Manual invoice processing is one of the most time-consuming tasks in finance and accounting. Extracting data from invoices, validating details, and updating records manually can lead to delays, errors, and inefficiencies.
With AI Builder and Power Automate, businesses can automate invoice processing, reducing manual workload, improving accuracy, and accelerating payments. This results in faster approvals, better compliance, and streamlined financial operations.
1. Why Automate Invoice Processing?
Processing invoices manually often leads to:
Delays in approvals and payments.
Errors in data entry, leading to compliance issues.
High costs due to labor-intensive processes.
AI-powered invoice automation solves these challenges by:
Extracting invoice details (vendor name, invoice number, date, amount, etc.).
Validating invoices against purchase orders and contracts.
Automating approvals and data entry in accounting systems.
Example: A finance team automates invoice extraction and validation, reducing processing time from hours to minutes.
2. How AI Builder and Power Automate Work Together
AI Builder’s Invoice Processing model uses machine learning and Optical Character Recognition (OCR) to:
- Extract invoice details from PDFs, scanned images, or email attachments.
- Validate extracted data against predefined rules.
- Automate workflows for approvals and payment processing.
Example: A vendor submits an invoice via email. Power Automate detects the attachment, AI Builder extracts the details, and the system automatically logs the invoice for approval.
3. Step-by-Step: Automating Invoice Processing with AI Builder
Step 1: Enable AI Builder Invoice Processing Model
1️⃣ Open Power Apps and navigate to AI Builder.
2️⃣ Select “Invoice Processing” under prebuilt AI models.
3️⃣ Click Use in Power Automate to start building an invoice automation workflow.
Step 2: Create a Power Automate Flow
1️⃣ Open Power Automate and create a new Automated Cloud Flow.
2️⃣ Select a trigger, such as:
- “When an email with an invoice arrives” (Outlook).
- “When a file is added to SharePoint” (for scanned invoices).
- “When an invoice is uploaded via Power Apps”.
3️⃣ Add an AI Builder action: Extract data from invoices.
4️⃣ Attach the invoice file (PDF, image, or scanned document) from the trigger source.
Step 3: Validate and Process Invoice Data
1️⃣ Use Conditions in Power Automate to check extracted data:
- If the invoice amount exceeds a threshold, send it for manual approval.
- If the vendor name is not recognized, flag it for review.
- If the invoice number matches an existing PO, approve it automatically.
2️⃣ Store extracted invoice data in Dataverse, SharePoint, or a financial system (like Dynamics 365, SAP, or QuickBooks).
Example: If an invoice amount is greater than $10,000, Power Automate sends an approval request to the CFO.
Step 4: Automate Approvals and Payments
1️⃣ If the invoice passes validation, send it for manager approval via Microsoft Teams or Outlook.
2️⃣ Once approved, trigger a payment process in ERP or accounting software.
3️⃣ Notify the vendor with a payment confirmation email.
Example: Once an invoice is approved in Power Automate, it automatically creates a payment record in QuickBooks and sends an email confirmation to the vendor.
4. Real-World Use Cases of AI-Powered Invoice Automation
Accounts Payable Automation
Challenge: Manually processing thousands of invoices each month.
Solution: AI Builder automatically extracts invoice data, and Power Automate routes it for approvals and payment.
Vendor Management
Challenge: Keeping track of invoices from multiple vendors.
Solution: AI Builder categorizes invoices by vendor and Power Automate updates records in Dataverse or ERP systems.
Compliance & Audit Readiness
Challenge: Ensuring all invoices are processed according to company policies.
Solution: Power Automate validates invoice details, and AI Builder flags invoices missing key information for compliance checks.
5. The Future of AI-Powered Invoice Processing
Upcoming Trends:
More Accurate Invoice Recognition – AI Builder models will improve in detecting handwritten and scanned invoices.
End-to-End Automation – AI-powered invoices will trigger auto-payments, ledger updates, and audit logs.
Smart Fraud Detection – AI will detect duplicate invoices, anomalies, and potential fraud.
Seamless ERP Integration – AI will directly integrate with SAP, QuickBooks, Oracle, and Dynamics 365 for real-time processing.
Businesses that adopt AI-driven invoice automation will see cost savings, faster processing, and improved compliance.