Unlock the full potential of your invoice processing with Invoice OCR Software – the ultimate tool for streamlining your workflow.
In this blog, we unveil 3 crucial factors you must consider when choosing the right software in 2024. Because, by itself, OCR will not get the job done!
From processing color scans to effortlessly handling multi-line items, we'll guide you through the essentials for maximizing OCR efficiency. Plus, discover why flexibility is key in adapting to your unique invoicing needs.
When you put invoices in a document feeder and scan them, does the software process color scans?
All OCR invoice software solutions say that they support color scanning. However, the lesser-quality solutions actually downgrade the image quality to grayscale or bitonal (black and white) images before performing OCR.
They do this because they haven't developed their technology enough to truly support extracting text from color images. Meanwhile, the best OCR invoice software does support color scanning and processing.
In this example, all these invoices were scanned in color. Click to enlarge:
Why is color scanning and processing so important?
Because of pixilation. All images are made up of pixels (small blocks of colors), and color images contain more and better-quality pixels for OCR engines to recognize what a letter or number is, compared to grayscale or black and white document images.
Basically, color images improve OCR recognition accuracy on invoices.
And a 1% increase in accuracy translates to a 10% decrease of your validation labor. That means only a 5% improvement represents 50% decrease of your data entry work.
But Color Images Require a Lot of Storage Room, Right?
Yes, color images have much larger file sizes than grayscale, and grayscale are much larger than black and white images. So if you stored color invoice images in your system, it would require a lot of room.
However, OCR and data capture is a temporary phase just for getting information off invoices. After OCR is complete, the best invoice OCR software can convert file formats to store images as black-and-white with small file sizes.
This is an important factor to look for, as virtually no other invoice OCR software can easily do this. Make sure that whatever OCR solution you buy can easily collect data from line items that span multiple rows, like Grooper can:
Many OCR technologies have difficulty with capturing multiple-row line item data. But the best solutions, like this one, have techniques to easily read and collect this data.
Make sure your solution can read multi-page tables as well. That's right, multi-line, multi-page tables. If you're manually entering data off these kinds of tables now, your data entry will be greatly reduced with a solution like Grooper.
That results in much higher text recognition accuracy, and once again, much less manual work you have to do to get this data in your system.
In this example, the OCR Accounts Payable software caught a math error in the invoice. The invoice said that 6.3 hours worked times $40 per hour equaled $260.00. So the OCR and math validation by the software is correct.
But the vendor contract allowed the vendor rounded 6.3 up to 6.5. Click to enlarge:
Here are two ways to fix this:
Every organization handles invoices differently, so it's important to choose software that is seamlessly integrated and flexible and can be tailored to your processes. Learn more about automated invoice processing.
This blog only showed you 3 factors about the OCR step, but there are many more you need to know about for all steps of the process. Get this free cheat sheet to discover 11 more things.
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However...there are several caveats to these solutions. Two things you need to keep in mind include:
By itself, OCR can only recognize and extract data. For example, Invoice OCR:
Luckily, OCR is one of many tools in intelligent document processing platforms. This makes IDP systems perfect for invoice automation.
Also, OCR software also can't improve image quality, which leads us to...
By itself, OCR actually makes a lot of data recognition mistakes. The things that make an invoice easy to read for humans (company logos, lines, boxes, columns of invoice data) really confuse OCR invoice software.
But document processing solutions do two things to help out Invoice OCR software:
Here is a great example of these tools increasing data accuracy:
Contact us today to test out Grooper's Invoice OCR solutions. Our OCR is the best in the industry and will save you more time and money by extracting more invoice data than other solutions!
Several other technologies are needed to help OCR capture data off invoice documents and get it into business systems. Here are the technologies and workflow steps involved:
They are sent to Intelligent Document Processing software that include the OCR technology. To drastically improve OCR accuracy, image processing is used to remove non-text artifacts like:
Also, Grooper is not template-based, so it doesn't matter where the data is located on the document. This saves hundreds or thousands of hours of work as you don't have to create specific OCR templates or zones for every kind of invoice.
Grooper Invoice OCR extracts all data, including:
Following these steps, the digitized data and document images can be exported to an ERP, content repository, or accounting software.
First, it's important to know that machine learning is a subgroup of artificial intelligence. This means machine learning enables other software to solve ongoing difficulties by analyzing data with minimal human work.
When combined, machine learning can take invoice OCR software to another level. While OCR extracts data from invoices, machine learning looks through the data structure to find patterns or find differences in the data.
For example, they can understand the difference between an address number, sub-total amounts due, and the total amount due. From this point, software such as Grooper OCR Invoice software can use that information to correctly export that data into accounting or ERP systems.
Invoice OCR paired with machine learning has automated many manual tasks, like:
Also, machine learning empowers companies to quickly implement an automated invoice solution.
Prior to OCR invoice software, rule-based logic had to be set up and configured by a human developer for an automated accounts payable workflow to function. But now, machine learning takes care of this by enabling AP software to learn workflow logic as it processes invoices.
Put simply, the higher the accuracy, the more that human intervention is greatly reduced.
Grooper can consistently deliver invoice data capture accuracy of over 99%. It does this by using patented OCR methods unique to only Grooper, great image processing, and many other tools.
Extract All Data - Handwriting, Tough Fonts and Table Data
Grooper's ability to access the Azure OCR API means it can easily recognize handwriting on invoices and other financial documents. Then combine that with Grooper's method of using multiple layers of OCR to target different fonts, and it's game-changing ability to extract table data.
You then have a solution that can automate a vast amount of invoice data entry work.
Improved Productivity
Improving extraction accuracy by one percent means many hours of manual data entry saved every week. With menial work now automated, this valuable time can be spent on work that is more valuable to the organization.
Any Invoice Data — from Any Format
Grooper can extract data from virtually any data source. These include: paper, microfilm, scanned image files, digitally created documents, electronic files (like EDI CSV, XML), and many others.
With this ability you can streamline any invoice extraction workflow. So an organization can cut costs and work time in many different applications with Grooper.
Many OCR solutions are included within intelligent document processing software. These solutions (like Grooper) are capable of automating invoice processing — and many other documents like purchase orders, receipts, and shipping documents.
These solutions are also seamlessly integrated very capable of automating document workflows in many other departments within the same organization.
Invoice OCR software is highly accurate when combined with IDP tools like image processing and advanced OCR methods. These high rates of extraction accuracy lead to huge amounts of time-consuming manual entry work being automated and reduced errors.
For example, this credit union has eliminated 97% of manual data entry work for several daily tasks.
By automating the manual data entry work off invoices, companies can drastically cut costs. This invoice data is available days or weeks faster, translating to invoices being paid on time. This means companies avoid late payment penalties and can meet early payment discounts, which saves more money.
This also leads to more intelligent 3 and 4-way invoice matching. So companies can catch billing errors (or human errors) faster, or notice if they receive fewer items than what they paid for.
Invoice OCR software refers to Optical Character Recognition (OCR) software used to automate the data extraction from invoices and related financial documents. It uses uses many technologies like machine learning, image processing, and artificial intelligence.
OCR invoice systems empower businesses to automate accounts payable processes. Several of the many benefits that invoice OCR systems bring are: reduced manual errors, accurate financial records, substantial time and money savings.
The bigger benefits of invoice OCR systems is that they help businesses pay suppliers quickly to benefit from early payment discounts and avoid late payment penalties.
Invoice data extraction software using OCR don't care about different layouts or structures of invoices. They can easily transform unstructured invoices, or invoices of varying structures, into structured data.