When searching for ways to automate their accounts payable process, many people come across the phrase ‘OCR invoice processing’. In most accounts payable (AP) software systems, you may process invoices using optical character recognition (OCR), tax forms, computerized bank transfers, and more.
Using OCR invoice capture, data from digital documents (such as invoices and other accounting documents) may be extracted and converted into text that can be searched and edited.
OCR software solutions that use machine learning provide a measurable competitive advantage to their users. A company’s accounts payable process may be entirely optimized, resulting in more accuracy, greater visibility, and the release of previously unallocated time and resources.
How Is OCR Invoice Scanning Performed?
Invoice scanners use optical character recognition (OCR) technology to read and extract data from electronic invoices. Invoice scanning software can now detect and collect data using Optical Character Recognition.
Devices used for OCR invoice scanning may be “taught” to selectively extract “key-value pairs” of interest by combining AI & ML capabilities combined with OCR. Such software for automated invoice processing is ready to go “out of the box” with pre-trained invoice scanning algorithms. An example process might look like this:
- Add invoices to the document scanner
- Invoices are scanned, and then data that is important to your company is extracted based on your policies.
- The information is then sent in a structured, machine-readable format (CSV, JSON, DOC)
- That data can then be used in other procedures using ERP software.
Tools for advanced invoice automation like Nanonets even let you train your own OCR models to read your invoices. The basic procedures for teaching or creating an OCR system for invoices are as follows:
- To use as a training set, please provide some example bills.
- Annotating or highlighting important invoice data fields on the training set is one way to “teach” the algorithm.
- Invoice scanning software may be taught using user-specific data.
- Apply the custom invoice scanner to actual invoices and check their accuracy.
- If the results are as expected, your personalized invoice scanner is complete.
- If that’s the case, try it again using a different subset of the training set as invoice examples.
Why You Should Digitize Invoices
Now that you know what OCR invoice capture is and how OCR is performed, let’s get a better understanding of why digitizing invoice processing is important. Invoice processing time, money, and resources significantly increase when done manually. Organizations may save time and money using accounts payable automation and invoice data capture software, which also helps with continuity.
There are many ways in which invoice scanning software and process automation may help your company. Listed below, we’ll discuss how your company may reap the benefits of accounts payable automation.
Reduced Carbon Emissions
Invoice scanning software eliminates the need for businesses to print, save, and store paper invoices by allowing them to receive them as PDFs, scanned photos, Google docs, and other digital forms. If these files are digital, they may be kept on the cloud, eliminating the need for on-site file cabinets and reducing a business’s carbon footprint.
Inaccuracies, wasted time, and repetition characterize data input performed by hand. The possibility of incorrect or duplicate payment data in the system increases due to human error. By eliminating the potential for human error, automated invoice scanning software significantly enhances the precision of the scanning and collecting invoice data.
Efficient Use of Time
Utilizing the OCR, you can quickly and easily collect invoice data through touchless OCR invoice processing. This eradicates the time-consuming plus error-prone process of manually entering data, allowing staff to focus on more valuable, productive work. The technology may be easily incorporated into ERP or accounting programs, allowing for more precise and expedited data processing.
Helps Financial Situation
There are several ways in which automating your invoice processing might help you save cash. Invoices are less likely to be handled erroneously, and automated invoicing software may reduce the times they need correction. This prevents erroneous payments from being issued to the wrong vendors and frees up valuable resources that would otherwise be expended, tracking down and correcting these errors. AP automation also allows businesses to expand without needing to add staff at an exponential rate.
20-30% of a company’s annual revenue might be lost due to inefficiencies in operations. Invoices, exceptions, data input, and email approvals are just some of the processes that may be streamlined and handled more efficiently with the help of process automation.
Automated invoice scanning guarantees firms have access to crucial data in real time. With all invoices in one place, keeping tabs on spending, managing the budget, and seeing where the money is going is easier.
Lower Threat of Lost or Leaked Documentation
Businesses may better manage and protect private information by moving it to the cloud and eliminating the need for as many paper records. Digital documents may be safeguarded by different authentications, guaranteeing that only authorized workers can access them, unlike paper records, which can be stolen or lost.
Rapid Resolution of Vendor Disputes
Disputes arise between vendors. When they do, businesses with help from invoice processing software have a higher chance of resolving the issue. The accounts payable department will access digital versions of invoices, purchase orders, packing slips, and other documentation that may be needed to resolve disputes. As a result of having everything in one place, auditing is also simplified.
Learn More About OCR Invoice Software
Invoices may be captured electronically using OCR invoice scanning or advanced intelligent data capture software regardless of how they come – via fax, mail, email, EDI, etc. An OCR invoice software removes human data entry by automating PO-based invoices to accomplish real touchless processing and automating GL-coding for non-PO invoices so they immediately enter approval workflow without the need of templates, anchors, keywords, or zones.
Furthermore, OCR invoice software integrates intelligent capture, enhanced AP workflow, and seamless connectivity with your ERP to build a full invoice processing solution. Increase the quantity of data captured per invoice while cutting expenses and shortening cycle times to benefit from greater supplier discounts and significantly influence your bottom line. Learn more about the capabilities and features of an OCR invoice software on Rillion.
Feature Image Source: Rillion