Optimizing Financial Operations with Microsoft 365 Copilot for Finance in Excel

OPTIMIZING FINANCIAL OPERATIONS WITH MICROSOFT 365 COPILOT FOR FINANCE IN EXCEL

CONTENT Introduction Microsoft 365 Copilot for Finance: Key components Customer Reconciliation with Microsoft 365 Copilot for Finance in Excel Conclusion

INTRODUCTION

As organizations strive for greater efficiency in financial operations, AI-driven capabilities play a key role in enhancing decision-making and reducing manual effort. Microsoft 365 Copilot for Finance extends AI into ERP systems, enabling finance teams to streamline workflows and improve data accuracy.

This article focuses on Microsoft 365 Copilot for Finance in Excel, highlighting its role in automating data reconciliation, generating reports, and providing actionable insights. Building on the previous discussion of vendor reconciliation, this article broadens the scope to cover data reconciliation from a more comprehensive perspective.

Let's get started.

MICROSOFT 365 COPILOT FOR FINANCE: KEY COMPONENTS

Microsoft 365 Copilot for Finance consists of two key components:

• Microsoft 365 Copilot for Finance in Excel – Designed to automate financial data reconciliation and generate reports with insights.
• Microsoft 365 Copilot for Finance in Outlook – Enhances email-based financial processes (covered in a separate article).

Using these features requires a Copilot license and Copilot Finance Agent setup.

By integrating with ERP systems, Copilot for Finance Agent helps finance teams make informed decisions faster while minimizing manual effort. Embedded within everyday productivity tools, it enhances efficiency by automating routine tasks and delivering AI-driven insights where they are needed most.

The primary use case explored in this article is customer reconciliation using the data reconciliation feature of the Copilot Finance Agent. This capability automates data comparison, identifies discrepancies, and generates reports for streamlined financial analysis.

MICROSOFT 365 COPILOT FOR FINANCE IN EXCEL INSTALLATION

Navigate to the Dynamics 365 Finance homepage and select Copilot for Finance (Preview).

Choose Install Microsoft 365 Copilot for Finance (Preview) in Excel.

Click Get it now to initiate the installation.

Once installed, Copilot for Finance (Preview) will be available in Excel.

DATA RECONCILIATION PROCESS

Microsoft 365 Copilot for Finance in Excel simplifies financial reconciliation through below flow:

• Export relevant financial data
• Combine relevant exported data
• Auto categorize and align data
• Review and adjust column assignments
• Generate data reconciliation report
• Investigate discrepancies

CUSTOMER RECONCILIATION WITH MICROSOFT 365 COPILOT FOR FINANCE IN EXCEL

Customer reconciliation ensures that transactions recorded in subledger align with ledger transactions. This is an internal reconciliation. Microsoft 365 Copilot for Finance in Excel streamlines this process by automating data comparison, identifying discrepancies, and generating reconciliation reports with minimal manual effort.

This section demonstrates how to perform customer reconciliation using the data reconciliation feature of Copilot for Finance in Excel.

Step 1: Exporting Customer-Related Financial Data

To begin, export the necessary financial data from Dynamics 365 Finance. Two key datasets are required:

• Customer Posting Profile Transactions
• Customer Transactions

Let's export the relevant financial data.

Extracting Customer Posting Profile Transactions

Navigate to General ledger >> Inquiries and reports >> Voucher transactions.

Enter the account numbers related to customer posting profiles and specify a date range.

Review the filtered results and export all rows.

Download the excel file.

Rename the worksheet as Voucher Transactions.

Extracting Customer Transactions

Second relevant data is customer transactions. 

Navigate to D365FO table browser and find CustTrans table and filter customer transactions the specified date range.

Review the filtered data and export all rows.

Download the Excel file.

Rename the worksheet as CustTrans.

Step 2: Combining Data in Excel

Once both datasets are extracted, combine them into a single workbook.

