Microsoft Dynamics 365 Blog

Tag: AI Agents

  • Modernizing Your Project Management & Accounting (PMA): Why It’s Time to Upgrade to the Dynamics 365 Project Operations Modern Architecture

    Modernizing Your Project Management & Accounting (PMA): Why It’s Time to Upgrade to the Dynamics 365 Project Operations Modern Architecture

    In the era AI‑powered business applications, project‑based organizations need more than accurate accounting. They need agility, end‑to‑end visibility, and connected processes to deliver profitable and predictable outcomes.

    Many organizations still rely on the legacy Project Management and Accounting (PMA) module in Dynamics 365 Finance & Operations. While PMA has served businesses well for project financial control, it falls short in modern project planning, resource optimization, integrated sales, and collaboration capabilities.

    Microsoft’s modern architecture for Dynamics 365 Project Operations bridges this gap by combining the financial rigor of PMA with next‑generation, AI‑enabled project capabilities built on Dataverse. This evolution is not just a technical upgrade; it’s a strategic shift to future‑proof your business and unlock meaningful efficiency gains.

    This post is for project and service‑based organizations using PMA today who are evaluating their journey toward the modern architecture.

    Why Legacy PMA is Holding you back:

    Organizations still using PMA often face:

    • Fragmented project planning and resource management
    • Limited collaboration across sales, delivery, and finance
    • Outdated and siloed technology
    • Quite a bit of manual processes
    • Limited scalability for modern operating models

    PMA provides strong accounting, but lacks the integrated, AI‑enhanced capabilities needed for today’s project‑centric enterprises.

    What is the Modern Architecture vs Legacy PMA:

    Legacy PMA (Your current state)

    • Fully embedded in Finance & Operations
    • Handles project creation, basic scheduling, time & expense, invoicing, and revenue recognition
    • Limited sales integration
    • No modern AI or Dataverse-native capabilities

    Modern Architecture (Your future state)

    • Sales, planning, resource management, and project operations run on Dataverse with Dynamics 365 Project Operations all in one connected flow.
    • Financials, invoicing, and accounting remain in Dynamics 365 F&O
    • Synchronized financials to ERP via out of the box dual-write
    • Enables rich planning, AI, automation, analytics, and collaboration

    This hybrid model gives you the best of both platforms.

    Why is it important for Executives and Business Leadership:

    AI powered project planning:

    Built-in Planner P3 capabilities, including Copilot-assisted WBS creation, risk assessments, and status reporting accelerate delivery and improve accuracy.

    Agentic AI Automation

    Intelligent agents reduce operational overhead by automating time & expense entry, approvals, reconciliations, and monitoring.

    Smarter, More Reliable Finance

    Connected processes from Quote → Contract → Project → Revenue Recognition reduce errors, shorten billing cycles, and improve reporting.

    Unified Platform For your Service, Projects and Financial Ops

    Modern planning and resource management on Dataverse works seamlessly with F&O’s proven accounting, connected through dual-write. Out of the box integration of Field Service operations with Projects enables seamless workflows from “field to financials”.

    Low-Risk Transition Path

    Starting in version 10.0.45/10.0.46, Microsoft allows PMA customers to include the same legal entity in the modern architecture.
    You can:

    • Continue and close PMA projects
    • Create new projects in the modern architecture
    • Avoid heavy code or data migration investments

    Future-Ready Foundation with a really well-defined roadmap

    Built on Power Platform, enabling continuous innovation with AI, process automation, and analytics. The roadmap for the modern architecture is compelling with robust features such as change orders, AI agents, what-if analysis and more.

    Key Capabilities You Get in the Modern Architecture

    • AI driven Project Planning with Microsoft Planner P3 built-in: Intuitive, timeline-based planning powered by AI.
    • Unified Resource Management: Seamless resource scheduling and utilization across roles.
    • Modern Contract Structure and Pricing: Richer quoting built on D365 Sales/CRM capabilities and flexible contract modeling and dimension-based pricing with a unified business process flow.
    • Subcontracting: Fully integrated with D365 F&O Procurement providing end- to end capabilities from subcontract modeling, T&E, invoicing with 2-way and 3-way matching and integrated vendor invoicing.
    • Agentic T&E Entry and Approvals Management: Game changing T&E entry and approvals management saving significant time for your resources and PMs.
    • Billing Hub with modern invoicing and KPIs
    • Dual-write Integration out of the box: Real-time syncing of data between Dataverse and F&O out of the box takes the burden off of you where you don’t have to custom integrate your CRM with ERP. This is a HUGE relief for customers where they do not have to maintain the technical debt of custom integrations. Along with all the modern functionality you will get, this alone should be one of the primary drivers for you to consider the move to the modern architecture.
    • D365 Field Service’s native integration with project operations streamlines your service business integrating seamlessly with projects and financials workloads out of the box.

