The goal is to reduce manual effort, speed up approvals, and keep users informed without blocking their work.<\/p>\n
What This Blog Will Explain: <\/strong><\/p>\n This solution is built around a realistic end-to-end scenario:<\/p>\n Although the Invoice Approval Agent is built using Copilot Studio, it is designed to work in the context of invoice processing, not as a standalone chatbot.<\/p>\n In a real business scenario, users typically begin their work from an Invoice record in Dynamics 365. When an invoice is ready for approval, the user already has access to a standard SSRS-generated Invoice PDF, which represents the official invoice document shared with customers.<\/p>\n Now the Copilot Agent make it easy to approve invoice.<\/p>\n When a user opens an Invoice record in Dynamics 365:<\/p>\n To initiate approval, the user opens the Copilot Agent and selects the option Sample Invoice PDF :<\/strong><\/p>\n At this point, the Copilot Agent guides the user to upload the Invoice PDF document<\/strong>. Once the user submits a valid Invoice PDF to the Copilot Agent, the approval process officially begins.<\/p>\n At this point, the system immediately updates the Invoice Approval field on the Invoice record to:<\/p>\n In-Progress<\/p>\n This status change is important because it signals that:<\/p>\n The approval logic is now fully automated What Happens Inside the AI Approval Stage<\/strong><\/p>\n The first stage in the multi-stage approval is the AI Invoice Approval stage.<\/p>\n This stage is responsible for making fast, rule-based decisions using the structured invoice data extracted earlier by the custom prompt.<\/p>\n The AI stage receives:<\/p>\n Approve the invoice automatically if the subtotal is less than or equal to 1500<\/strong><\/p>\n The AI stage evaluates:<\/p>\n If both conditions are satisfied, the AI marks the invoice as Approved<\/strong>.<\/p>\n Result: AI Auto-Approval<\/strong><\/p>\n In the scenario shown:<\/p>\n Immediately after this decision, the system updates the Invoice record:<\/p>\n Invoice Approval \u2192 Approved Not every invoice can or should be approved automatically. In this scenario, a different invoice PDF is submitted where the subtotal exceeds the AI threshold. As a result, the AI stage does not approve the invoice.<\/p>\n Instead of failing or stopping the process, the workflow is designed to continue gracefully<\/strong>.<\/p>\n In the AI approval stage, the following configuration is used:<\/p>\n Because the invoice does not match the AI criteria:<\/p>\n At this point:<\/p>\n Manager Approval via Email<\/strong><\/p>\n Once the workflow reaches the Manager Approval stage:<\/p>\n This allows managers to:<\/p>\n The Manual stage is responsible for all human decision-making. The Condition stage in a multi-stage approval is optional, but it plays a very important role in deterministic routing.<\/p>\n Unlike the AI stage, which makes decisions based on reasoning, a Condition stage is used when:<\/p>\n When a Condition Stage Is Useful<\/strong><\/p>\n A Condition stage is typically used to:<\/p>\n In short: Conditions answer \u201cIF this, THEN that\u201d \u2014 without reasoning.<\/p>\n Below is a high-level overview of how Copilot and Agent Flow work together in the background to execute this multi-stage invoice approval process.<\/p>\n Custom Copilot Agent<\/p>\n Custom Copilot Agent Flow<\/p>\n Using Copilot Agents with multi-stage approvals transforms invoice processing into a smart, efficient, and reliable experience. By combining AI-based decision making with human approvals only when needed, organizations can reduce manual effort without losing control.<\/p>\n Most importantly, the entire process runs in the background, allowing users to continue their work while approvals happen asynchronously. This approach delivers a balanced, scalable, and enterprise-ready approval model.<\/p>\n AI invoice approval in Dynamics 365 works by using a Copilot Agent to process an uploaded SSRS invoice PDF, extract structured data (such as subtotal, tax, total, and invoice number), and pass it to an Agent Flow. The AI stage evaluates predefined rules, such as a subtotal threshold (e.g., \u2264 1500), and automatically approves low-risk invoices. The invoice status is then updated in real time to Approved or moves to the next stage if criteria are not met.<\/p>\n Copilot Agents act as the intelligent front-end interface for initiating invoice approval in Dynamics 365. The agent prompts users to upload the invoice PDF, validates the document using a custom AI prompt, extracts invoice data into structured JSON, and triggers the multi-stage approval workflow. It ensures that invoice processing begins with accurate, validated data before the approval logic is executed.<\/p>\n Manager approval is required when the invoice does not meet the AI stage criteria, such as exceeding a predefined financial threshold or failing validation rules. In this scenario, the AI stage returns a Rejected decision (for automation purposes), and the workflow continues to the Manager Approval stage. An approval request is sent via email, allowing the manager to approve or reject the invoice without logging into Dynamics 365.<\/p>\n The AI stage uses reasoning and structured invoice data to make intelligent decisions based on business rules, such as risk level or amount thresholds. A Condition stage, on the other hand, uses deterministic IF \u2013 THEN logic (for example, if subtotal > 10,000, route to Finance). The AI stage allows flexible evaluation, while the Condition stage ensures strict, predictable routing without interpretation.<\/p>\n\n
How the Invoice Approval Agent is Used by Business Users<\/h2>\n
![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/1Dynamics-365-Using-Copilot-Agents.jpg\")
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\n\u201cSubmit an invoice for approval\u201d
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\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/2Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\nAI Stage: Automatic Invoice Approval Based on AI stage Rules<\/h3>\n
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\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/3Dynamics-365-Using-Copilot-Agents.jpg\")
![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/4Dynamics-365-Using-Copilot-Agents.jpg\")
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![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/6Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\nInput to the AI stage<\/h3>\n
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![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/7Dynamics-365-Using-Copilot-Agents.jpg\")
<\/h2>\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/8Dynamics-365-Using-Copilot-Agents.jpg\")
\nApproval Logic Used in This Scenario<\/h2>\n\n
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\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/9Dynamics-365-Using-Copilot-Agents.jpg\")
<\/strong><\/p>\nManager Approval Stage: When AI Cannot Approve the Invoice<\/h2>\n
\nWhen an invoice does not meet the AI approval criteria, the approval process moves to the Manager Approval stage.<\/p>\nHow it work<\/strong> from AI Stage to Manager Stage<\/h2>\n
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![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/10Dynamics-365-Using-Copilot-Agents.jpg\")
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![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/11Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/13Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\nManual Stage Uses<\/h2>\n
\nBelow are the most important options used in this stage:
\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/14Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\nCondition Stage Uses (Even When AI Is Used)<\/strong><\/h3>\n
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\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/15Dynamics-365-Using-Copilot-Agents.jpg\")
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\nThe flow then handles multi-stage approval and updates the invoice status accordingly.<\/li>\n<\/ul>\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/16Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/17Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/18Dynamics-365-Using-Copilot-Agents.jpg\")
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\nThe entire process runs in the background without blocking the user.<\/li>\n<\/ul>\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/19Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\n![\"Dynamics](\"https:\/\/www.inogic.com\/blog\/wp-content\/uploads\/2026\/02\/20Dynamics-365-Using-Copilot-Agents.jpg\")
<\/p>\nWrapping Up<\/h2>\n
Frequently Asked Questions (FAQ)<\/h2>\n
How does AI invoice approval work in Dynamics 365?<\/h2>\n
What is the role of Copilot Agents in invoice approval?<\/h2>\n
When is manager approval required in multi-stage workflows?<\/h2>\n
What is the difference between AI stage and Condition stage in a multi-stage approval?<\/h2>\n