Hello Abinashini,
The “Create File” action in Power Automate Desktop throwing a NotFound error intermittently is not a typical product bug but usually points to environmental conditions on the VM. The error occurs when the target path cannot be resolved at the moment the action executes. Even if the path looks valid, transient issues such as delayed network drive availability, temporary permission denials, or session context changes can cause the action to fail. That explains why re‑adding the action works briefly-it forces a refresh of the cached path reference, but the underlying condition remains.
On VMs, this is most often tied to either redirected folders or mapped drives that are not consistently available. If you are writing to a network share, confirm that the drive is mounted and accessible at runtime. If you are writing to a local path, check whether the folder exists at the exact moment the flow runs. A good practice is to precede the Create File action with “Check if Folder Exists” and “Create Folder” if missing, so the action never attempts to write into a non‑existent directory. Also verify that the account running PAD has write permissions on the folder; intermittent failures can occur if the VM session changes user context or if UAC policies interfere.
If you are certain the path is valid and permissions are stable, then this may be a timing issue. Adding a short delay before the Create File action sometimes stabilizes execution on VMs where disk or network resources are slow to initialize. Microsoft has not documented a product bug for this specific action, so the recommended approach is to validate folder existence, permissions, and timing. If after these checks the issue persists, it would be worth opening a support ticket with Microsoft to capture logs from %LOCALAPPDATA%\Microsoft\Power Automate Desktop\Logs at the time of failure. That will confirm whether the error is environmental or a defect in the action itself.
I hope you've found something useful here. If it helps you get more insight into the issue, it's appreciated to accept the answer. Should you have more questions, feel free to leave a message. Have a nice day!HP.