Open the Excel file containing Voucher Transactions

Insert the CustTrans worksheet into the same workbook

Ensure that both datasets are structured properly before proceeding with reconciliation

Step 3: Running Data Reconciliation with Copilot for Finance in Excel

Next section is about the Copilot for Finance in Excel.

Click the Copilot for Finance (Preview) icon in Excel.

Select Reconcile data.

The system will automatically recognize the first worksheet (Voucher Transactions).

Click + Add to include the second dataset (CustTrans).

Select CustTrans worksheet.

Review the auto generated column mappings and ensure correctness.

Click Keep to confirm the mappings.

Step 4: Executing Reconciliation Analysis

Click reconcile data to initiate the analysis.

Copilot for Finance will compare transactions, highlight discrepancies (if any), and generate a structured reconciliation report. If no differences are detected, the system confirms that all customer transactions are aligned with financial records.

Expand the Insights section to review additional analysis details and ensure financial data integrity.

CONCLUSION

Automation reduces manual reconciliation efforts, allowing finance teams to focus on exception handling rather than routine data comparison. AI-driven analysis enhances accuracy, ensuring that financial records align with customer balances. Streamlined reporting improves audit readiness, providing clear visibility into transaction consistency.

By leveraging Microsoft 365 Copilot for Finance in Excel, organizations can enhance the efficiency, accuracy, and reliability of customer reconciliation, strengthening financial governance and compliance. 

Full account reconciliation along with insights will be possible in the near future via Account reconciliation agent workspace that will be released very soon.

Purchase Order Re-approval in Dynamics 365 Finance and Operations

 

PURCHASE ORDER RE-APPROVAL IN DYNAMICS 365 FINANCE AND OPERATIONS

This article provides detailed information about purchase order re-approval process in Dynamics 365 Finance and Operations. Re-approval logic triggers additional approval process in case changing selected field values on the purchase orders.

Let's get started.

CONTENT Introduction Solution components Demo Conclusion

INTRODUCTION

The purchase order (PO) workflow is a widely used IT Application Control (ITAC) in Dynamics 365 Finance & Operations (D365FO), especially for SOX-compliant organizations. Its primary purpose is to ensure internal approval before processing purchase orders. 

This article examines whether purchase orders must go through workflow approval when created under specific scenarios, such as:

• Firming a planned purchase order
• Releasing an approved purchase requisition (PR)

The answer is no. If the purchase orders are already required, additional approval is unnecessary.

Planned purchase orders are system-generated based on demand signals, reviewed, and approved before being converted into actual POs. If no further procurement team approval is needed after PO is created, then the firming process should be designed accordingly.

Purchase requisitions (PRs) must go through a workflow approval process, typically starting with a department manager and continuing through additional levels based on total cost and signing limits. If the resulting POs do not require additional approval, the PR approval process should be configured with this in mind.

However, if a created PO is touched and changed, it should be subject to a re-approval process. This article explains how to configure the system to bypass PO approval when originating from PRs or planned orders while ensuring re-approval when modifications occur.

SOLUTION COMPONENTS

Change management activation: Enable change management for POs by setting the Activate change management option on the Procurement and sourcing parameters. When change management is enabled, POs must go through an approval workflow after they've been completed.

Navigate to Procurement and sourcing >> Setup >> Procurement and sourcing parameters.

Activate the change management.

When change management is enabled, POs move through six approval statuses, from Draft to Finalized. After an order has been approved, users who want to modify it must use the Request change action. In this case, the approval status is changed back to Draft, and PO can be modified. After changes are done, PO can be submitted for re-approval. The field changes subject to re-approval is configured using a Re-approval rule for purchase orders policy on the Purchasing policies.

Purchasing policy setup: The re-approval rule within purchasing policies is an optional rule that defines the criteria for requiring re-approval when a purchase order is changed. The selected fields are evaluated in the purchase order workflow when the "Requires purchase order re-approval" condition is set up in the workflow.

Navigate to Procurement and sourcing >> Setup >> Policies >> Purchasing policies.

