Invoice OCR Guide: Know Its Unique Features & How It Helps Businesses Save Money
Are you going through the “Invoicing is getting on the nerves” phase? It is a reality for many businesses, as invoicing is a repetitive manual process. Plus, there is so much volume of financial transactions happening daily.
How do we solve this problem? Start using Invoice OCR for your daily invoicing requirements. Read more about it before embracing it.
Table of Contents
What is Invoice OCR?
Invoice OCR, i.e. Optical Character Recognition, is a tech-based process whereby data is extracted from an invoice document and converted into a machine-readable format. It can easily recognise the text, numbers, amount, and invoice pattern and convert it into a digital format using machine learning techniques.
It uses complex algorithms and easily converts a handwritten or printed invoice into its digital version. You can then feed the accounting system with this digital invoice and streamline your financial process.
How Does Invoice OCR Work?
It is a 4-step process that includes:
- Pre-processing and conversion of the invoices into JPG image formats
- Detection of Text in the JPG files uploaded to the system
- Recognition of text, paragraphs, numbers, and other information to structure a pattern
- Data Extraction from recognised invoice areas using an open-source based programme
Unique Features of Invoice OCR
Accurate Extraction of Data
To eliminate the need for manual data entry for invoicing, this technology was designed specifically for accurate data extraction. The system uses digital algorithms for precise data extraction from the image formats of printed invoices and reduces the chances of error. Thus, businesses can rely on this technique, and decisions can be made knowing that the information comes from a precise place.
Data Entry Automation
Automated data entry is the most important feature and benefit of this technology. After the data extraction is complete and the system has recognised everything on the invoice, including numbers and text, this data is fed into the business system and taken up by various other business processes for further use. It frees up a lot of employee time which can be directed towards productive business activities, improving the efficiency of accounts receivable and payable, and upgrading the overall business.
Customised Invoice Templates
It is possible to derive custom invoice templates using the Invoice OCR technology. The business owners can configure the system to extract data from only certain invoice fields. It comes in handy when there is a requirement for different types of invoices. You can extract details like vendor name, date, quantity, and price from the physical invoice and ignore other information to create a template for the customer. It ensures you can customise your invoices as per individual client requirements.
This OCR-based technology is cloud-based and can be accessed from anywhere in the world. Thus, it promotes remote working for employees and businesses, ensuring the business can run smoothly 24/7. It is a subscription-based invoicing solution, eliminating the need to procure any on-premise solutions.
The OCR technology for invoicing can be easily integrated into multiple business systems like accounting, CRM, ERP etc. Thus, it leads to the complete automation of processes, from invoice data extraction to maintaining follow-up with customers and the final accounting entries. It aids in standardising workflows, reducing human interference, and improving business efficiency.
How Invoice OCR Helps Businesses Save Money?
Reducing Data Entry Costs
Since the OCR invoicing technology has the potential to get completely automated, it virtually eliminates the need for manual data entry. Thus, it helps businesses reduce unnecessary labour costs for easy, repetitive invoicing tasks. Therefore, the time saved on this process can be used by employees to maintain good customer-business relationships and contribute to business growth. Also, it uses a subscription-based model, eliminating the need to procure expensive hardware and software.
Invoice automation is strongly characterised by immediate invoicing when the data is available to the system. Thus it leads to the creation, sending and receiving of invoices quickly. It ensures that no accounts remain overdue over the deadlines and streamlines incoming cash flow by getting prompt customer payments. It saves the business cost on payment of unnecessary interest and charges.
Better Invoice Management
Manual data entry systems are more prone to human errors and may result in significant mistakes costing the business strongly. But, with the Invoice OCR technology, every step of invoicing can be automated and customised as per requirements, thus ensuring the invoices are better managed, recorded and followed up.
Thus, the Invoice OCR technology is a strong tool to overcome the hassles of manual invoicing and is a great way to streamline the workflow across multiple platforms. It is a must-have technology for businesses that want to gain higher efficiency and profitability. Also, it is a boon when it comes to handling customer and vendor relationships.
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