    How is Microsoft Enabling this transition:

    Starting with the version 10.0.45/10.0.46, if you are using the PMA module to manage your projects under a legal entity in your existing D365 F&O environment, you can include the same legal entity in the modern architecture.

    Microsoft’s goal here is not provide full PMA capabilities and the modern architecture capabilities within the same legal entity in F&O. This functionality of allowing the co-existence of the some of the legacy PMA functionality is primarily to provide customers a path to close out projects they started in the PMA in D365 F&O and create any new projects going forward using the modern architecture.

    This is great news for you as a customer, where you will NOT have to spend time and money on significant technical code migration or data migration efforts to move over to the modern architecture. You will have most of the key functionality/processes you need to close out your PMA projects and then take the opportunity to evaluate your holistic “project to Profit” business processes and take advantages of the functionalities available in the modern architecture for new projects post migration.

    Some Technical and Functional Details:

    Here are some of the high-level steps of how you can enable this migration.

    You will first need to include the legal entity where you are using the PMA module in the global parameters in order to enable the modern architecture of Project Operations.

    You can then go through the technical steps of including that legal entity in the dual-write integration keys and likely perform an initial sync to get the foundational entities initial synced between F&O and Dataverse. This is a requirement for the modern architecture.

    With those in place, when you go look at your projects that were created with the PMA solution will have limited features and functionality available which provides you pretty much everything you need in order to execute the remainder of those projects and eventually close them out.

    Below are the features that are available for closing out the PMA projects.

    1. Manage Project stage transitions
    2. Manage Ledger postings configurations
    3. Setup/update cost prices and sales prices
    4. Process Hour/Expense/Item/Fee journals to update costs/revenues and general journals on projects if required.
    5. Process project item requirements.
    6. Create or complete purchase orders, requisitions, RFQ, agreements linked with the PMA project.
    7. Create/Update on-account transactions.
    8. Project Expense reports.
    9. Create and post project invoice, credit notes and customer advances.
    10. Revenue Recognition processing.
    11. Intercompany invoicing

    Below are the features that are NOT available for the PMA projects:

    1. Adding advanced project contract details such as billing rules, multiple funding sources, rules and limits are not available. This can be a key consideration if you are using this functionality in the PMA. Before you enable the modern architecture, you need to ensure that all your contract definitions are up to date so that you can continue executing the billing for the contract/project. It is likely that you may find some contracts which will end up being candidates to be migrated to the modern architecture.
    2. As of 10.0.46 release, Project Timesheet Entry is not available. This means you will need to rely on Hours journal entry to account for the hours for resources for the remainder of the project. I can see this being an issue for some customers especially if they are using a lot of intercompany timesheets.
    3. Cannot edit project forecasts or budgets: Should not be a deal breaker and there are ways to make get around this constraint.
    4. Below screenshot shows legacy PMA and Modern architecture projects existing in the same legal entity in F&O.

    Conclusion:

    The move from the legacy PMA module to the modern architecture is more than a technical upgrade, it’s an opportunity to rethink and elevate your entire “Project to Profit” lifecycle. With AI‑driven planning, agentic automation, unified resource management, and F&O’s trusted financial capabilities, organizations can reduce operational overhead, accelerate execution, and improve profitability.

    With coexistence support now available in version 10.0.46, PMA customers can modernize with minimal disruption, closing existing projects while launching new ones on a future‑ready platform.

    Regards,

    Sandeep

  • Time & Expense Entry: The Task no one loves but is critical for all project/service-based organizations – Now Handled by AI Agents in Dynamics 365

    Time & Expense Entry: The Task no one loves but is critical for all project/service-based organizations – Now Handled by AI Agents in Dynamics 365

    Let’s dive into the new innovative Time Entry and Expense Entry AI Agents, which are now available in a production-ready preview within Dynamics 365 Project Operations and Dynamics 365 Finance & Operations! These are not just another feature; it’s a significant step forward in Agentic business applications that can truly transform how we handle project management.

    If you missed my last post about the AI Agentic T&E Approvals capability, you can read it here. That post mainly focused on simplifying and automating approval tasks for project managers.

