, etc. 
   
   We’ll walk you through budgeting tools during onboarding, help you set budgets, and show you how to make adjustments. 

3. Design approval trees. These tell ProcureDesk how to route requisitions and streamline this process. The system can check budget availability, automatically approve or deny certain types of orders, and ensure PRs reach the right reviewer. 

You can also design custom purchase request forms to gather key information about orders, including their necessity, associated projects or departments, and to support the review process. 

Forms populate when users submit shopping carts, showing them what fields they must complete before they can route requests for review.  

ProcureDesk Punchout Catalogs

Punchouts enable employees to have a convenient online shopping experience. Instead of copying and pasting data from different sites, employees can build shopping carts with the items they want, and the data is automatically copied into ProcureDesk.

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

When an employee logs in to the system, it presents them with all the preferred vendors they can purchase from, including Amazon.

Once the user clicks on the Amazon logo, the system automatically opens your Amazon business page. 

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

The system then copies the data from the user’s Amazon cart and creates a purchase requisition in ProcureDesk. Remember, the purchase requisition will display any fields the user must complete before routing orders for review. 

Here’s an example of how that looks: 

There are three key benefits to using punchouts: 

• The user doesn’t need to remember login credentials for each vendor account. They can shop with all vendors via ProcureDesk and are authenticated with SSO during login. 

• 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.

• You can limit vendors for different procurement categories.

ProcureDesk Custom Procurement Catalogs 

In cases where vendors don’t offer punchouts, you can create custom, internally hosted catalogs. 

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

Requesters can view available products, build carts (with items from one or multiple vendors), and then complete the purchase requisition form. 

From there, our system takes over to review and route orders. 

Automated Approvals for Purchase Order Processes 

The manual approval process is cumbersome because:

• Requests are typically managed via email, but emails get lost, or approvers forget to review orders in a timely fashion, which leads to delays and wasted time chasing approvals.

• Purchasers don’t always know who to send their requests to and have trouble remembering the approval hierarchy. 

ProcureDesk solves these problems by automating the approval process. 

You can set up approval trees, specifying which orders need approval and who will approve them. Multi-step approval flows automatically route orders through the review process as they receive approval. 

Here’s how the process works:

• Setup: The admin configures the approval workflow and purchasing policy, considering authorization levels based on job titles.

• Evaluation: The system evaluates each purchase request and routes it for approval according to the pre-defined conditions.

• Notification: The approver receives a notification for approval.

• Approval: The requester can track their request and send reminders for pending approvals.

We provide omnichannel approval tools, allowing users to review and approve requests via ProcureDesk desktop or mobile apps, email, or Slack. 

Automatic Purchase Order Creation 

After requisitions are approved, ProcureDesk converts them into new purchase orders and automatically dispatches them to the vendor. 

You can design branded POs from our template gallery, including your logo and customizing the appearance and format. Our system also lets you add custom fields, terms and conditions, and personalized messages to POs. 

ProcureDesk sends POs via email, cXML, EDI, or vendor portal. 

Improved Order Tracking & Receipt Management 

ProcureDesk improves PO tracking with vendor acknowledgments, advanced shipping notices (ASN), and a receipt management module. 

Order Acknowledgements 

Vendors can comment directly on POs to acknowledge receiving orders and share any pertinent updates. 

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

Advanced Shipping Notices (ASN)

Vendors can provide expected ship dates and share tracking numbers after fulfilling and sending orders. Tracking numbers are stored in ProcureDesk so you can track the delivery status. 

Once orders are delivered, purchasers receive an email update and reminder to verify receipt details.

Receipt Management 

ProcureDesk prompts users to verify order details and upload a photo of their product receipt or packing slip to confirm purchases. This way, everyone knows what was delivered and if there were any problems with the delivery. 

Users can upload receipts through both desktop and mobile apps. The mobile app is designed for warehouse teams and purchasers, like contractors or construction managers, who are often on the go.

This module makes it easy to double-check purchases for accuracy and provides a convenient place for users to share issues with orders. 

Instead of typing emails to the procurement or AP team, users can record order discrepancies directly in our system, allowing the appropriate managers to access the data for troubleshooting. 

Our system also lets users upload serial or asset numbers for improved asset tracking and inventory management.

ProcureDesk’s Invoice Matching & Automated Invoice Processing 

ProcureDesk offers end-to-end support for accounts payable workflows, reducing invoice processing time by 45% and significantly minimizing errors that can lead to issues such as incorrect or duplicate payments. 

Here’s how our vendor invoice management system works: 

1. Invoices are automatically imported to ProcureDesk via e-invoicing, portal, synced AP email inbox, or physical uploaded paper invoices.  
   
   
2. Our system uses OCR to identify order headers, line items, invoice numbers, and other data. 
   
   
3. It then matches the invoice with the correct purchase order and available receipt.

If a receipt is not available for a three-way match, the system informs the appropriate purchaser and asks them to create a receipt. Once the receipt is added, the system will re-match the documents, and if everything aligns, the invoice will be marked ready for payment.

Our system pushes matched invoices to Dynamics 365 for final payment management.

The invoice status updates in both our system and Dynamics 365 once payment is sent.

ProcureDesk<>Microsoft Dynamics 365 Integration 

We offer native integration with Dynamics 365 and free white-glove onboarding to customize and configure ProcureDesk to your needs.

This seamless connection ensures real-time syncing of all master data from Microsoft Business Dynamics to ProcureDesk, including your chart of accounts, suppliers, payment terms, dimensions, and other necessary details for creating purchase orders and invoices in ProcureDesk. 

Purchase orders and invoices created in ProcureDesk are automatically copied to Dynamics 365 without manual intervention.

Our procure-to-pay system supports purchasing processes and streamlines invoice matching.

Dynamics 365 manages payment processes and includes advanced modules to enhance supplier relationships, supply chain management, spend analysis, and risk and compliance management.

Getting Started

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

While Microsoft Dynamics 365 offers solid native procurement functionalities, expanding businesses often require more refined capabilities. Solutions like ProcureDesk address these needs and seamlessly integrate with Dynamics 365, ensuring a harmonious flow of information and a streamlined purchasing process.

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