The OCR technology for invoice recognition is the optimal solution for the majority of businesses, companies, and organizations. Of course, just like with any other digital tool, it comes with a new set of challenges and raises new questions. For instance, how do these professional programs function? What are some of the pros and cons of automatic invoice recognition? This article will provide an objective overview of this technology and its most noteworthy implications.
Definition of OCR and, more specifically, invoice OCR
OCR stands for Optical Character Recognition – a software that allows professionals to convert any physical document with textual content into a digital format retaining all the properties of a text file. This technology can then analyze and process any invoice, whether generated by a machine or even handwritten. In general, running your document through a suitable scanner will be enough to benefit from automatic invoice recognition.
Scanning an invoice with OCR thus offers the significant advantage of automating certain compatibility related processes within a company or organization. If it’s your first encounter with this technology, it’s understandable if this solution may seem confusing and raise a pertinent question: how does invoice recognition even work ?
How does automatic invoice recognition work?
While OCR technology is not exclusive to invoice scanning, it is absolutely remarkable in this function. In practice, each scanned piece of text is instantly matched up to a database that contains a wide variety of fonts. This process equally benefits handwritten documents, enabling the great advantage of digital conversion.
As a first step, invoice OCR seeks out the distinct separation between each element. Therefore, the system analyzes the images, tables, letters, and numbers within a document to get a clear idea of what is what.
After the analysis, OCR converts each textual element into lines, words, and finally, characters. The nature of the letters and numbers, such as their curvature, accents, and other details, is then analyzed following the knowledge base previously processed by the software. The program thus considers several outcomes before finalizing the document in question into a digital format.
Why use automatic invoice recognition?
Tools that most professionals require
If you have never used OCR for invoice recognition, you are entitled to another obvious question: why use this technology, and what kind of professionals would benefit from this software that we highly recommend ? In theory, any business, company, or organization can use and benefit from automatic invoice scanning. However, it really depends on the scope of accounting that your enterprise requires. In this regard, some profiles have little to no use for an OCR:
- Micro-entrepreneurs and the self-employed
- Liberal professions, traders, and craftsmen that are responsible for the autonomous management of their own accounts
Automation can upset the process of different organizational functions, and accounting is no exception. As a business manager, it is important to be on the lookout for new technological developments and to know the possibilities and impact on workflow.
In which sectors is OCR technology most widespread?
The healthcare sector
Professionals working in the medical field, including establishments such as clinics and public hospitals, can take full advantage of automatic invoice recognition as well as specific histories. The centralization of data allows healthcare professionals to monitor their patients after examinations to ensure the success of their recovery.
The legal sector
This should come as no surprise, seeing as the legal sector is defined by an important number of administrative procedures. Whether we are talking about wills, legal documents, or specific notices, the OCR technology will guarantee the proper processing of an invoice, or any other document, scanned, stored, and made available through a dedicated server.
The banking sector
One cannot talk about OCR without mentioning anything related to the banking, insurance, or securities sectors. For instance, just the process of managing checks in itself has been greatly optimized thanks to the OCR technology and automatic invoice recognition.
The industrial sector
Any supply chain that is associated with the industrial sector equally enjoys the functional benefits provided by OCR technology. Several inherent processes related to this field reinforce this need:
- Instant barcode reading
- Serial number verification
- Automatic analysis of expiration dates
In this regard, the tracking of products is optimized, thus promoting better results for businesses, companies, and organizations, while simultaneously guaranteeing customer satisfaction.
Automatic invoice recognition is perfect for the accounting industry
Naturally, the OCR technology is quite widespread within the accounting industry. This sector of professionals greatly benefits from the automatic conversion of invoices and other documents consisting of digital values using Optical Character Recognition.
The pros and cons of automatic invoice recognition
While OCR systems and invoice scanning legitimately enjoy a skyrocketing popularity, this phenomenon has some noteworthy pros and cons to consider.
The pros of OCR
There are many benefits to using software that is dedicated to the recognition of both handwritten and computer-generated invoices. Thanks to the technology behind this solution, we can:
- Quickly scan handwritten documents
- Thoroughly analyze statistics
- Digitally archive our data
- Define and apply solutions to optimize internal processes
- Simplify document access (quick searches)
- Instantly compare several documents at once
- Save a great deal of time
- Avoid the “human error” inherent to manual entry
- Reduce the costs for several financial and physical procedures
- Verify contradictory information, duplicates, or data discrepancies
- Validate payments
- Limit the use of paper and reduce the carbon footprint
The cons of OCR
Like any other solution, digital or otherwise, the OCR system also has certain weaknesses.
For starters, it is yet impossible to guarantee that OCR is a hundred percent infallible in its analysis of documents. As such, some handwriting may prove to be too difficult for your software to identify. In the same vein, the quality of support behind the AI’s knowledge base can also affect its proficiency at automatic invoice recognition. Finally, OCR can also struggle in the case of an overprint, though it will relay a notice regarding the lack of information if necessary. To fix this, you can resort to manual entry to finalize the processing of the document in question.
Another drawback could resurface depending on the nature of the software you use. Some OCR systems require documents to be presented in a specific fashion to ensure proper analysis. In this case, some modifications may be required to process and centralize your data automatically.
To learn more about invoice scanning through OCR, do not hesitate to refer to this article published on the Gestisoft site.
Conclusion
Invoice scanning and OCR technology are indispensable tools for many professionals. While this software isn’t without its flaws, it provides a multitude of benefits (mentioned in this article) that will make you and your colleagues’ lives so much easier, regardless of the nature of your industry, company, or organization. However, take note that OCR may not suit micro-entrepreneurs, artisans, and freelancers who are responsible for managing their own accounts.
As part of the wide selection of software offered online, Microsoft’s OCR stands out the most, bringing certain exclusive advantages. Initially integrated with a variety of solutions designed by the world’s leader in computing technology, Microsoft’s Optical Character Recognition is highly recommended by the vast majority of experts. Naturally, the experts at Gestisoft also favor this OCR when consulting or deploying software solutions dedicated to professionals.
Would you like to upgrade the internal processes of your company to a digital level? Please do not hesitate to use the contact form on our website! Our team at Gestisoft is an expert in the field of CRM and ERP, and we will be happy to answer all of your questions to define the solutions that would best serve you and your market’s profile.
