Why agentic AI matters for Microsoft Dynamics 365 users

Key takeaways

• Manual workarounds in ERPs and business systems can’t keep up with the ever-growing complexities of today’s tax compliance landscape.
• Agentic AI is more than a buzzword: These AI agents can execute arduous and/or complex tasks on their own, operating within guardrails your organization sets.
• Avalara Agentic Tax and Compliance™ works right within Microsoft Dynamics 365, meaning easier adoption within existing workflows.
• The benefits of adopting agentic AI include identifying compliance issues early, getting strategic insights from data, and increasing efficiency.

Finance, tax, and IT teams face an ever-evolving compliance landscape that grows more complex at every step. As if rising transaction volumes and new jurisdictions aren’t challenging enough to keep up with, frequent regulatory changes and tighter audit expectations add layer upon layer of risk — and often, frustration.

What’s worse, many manual workarounds inside ERP environments (workarounds that were never all that efficient in the first place) are no longer adequate in the face of these new compliance pressures. Even businesses that have relied on traditional tax automation for years are finding the need for more powerful solutions.

Enter agentic AI.

You’re probably skeptical of AI hype by this point — and rightfully so. It’s become a ubiquitous buzzword, tacked onto product names and service descriptions regardless of whether it plays a role in making the product or service better. (Or whether it’s actually involved in the product or service at all.)

This is different. Agentic AI goes far beyond chatbots and copilots. Rather than simply answering questions or delivering suggestions and recommendations, these are AI agents that can execute tasks on their own. No worries about them going rogue, though: They operate similar to your team members, with permissions and security protocols serving as guardrails. They work across systems, easily handle repetitive tasks, and can catch small issues before they become big problems.

It’s a seismic shift in the tax compliance arena.

What it means for Microsoft Dynamics 365 users

Tax work often spills into emails, spreadsheets, and disconnected tools. And while the Microsoft platform has powerful capabilities, today’s global compliance environment requires specialized, flexible tools. That used to mean making a choice: Do you stay within the Microsoft ecosystem, or do you integrate third-party solutions that might need custom code to work properly and introduce friction into your processes even if they do work?

Avalara Agentic Tax and Compliance blurs that line, augmenting the capabilities of Dynamics but working seamlessly across systems thanks to natural-language interactions and standardized protocols. (No custom code needed either.)

This AI-powered solution eases the burden on teams by eliminating or vastly reducing the need for workarounds and/or custom development. It can:

• Create and maintain rules in response to business or regulatory changes.
• Handle exceptions and edge cases without endless handoffs.
• Provide onboarding and configuration support.
• Turn tax questions and other queries into answers faster.

Built to work within your existing tech stack

Of course, new benefits and capabilities might as well not exist if they’re too difficult to access or understand; people won’t use them. That’s why Avalara Agentic Tax and Compliance is so powerful. These agents are built in, they’re not bolted on — they live where your work actually happens.

For example, one agent can automatically guide Dynamics users through Avalara onboarding via a Chrome extension so they don’t even have to leave their browser. Another agent can take a plain-language request and perform complex tax calculations — knowing which data to pull, what processes to use, and how to display the results. In Outlook, an agent can review incoming invoices before they even reach the ERP in the first place, flagging potential compliance issues for closer review.

Avi, the Avalara “superagent,” is the front door that orchestrates all of these tasks. When you ask Avi, it knows exactly which agent to call — not just inside the Avalara platform, but in ERPs, business systems, web browsers, and beyond.

But contrary to what you might think, agentic AI doesn’t mean giving up control: Humans are always in the loop, and approval can be required for any decision or process. What it does mean is saving your people from data gathering and other manual tasks, so they’re free to work on more strategic things.

Available in Microsoft Marketplace

These solutions go beyond just working in the systems you already use: You can purchase Avalara AvaTax and Avalara AvaTax for Accounts Payable directly through Microsoft Marketplace. Because they meet Microsoft security, compliance, and operational standards, this helps shorten procurement cycles and reduce internal review hurdles.

Even better, you can apply those purchases to your Azure commitment — centralizing your cloud spend, simplifying accounting, and avoiding budget waste. We’ll help you find the right tax automation solutions for your business, then work with you and your Azure Account Executive to ensure you’re making the most of your Azure investment.

A true competitive advantage

Companies that adopt agentic AI have measurable advantages over those that rely on traditional compliance solutions — and it goes beyond simply processing more transactions without increasing headcount.

These early adopters are identifying compliance gaps and issues before they become significant risks, they’re getting insights from their data that weren’t possible before, and they’ve gained flexibility to allocate resources to where they matter most.

Getting ready for agentic AI

While agentic AI can be plug-and-play, businesses and teams should take some factors into consideration before jumping into the “play” part.

• Business case. AI is buzzy — but that’s not a good reason to implement it for your business. Make sure you’re not just adding technology to add technology. Outline your pain points, compliance gaps, and how agentic AI can help.
• Data hygiene. Any AI solution is only as good as its data inputs. How clean is your data? How organized is it? Will an AI agent be able to find what it needs in order to do what you want? If not, what do you need to do to get there?
• Governance. What guardrails and guidelines will you implement with agentic AI? What kinds of decisions will require human approval, and who will provide that oversight? When should an AI agent escalate to a human representative?
• Outcomes. As with any initiative, it’s important to set expectations and track progress toward goals. How will you measure success?

The path ahead

Even companies that aren’t ready for agentic AI today would be well-served to begin building an understanding and evaluating how it can fit into future plans. The technology is mature enough for meaningful use now, and it’s only growing more powerful. Are you ready for when something you consider a “nice-to-have” turns into a “must-have”?

If you’re not prepared, your company may face far more than just compliance risks in the future: You’ll face competitors who have already used agentic AI to optimize processes, scale efficiently, and strategize more effectively.

Want to learn more about Avalara Agentic Tax and Compliance? Contact us today.

FAQ

What is agentic AI?

Agentic AI is different than the chatbots and copilots many think of when they think of AI. These AI agents can execute tasks on their own, operating autonomously with permissions and security protocols. They can easily handle repetitive tasks across systems, freeing up time for human employees.

Is there human involvement?

Yes. Every organization can decide what critical decisions and processes require human oversight and approval.

What are the advantages of agentic AI?

One of the key advantages is efficiency: Having agentic AI take over routine, complex, and/or time-intensive tasks means team members are free to work on more strategic things. It also can help identify tax compliance issues before they become larger problems, and provide powerful data insights.

Does Avalara have agentic AI?

Avalara Agentic Tax and Compliance features agents that live in the systems and ERPs where work actually happens, like Microsoft Dynamics 365 — it’s specifically designed to fit into existing workflows with ease.