Invoice approvals are one of those processes people notice only after something goes wrong. A vendor invoice sits unapproved. Payment is delayed. A team member is stuck trying to follow up. These are real productivity problems that cost real money.
In a growing business, invoices arrive fast. Departments want speedy approvals. Finance needs control. Without proper management, things fall through the cracks. That is exactly why you should know how invoice approval works inside Dynamics 365 Business Central (BC) and how to manage it in a way that supports growth, clarity, and financial discipline.
So, this article walks you through what, why, and how of invoice approvals in the Business Central platform.
Let’s get started!
What is Invoice Approval in Dynamics 365 Business Central?
Invoice approval in Dynamics 365 Business Central refers to the process of checking and approving vendor invoices before they are posted or paid. This helps to confirm whether the invoices are fair and align with the company’s internal policies.
Whenever an invoice is entered on the Business Central platform, it can be automatically sent to the manager or higher authorities you set up for review. The person responsible checks whether the name, account, and other attached documents are accurate. Only after approval can the invoice move forward for posting and payment.
In this way, businesses can manage their operations easily and reliably. Because no invoices can be posted silently, or nothing is approved without a record.
How Can Businesses Benefit Business Central’s Invoice Approval Procedures?
Approving invoices can be easier when you’re a startup with fewer purchases. However, growing businesses need proper invoice management. If you still manage and approve invoices through email or chat, it won’t work out for the long term.
Here’s the reason why you need a Dynamics 365 BC to organize the invoice approval process:
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You can easily see which invoices are waiting for approval. Instead of searching through scattered messages or chats, all pending approvals can be seen in one organized view.
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Approvers can get a clear picture of what to review and when. So, they can prioritize their approval.
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As a business owner, you can create a traceable and fair report for audits and investor verifications.
In summary, your payments will be highly accurate. So, you can manage your cash flow and operate your business with ease.
How To Assign Invoice Approvals on Business Central?
Not every invoice requires the same level of review. You can decide who approves each one based on simple factors such as:
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Invoice amount.
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Department or cost center.
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Vendor type.
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Project or location.
For example, a small office supply bill might need only a team lead’s approval. A large capital purchase might require a finance manager review.
Why this matters: If your rules are too rigid, approvals slow down. If they are too loose, high-impact invoices get poor oversight. The goal is to balance control with speed.
A good practice is to assign a backup approver in case the primary reviewer is unavailable. This prevents you from being blocked if someone is on leave.
Who Should Be Set as an Approver?
Approvers should be people who:
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Understand how the cost is classified.
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Can check and confirm supporting documents.
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Know the impact on the budget and cash flow.
Don’t make the mistake of assigning approvals based on convenience. The right approver is someone with context and authority.
In Business Central, you can support:
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Direct approvers
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Approval hierarchies
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Delegation rules
This keeps the invoice moving even when someone is out of the office.
Purchase Invoice vs Purchase Order Approval in BC
Business Central supports approvals for both:
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Purchase Orders.
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Purchase Invoices.
Knowing this difference is important.
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Purchase Order approval ensures spending is approved before the purchase happens.
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Purchase Invoice approval confirms the final billed amount before payment.
In many businesses, both are used together. The purchase orders are first approved, and invoices are subsequently matched with them. When an invoice is similar to a purchase order that has been approved. So, there will be a faster and more reliable approval process.
Key Details to Check Before Approving an Invoice
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The approver must check the vendor details to ensure that the invoice is fair.
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He/She needs to audit whether the amount and taxes mentioned on the invoice are accurate.
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Needs to ensure that the invoice matches the purchase order or receipt
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The person must check if there are any supporting documents attached to the invoice as proof of a specific expense.
When BC is integrated with invoice capture tools, some of this review work becomes easier because data is extracted and matched before it reaches an approver.
How Dynamics 365 BC Manages Rejected Invoices
Whenever your approval team rejects an invoice, Dynamics 365 Business Central will:
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Lock posting actions so the specific invoice cannot move forward.
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Returns the invoice to the requester within the same system.
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Stores the approver’s comments alongside the invoice.
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Retains the full approval history, including timestamps and users.
The user can fix the mistakes and resubmit the invoice easily. Business Central treats this as a continuation of the same process, not a new request.
This process removes unnecessary confusion from the approval processes. With Business Central, invoice rejections are easy to understand. You will immediately notice the cause of each rejection, and there will be no misunderstanding or the necessity to request approvers to provide more information. In this way, you can save time and plan for future things to improve your business.
What to Measure for a Better Approval Workflow?
To keep your process healthy, track:
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Approval turnaround time.
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Rejected invoice count.
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Delay trends by department.
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Batch vs. one-by-one approvals.
By looking at these insights, you can find where the process isn’t working well and make better rules.
Improvement takes time, but steady, small changes make a real difference.
Final Thoughts
Invoice approval isn’t about slowing things down. It’s about ensuring money moves with clarity and control.
Dynamics 365 Business Central gives you a system that supports that goal. When you manage approval workflows well, you get:
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Faster invoice processing.
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Clear accountability.
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Better compliance.
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A stronger financial foundation.
So, Microsoft Dynamics 365 Business Central is a tool that is highly needed for every business that is looking to scale its operations efficiently.