OCR invoice scanning

Most organizations say manual data entry and the high volumes of email and paper invoices they receive are a big challenge.

2020 Guide to OCR, Invoice Scanning & Data Capture

Most organizations say manual data entry and the high volumes of email and paper invoices they receive are a big challenge. Compounding the issue:

  • In many cases organizations are using dated legacy OCR invoice scanning technology which has limited functionality and depth
  • Emailed invoices from suppliers are printed out and manually keyed into the ERP
  • For growing companies, larger invoice volumes mean hiring more staff to handle the manual effort

Although EDI or invoices submitted through a solution portal are offered as solutions to the issues above, 80 to 90% of supplier invoices received by companies are either paper or email. Approximately 75% of organizations enter their invoice data manually.

There are some attractive options for handling all formats of invoices, however – from both an implementation and price perspective.

“We just didn’t have time to manage all the incoming invoices. But since changing to Palette, we can manage three times the volume of invoices than our previous AP system allowed.”

5 ways to Capture data from an invoice in 2020 (from the guide)

A supplier creates an invoice in their ERP and generates it as a digital PDF, XML, CSV, Word, Excel, EDI or other electronic format, and then emails it. The invoice is sent to the buyer via a designated email address where automated and AI-driven invoice scanning and data capture software instantly reads the data form the invoice and extracts it into a database.

The invoice capture is fast and 100% accurate, because the electronic file format of the invoice has a data layer that reflects exactly what was input. This digital capture method has a high on-boarding rate by suppliers because the supplier just has to send the invoice to the specified email address and avoids incurring any costs to do so. They may reduce their costs if they switch over from paper and mail.

Whereas legacy OCR invoice scanning technology is resource intensive (data has to be manually field mapped, as an example) Intelligent OCR invoice scanning software technology teaches itself to identify supplier invoices based on their layout and then automatically stores that information for future reference. The invoice OCR software also intuitively maps the data fields in each invoice and stores them in a database.

  • If you supplier sends a paper invoice:
    The invoice is scanned by Advanced OCR invoice software that recognizes the layout of the supplier and then extracts essential data fields. This process takes a few minutes and is 95% accurate. No on-boarding required as suppliers are continuing to send invoices in the mail.
  • If your supplier sends an electronic file of a scanned invoice:
    In other words, if the invoice is an “image” of the invoice (instead of an electronic file with a data layer as mentioned above). Intelligent invoice OCR software scans this information with the same results as paper invoices.

A supplier sends an XML or EDI file to the buyer. This is good for buyers who are set up to receive it, but the supplier has to justify the cost of changing their billing application and infrastructure to send XML and EDI documents. EDI and XML have high data accuracy but a low on-boarding rate.

Invoice data is manually entered into a supplier portal by the supplier. This replicates the manual keying of data into your ERP, but the manual keying is left to the supplier. Good for small suppliers and has a very low on-boarding rate.

Keying invoice data into the ERP, printing out PDFs or other emailed invoices, storing large amounts of paper files, and staying committed to paper processes. Only sustainable for very small operations where automated invoice scanning is still often preferred.

An Optimal Solution

Palette’s Capture solution handles both email and paper invoice scanning with OCR with Intellitags and Digital Capture in the cloud. Our OCR invoice scanning solution processes files in any format: PDF, EDI, XML, Word, Excel, JPG, TIFF, XML, CSV and more. Accuracy rates for paper invoice capture are 95%, and for PDF/Electronic formats 100%. There is no added cost for suppliers.

Palette Capture solutions seamlessly integrate with your ERP, and there is a Full Service option for larger invoice volumes. For more information see Palette Digital Capture.

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