    Why First Party Agents for Time & Expense Entry:

    Microsoft has released new AI agents in Dynamics 365 to make time and expense entry easier, a task often disliked in project work. These agents automate the process from capture to submission, cutting down on manual effort and mistakes. The integration with Dynamics 365 and Teams supports secure, efficient workflows. This is part of Microsoft’s effort to integrate AI into daily tasks, allowing employees to concentrate on more valuable work.

    The Benefits are aparent:

    • Reduced administrative overhead: Agents create Time and Expense Entries based on project bookings and receipts, saving time for employees. They review and submit these entries, allowing Finance teams and project leads to spend less time on follow-ups.
    • Accelerated billing cycles and cash flow: Real time and accurate capture of time and expenses ensure reduction is missed and incorrect T&E and faster invoice processing.
    • Improved Employee Experience: Employees interact with AI Agents within the flow of their work, i,e., Microsoft Teams. This reduces friction and improves adoption.

    Who this is for:

    If your organization uses Dynamics 365 Project Operations and/or Dynamics 365 Finance and Operations, you can use these new agents. If you only use Dynamics 365 F&O for expense reporting, you can deploy the Expense Entry agent.

    Let’s see the Agents in Action:

    The Time Entry Agent understands your project assignments and bookings and does automated time entry for you. It can check previous weeks’ timesheets and create current week entries based on that. It also generates smart comments for entries by looking at the project task details like the description and project name. Additionally, it can analyze your Outlook meeting invites to make comments based on meeting event titles.

    You can review time entries created by the agent directly in Microsoft Teams, make changes as necessary and submit for approval. The agent also tracks unsubmitted entries and notifies you for proactive submission.

    The Expense Entry agent on the other hand is even more powerful. All I need to do as an employee is capture my receipts on my phone and send the captured images or PDF files to the mailbox used by the Expense agent. The rest is done by the agent for you. Here is what does for you.

    • Process the receipts from your email or the ones you uploaded via the expense app.
    • Extracts receipt info and create expense lines automatically.
    • Not only that, it goes ahead and creates the expense report for you based on trip or by project (based on config) and sends a live summary of the expense reports in Teams for you to review and submit.
    • Additionally, it can intelligently identify active projects and assign those based on project location matching if you do project-based expense reporting. If you do your reporting by trip, it can create reports based on the location of travel and associate receipts. The agent can read your calendar events to look into details which may have key details such as location, project ID/name and use it identify project IDs that the expenses needs to be associated to.

    As an employee, you go from just sending receipts to the agent to just reviewing your fully prepared expense report within Microsoft Teams for corrections or submissions. Putting things into perspective, I can see saving an average of 20-30 mins per expense report. More than the amount of time it saves for you, it is the tedious manual work you don’t have to do.

    How can you deploy these for your employees today:

    To deploy the production ready(preview) agents today for your workforce, you will need to ensure the underlying features are enabled and the agentic automation infrastructure is setup correctly. This is more of an administrative one-time setup to get the agents up and running.

    For the Time Entry Agent:

    • Ensure you are on version 4.140.0.239 or late for Project Operations.
    • Enable the Feature for Time and Expense Agent in Project Operations.
    • Activate the power automate flows (used by the agent to complete actions on behalf of the employees, such as create time entries, expense reports etc.)
    • Finally, publish the agents in Microsoft Copilot Studio and optionally share in Teams channel/apps for your employees to get the full experience.
    • Follow Microsoft official guidelines here.

    For the Expense Entry Agent:

    • Ensure you are on D365 F&O version 10.0.44 or later
    • Enable the features for “Immersive home and Agent management in F&O.
    • Setup the Agent behavior under the Expense management parameters.
    • Setup a shared mailbox (This is where your employees can send their receipts to or just upload via the expense mobile app).
    • Activate the power automate flows (used by the agent to complete actions on behalf of the employees, such as create time entries, expense reports etc.)
    • Finally, publish the agents in Microsoft Copilot Studio and optionally share in Teams channel/apps for your employees to get the full experience.
    • Follow Microsoft official guidelines here.

    Under the hood

    The agent orchestration is managed by Copilot Studio along with a set of key Power Automate flows for both the agents. For the expense agent, these flows perform actions such as extracting expense details from receipts, identifying project IDs, reviewing calendar events when necessary, generating expense reports, and sending them to employees via Teams cards. The process begins with a Power Automate flow that runs periodically to process emails containing receipts and added to the unattached receipts entity. The agent subsequently parses these receipts to extract information, creates unattached expense lines, links the receipts, identifies project IDs, and assembles the final expense report.

    Config Parameters that control the behavior of the Expense agent for report creation:

    Take the agents for a spin today and encourage your employees to take advantage of these.

    Regards

    Sandeep