Automated Invoice Processing with OCR. How does it Work? [With Use Cases]
by Sujith Parakkunnath, on June 23, 2022 9:30:00 AM PDT
When organizations are on the brink of scaling their business processes, paper invoices can prove to be quite a hindrance. After all, manually reading every invoice, extracting data from the same, and then processing it can take up hours and hours of valuable time for the accounts payable department. It is at this very point that OCR technology can prove to be of immense help! Let us understand all about this technology, and how it can benefit your accounts payable workflow almost seamlessly.
What is OCR?
Optical Character Recognition or OCR software is essentially a tool that recognizes and reads text from a digital image. Some of the most common use cases of OCR software include -
- Text Extraction from Scanned Documents
- Data Capture from Images
- Creation of Accessible Electronic Documents
Simply put, OCR solutions help provide searchable and editable text, by converting them from image/paper formats to digital formats.
OCR Invoice Processing
OCR can prove to be a competent invoice scanning software. Right from its ability to automatically extract data and eliminate the need for manual data entry to creating a paperless environment for the accounts payable department, an OCR solution comes in very handy to make the AP automation both - seamless and accurate.
How does Invoice OCR Processing work?
If you make use of a sophisticated OCR Invoice Processing software, it will more or less work in the below-mentioned fashion -
Step 1 - Document Correction
At this stage, the non-scanned PDF files or paper invoices, or any other document type are scanned such that they are converted to high-resolution JPG images. Image pre-processing is largely done to ease the task of the OCR software when it comes to creating a distinction between the text and the background. Some of the major objectives achieved during invoice imaging are -
- Skew Correction
- Noise Removal
Step 2 - Text Detection
Once the scanned images are pre-processed, the software works toward detecting data fields. It is at this stage that aspects like tables and graphs are detected by the software.
Step 3 - Text Recognition
As the name suggests, this stage is all about the software recognising data, and to the place, each data field, for instance, product name, product quantity, invoice date, invoice number etc. belongs to.
Step 4 - Data Validation
Since OCR technology involves little to no human intervention, data validation becomes an essential step. Here, the accuracy and quality of the recognized data are ensured, by deploying various checks. These steps to verify data helps confirm the logical consistency of the data, such that it can be extracted and put to use without any inherent issues. This helps reduce OCR errors to a large extent.
Step 5 - Data Extraction
In this step, the OCR software works towards extracting invoice data from various regions such as tables, headers and footers, and other places from the scanned document, and uses the same to fill the relevant fields in the electronic documents, to feed the same into the desired accounting system.
OCR Invoice Processing & Machine Learning Technology
In the present day scenario, invoice processing through data capture software is often clubbed with machine learning models, in a bid to make the processing more accurate and to reduce the need for human intervention, which eventually helps enterprises to reduce costs.
While Artificial intelligence provides assistance in key data recognition, Machine Learning helps in converting it into more structured data that can be easily read by the accounting software.
Hence, it wouldn't be wrong to say that Machine Learning helps enhance the OCR outcome, by ensuring swift and accurate text detection, enhancing its readability, and reducing the time taken to do it all!
How Infrrd Helps in Processing Invoices Through Accounts Payable Automation
- Ifrrd offers an AI-first and template-free solution, that is capable of managing exponential volumes and variations
- Out-of-the-box invoice and accounts payable document models to make deployment easy and quick
- Streamlined configurability, allowing companies to choose from a variety of fields to build their own processing models, and accounting documents
- Helping the accounts payable staff save time otherwise consumed in manual invoice processing and data extraction from other accounting documents
- Fully automated purchase order matching connecting vendor invoices with their respective purchase order numbers for seamless processing.
- Continuous improvement in extraction accuracy through ML, ensuring enhanced efficiency and improved productivity.
Use Cases of Infrrd Invoice Processing Solution
- Tax form processing
- Invoice Generation
- Electronic funds transfers
- Fraud detection
We hope that you are now well aware of the process through which OCR invoice processing takes place, as well as the benefits of deploying a competent solution such as Infrrd for Invoices. Should you have any queries pertaining to the same, or are willing to get a free demo, you can do so by clicking here and filling out your information.