Select the policy and click on it.

Select 'Reapproval rule for purchase orders' under the policy rules.

Then select the most recent policy on the right side of the screen.

The next screen is the most important one. This is where re-approval triggers are configured. The example below shows that when the total amount of any line is changed, the order will be routed to the approval process.

Workflow configuration: The final and crucial step in the purchase order re-approval process is configuring the workflow itself. To ensure that re-approval is triggered when necessary, the workflow must include a conditional decision to evaluate whether changes require additional approval.

Navigate to Procurement and sourcing >> Setup >> Procurement and sourcing workflows.

You can see a very basic workflow configuration for re-approval as below.

This workflow says that:

If re-approval is not needed (reapproval = no), follow the left path. In this case, the workflow is automatically approved upon submission.

If re-approval is needed, follow the right path. This triggers the actual approval process that the system follows.

The final step in the workflow configuration is to set this workflow as the default for purchase orders.

With the necessary solution components in place, the next step is to see how these configurations work in action. In the following demo, we will walk through the purchase order re-approval process in Dynamics 365 Finance and Operations, demonstrating how change management, purchasing policies, and workflow configurations come together to enforce re-approval when necessary.

DEMO

Scenario 1: Firming a Planned Purchase Order

• Firm a planned purchase order and confirm that no additional approval is required.
• Modify the purchase order by changing the total price via a change request and confirm that additional approval is triggered.

Scenario 2: Converting an Approved Purchase Requisition to a Purchase Order

• Convert an approved purchase requisition (PR) into a purchase order and confirm that no additional approval is required.
• Modify the purchase order by changing the total price via a change request and confirm that additional approval is triggered.

Scenario 3: Creating a Purchase Order Directly

• Create a purchase order manually and confirm that approval is required.
• Modify the purchase order by changing the total price via a change request and confirm that additional approval is triggered.

This articles demonstrates Scenario 2 and Scenario 3.

Scenario 2: Converting an Approved Purchase Requisition to a Purchase Order

Navigate to Procurement and sourcing >> Purchase requisitions >> Approved purchase requisition processing >> Release approved purchase requisitions.

Select the PR line that will be converted to PO.

Note that PR price is $900.

Convert PR to PO.

Note that created PO is in Approved status that doesn't require PO approval.

The second part of the scenario is making a change on the order that doesn't impact pricing.

Unlock the PO by requesting a change.

Assign a warehouse to the PO header.

Submit the order for workflow approval.

Note that order is automatically approved since the requested change doesn't impact the pricing.

The workflow approval history of the order is as below:

The workflow assesses "no need for re-approval" as 'True' and completes the process automatically.

Scenario 3: Creating a Purchase Order Directly

A brand new purchase order is created and click Submit to initiate the workflow approval process.

The system evaluates the "No need for re-approval" condition. Since this is a new PO, the system determines it as 'False', meaning the approval process must be completed.

The PO routes through the designated approval hierarchy. Once all approval steps are completed, the PO status updates to "Approved.

Open the approved purchase order.

Click Request Change to modify the document.

Add a new line.

Re-submit the PO to workflow.

The workflow is triggered again and routes the PO for approval.

The PO arrives in my approval queue for review.

Upon approval, the PO status updates to "Approved" again.

Let's make a small change that doesn't impact pricing.

Since this change does not affect the item price, quantity, or financial impact, the workflow automatically completes without requiring additional approval.

Let's also change the warehouse on the PO from 11 to 12.

Since this change does not affect the item price, quantity, or financial impact, the workflow automatically completes without requiring additional approval.

CONCLUSION

In conclusion, the purchase order change workflow is a key control for SOX compliance in Dynamics 365 Finance and Operations. Properly configuring change management, purchasing policies, and workflow conditions ensures that modifications to approved POs are subject to re-approval when they impact financial or operational integrity. This structured approach helps enforce accountability, prevent unauthorized changes, and maintain an auditable procurement process while aligning with compliance requirements.