Customers using the Papercut Scanning (Integrated Scanning) feature may come across an issue when using Office 365 where you’ll see a message hinting that the sender is unauthenticated.
The issue normally happens when the device is trying to send the scan by email, using the user’s ‘from’ address. In that instance, the device logs into Office 365 using the device-configured account, and the email is attempting to send from the user’s email address – which can result in a ‘sender is unauthenticated’ message, or similar.
With Office 365, the SMTP username and password must match the user logging into the device (however that’s not really appropriate, because the user logging into the device will change all the time).
So… as an alternative, Microsoft have a few different suggestions for getting around that issue, listed in their TechNet article How to set up a multifunction device or application to send email using Office 365.
We’ve heard from customers that any of their suggested methods work, with the easiest option being the first option, but other customers have also reported success with the 3rd option of setting up the relay.