Invoice OCR: Definition, Benefits, How It Works?

Invoice OCR: Definition, Benefits, How It Works?

(Last Updated On: December 19, 2023)

What is Invoice OCR?

Invoice OCR, short for Optical Character Recognition, is a process that scans paper invoices for text and utilizes advanced software tools with AI algorithms to extract key elements—the invoice number, vendor information, buyer information, invoice date, payment due date, and more. OCR converts a paper invoice into a digital format, allowing AI-driven tools to effortlessly categorize and organize the extracted information.

Invoice OCR lets you simplify your workflow and focus on what truly matters. It lets you handle the heavy lifting of data entry so you can drive your financial operations forward.

If you’re tired of spending countless hours on manual data entry from numerous invoices—then invoice OCR might be for you. Perhaps, it’s high time to say goodbye to the time-consuming process and redirect your time and resources towards more strategic financial tasks.

Benefits of Invoice OCR 

1. Time Saving and Efficiency

Previously, manually inputting invoice details was both time-consuming and error-prone. With OCR, data extraction from invoices is swift, eliminating the need for manual entry entirely. This process, which once took hours, now happens within minutes, allowing your team to focus on critical financial tasks such as analysis, decision-making, and strategy development.

2. Improved Accuracy and Reduced Errors

Human errors, like typos or incorrect keystrokes, can lead to significant discrepancies in financial records, impacting reporting and analysis. OCR precisely captures and processes invoice data, minimizing the risk of human error and ensuring the integrity of your financial information.

3. Enhanced Organizational Productivity

By eliminating manual invoice processing, your team can focus on strategic financial analysis and decision-making. This shift allows your workforce to identify cost-saving opportunities, optimize financial strategies, and explore new avenues for business growth, adding greater value to your organization.

4. Cost Reduction and Resource Optimization

Reduced manual data entry errors lead to fewer financial discrepancies, resulting in cost savings from error rectification and potential penalties. With OCR handling data entry, your team can focus on strategic financial analysis, enhancing productivity and delving deeper into financial insights, identifying growth areas, and developing effective financial strategies.

5. Real-Time Data Accessibility and Analysis

Invoice OCR provides instant access to digitized invoice data, enabling swift decision-making and improved cash flow management. With data readily available in digital formats, financial professionals can quickly retrieve, review, and analyze information, facilitating timely and well-informed financial decisions.

How Does Invoice OCR Work?

Step 1: Upload Your Invoice Receipt in OCR Software

Forget the paperwork! Simply upload your invoice and let the Invoice OCR software take over. No more manual handling, just a smooth transition to digital processing.

Step 2: Double-Check Whether Invoice Details are Accurate

Check that all details on the invoice are accurate. This would include: Product descriptions, Quantities, Prices, and any Applicable Taxes.

Step 3: Send Invoice for Approval

Get approvals in a flash! The software sends your invoice to the right people for a quick review and authorization. No more waiting around for endless back-and-forth approvals.

Step 4: Enter Invoice Data Into Your Accounting Software

Upon approval, the OCR software automatically fills in your accounting software with all the verified invoice data. Sit back and let it handle the heavy lifting.

Step 5: Set Up Payment

Once the invoice is verified, approved, and entered into your system—choose your preferred payment method.

Whether it’s EFT, checks, or credit cards, the software would integrate with your preferred payment method, ensuring a smooth and hassle-free transaction experience.

Step 6: Record and Store Invoices

Maintain a well-organized record of all invoices, approvals, and payments for future reference, audits, and compliance.

Store them in a secure and easily accessible location, whether digitally or physically.

How KlearStack’s Invoice OCR Takes Charge of Your Invoices?

KlearStack is a perfect solution that eliminates the painstaking manual data entry for you, thereby saving valuable time and effort. It liberates your team from manual drudgery and redefines how you manage financial data.

1. Get it Right Every Time

Extract invoice data, avoid mistakes that can happen with manual entry. You can actually save time with KlearStack’s quick processing, and handle invoices the smart way!

2. Handles Everything for You

No Format Worries. Manages all types of invoices. Whether they’re on paper, scanned, or digital—ensure accuracy every time.

3. Easy to Use, Easy to Connect

You don’t need to be a tech whiz – as the solution is easy to set up, saving you both time and money. Additionally, it works with what you have, i.e., your existing systems, ensuring a smooth data flow without any interruptions.

4. Grows with Your Business, Saves Resources

Stay worry free about your business’ growth. Handling more invoices with upto 99% accuracy.

5. Fewer Mistakes, More Security

KlearStack reduces errors significantly, ensuring your financial records are always accurate. The solution keeps your sensitive financial information secure, following the highest security standards.

6. Know Your Numbers, Save Money

Keep an eye on your data, with easy-to-use dashboards—making it easier to manage your operations. Cut down on manual labor costs and avoid costly errors, giving you more room to grow and succeed.

Challenges of Data Capture from Invoices KlearStack’s Invoice OCR Tackles These Challenges for You
Template Variability
Poor Quality Documents
Handwritten Documents
Key-Value Pair Extraction
Line Items Extraction
Accuracy of Data Capture

 

Invoices Giving You a Headache? KlearStack Has the Cure!

Handling invoices with a variety of layouts or components can be quite the puzzle.

So let KlearStack handle invoices for you.

From vendor details to payment information, it’s got you covered—with over 100 data fields to extract.

Schedule a demo session now!

FAQs on Invoice OCR

What is an OCR on invoice?

Invoice OCR, also known as Optical Character Recognition, is a technology that automates data extraction from invoices. It scans and converts paper-based or digital invoices into digitally searchable and editable formats. It is the process of extracting critical information like the invoice number, vendor information, buyer information, invoice date, payment due date, and more.

What is OCR in accounts payable?

OCR in accounts payable automates the extraction of data from invoices, thus making it more searcheable and editable format. It expedites the processing of invoices, streamlining accounts payable tasks for enhanced efficiency.

What is OCR in procurement?

OCR in procurement automates data extraction from procurement documents. It simplifies the process of digitizing and categorizing procurement information, facilitating seamless data organization and efficient procurement management.

What is invoice scan?

Invoice scan refers to the extraction of essential data from invoices like the invoice number, vendor information, buyer information, invoice date, payment due date, and more. It is the process of using scanning technology to convert physical invoices into digital formats.

Ashutosh Saitwal
Ashutosh Saitwal
www.klearstack.com/

Ashutosh is the founder and director of the award winning KlearStack AI platform. You can catch him speaking at NASSCOM events around the world where he speaks and is an evangelist for RPA, AI, Machine Learning and Intelligent Document Processing.