OCR 501 – Invoice Processing Showdown: D365 Finance Invoice Capture vs. ISV OCR Solution (ISVs) – Which is Right for Your Business?
Introduction
Selecting the right invoice automation tool can revolutionize your accounts payable process. In this detailed comparison, we examine the strengths and weaknesses of Dynamics 365 Finace’ native Invoice Capture versus an ISV OCR Solution. From cost and functionality to support and customization, discover which tool best fits your business needs. Whether you’re handling standard invoices or complex multi-line transactions, this guide will help you choose the solution that optimizes your AP process and maximizes ROI. Don’t miss out on this essential read!
OCR Technology
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
|---|---|---|
| OCR Technology | Built-in AI-based OCR engine for extracting invoice data from documents. Uses AI Builder for OCR to digitize and process invoices | Uses ISV OCR technology for more accurate and mature OCR capabilities |
Customization & Flexibility
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
|---|---|---|
| Customization | Offers two models (Standard AI and Custom AI) with decent level of customization. Normally covers ‘Must have’ business requirement. | Highly customizable and configurable to specific business needs and complex invoice scenarios |
| Vendor-Specific Adaptation | Custom AI Model allows for vendor-specific learning with training up to Minimum of 20 documents. | Strong vendor-specific recognition due to the ability to learn specific formats across many document types |
| Training and Setup | Custom AI Model requires data training for optimal performance, Standard Model is pre-trained. Stright forward setup out of the box. | Minimal data training is required. Requires setup and configuration from IT, partners and ISV provider |
Accuracy & Performance
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
|---|---|---|
| Accuracy | Varies depending on the AI model (Standard or Custom) and requires training for high accuracy. Accuracy scored is provided and can be linked with Reviewal condition and or by individual vendor or group of vendors. | Generally higher accuracy due to ISV OCR engine and extensive document recognition capabilities. Most Lake accuracy score feature |
| Machine Learning | Machine learning capabilities are readily available, particularly with the Custom AI model, which continuously improves over time as it processes more invoices. The Standard AI model is pre-trained by Microsoft using a vast array of documents in various formats, languages, and from different countries, ensuring it is always learning and evolving. | Uses AI and machine learning for document learning, and adapts due to ISV technology |
Integration with D365 Finance
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
|---|---|---|
| Integration with D365 Finance | Fully integrated into D365 Finance as part of the standard offering with seamless workflow | Integrates with D365 Finance, but requires installation and configuration as a third-party solution |
| User Interface | Uses the standard D365 Finance UI for invoice capture and processing | Typically has its own interface for certain OCR tasks but integrates with D365 Finance for other operations i.e. processing invoices. |
Workflow Automation & Exception Handling
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
|---|---|---|
| Workflow Automation | Standard invoice workflow capabilities for reviewing, approving, and posting invoices. Limited field to trigger workflow | Provides ISV workflow automation with robust features for routing, approvals. More fields are available to trigger workflow i.e. Purchase pool. |
| Exception Handling | Exception handling for manual review of invoice errors or missing data. Reviewal can be send to Procurement or other responsible individual for reviewal and transferring invoices | ISV exception handling, allowing users to set up business rules and logic for managing exceptions and errors. User might need a license to reviewal i.e. Procurement team |
Complexity Handling
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
|---|---|---|
| Support for Complex Invoices | Can struggle with complex layouts or niche industries unless using a well-trained Custom AI model | Handles complex invoices (e.g., multiple line items, taxes, custom fields) with greater ease |
| Document Types Supported | Primarily designed for vendor invoices and may require customization for other document types | Can handle a wider range of document types beyond just invoices (e.g., purchase orders, credit memos) |
| Country wise documents | Standard modelled is trained and can handle different country and invoice types. Customer model can be created and training to achieve specific need. Three invoice type available i.e. PO, PO header and Cost invoice. | Many provided multiple countries format out of the box. Might require customisation to develop new that is not available of box. |
Cost
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
|---|---|---|
| Cost | Included in D365 Finance subscription, but Custom AI model may have additional setup costs | Additional licensing and implementation costs are involved due to being a third-party solution |
| License Cost | Invoice Processing fee: D365 Finance and Supply Chain customers entitled with 100 Invoices trans per tenant/month. Additional transactions around £230 for 1K transactions/tenant/month. Capacity is use it or leave it monthly. Power App license per user: £15.10 per user/month Azure Data Lake Storage subscription: attached with Dataverse storage. Sufficient for most customers. | Invoice Processing user: typically, between £10 to – £15month Invoice Approval App and D365 connector app: Typically, between £4k and £5K per Year OCR Header and Lines processing: Typically, between £4K – £6K per year OCR document storage: £200 to £500 per year Update Service Cost: Additional cost per ISV from MSFT partner (Check with your Microsoft Partner) Defect Management Cost: As per agreement with MSFT Partner support contract |
Implementation & Maintenance
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
|---|---|---|
| Feature | Invoice Capture (Native in D365 Finance) | ISV OCR Solutions |
| Implementation Time | Quick deployment with the Standard AI model; more time required if using the Custom AI model | Longer setup time compared to native solutions due to its ISV features, but performance |
| Ongoing Maintenance | Microsoft maintains the Standard AI model, but Custom AI model requires reviewing and monitoring | Requires dedicated resources for maintenance and updates but offers extensive control and customization |
Conclusion
Both Invoice Capture in D365 Finance and Advanced OCR Solutions offer powerful tools for automating invoice processing, but they serve different business needs. Invoice Capture is a cost-effective and fully integrated solution, ideal for organizations with straightforward invoice processing needs and a desire for quick deployment. It works best for businesses that rely on the standard functionality within D365 Finance and have moderate volumes of invoices with less complexity.
On the other hand, Advanced OCR Solutions excel in handling more complex, high-volume invoicing scenarios. With greater accuracy, robust customization, and advanced exception handling, these solutions are better suited for companies that require more sophisticated workflows, vendor-specific adaptations, and the ability to process a wider variety of document types. However, they come with higher costs and longer implementation times due to their third-party nature and more complex setup.
Ultimately, the choice between these solutions depends on your company’s specific needs for invoice automation, budget, and scalability requirements. For standard operations, Invoice Capture is often sufficient, but for businesses seeking higher levels of customization, accuracy, and control, investing in Advanced OCR Solutions may deliver greater long-term value.
Microsoft is continuously enhancing the Invoice Capture functionality, so we can expect to see advanced invoice processing with ISV-like capabilities in the near future.
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