Invoice extraction or invoice automation is one of the most useful office efficiency tools today. It is artificial intelligence and machine learning-based to ensure that it is never out-of-date and can function to your needs better. Invoice extraction is alternatively called the following:
- Invoice data extraction
- Invoice capture, and
- Invoice automation
The name of the tech differs according to what the service provider calls it. Each form is slightly different from the other, but they essentially carry out the same tasks. Invoice data extraction refers to the actual extracting of data from invoices submitted, such as the amount, the sender’s name, bank account details, etc. Invoice capture refers to the software actually capturing the invoices from the server via emails without you having to find it yourself. Together, they make the invoice automation process.
Every company has a consistent flow of invoices sent in by vendors, sellers, customers and other external members affiliated with the company. The invoices can be processed in one of two ways – it can either be manual or it can be automated. Manual processing requires much more effort than automated processing. If a software can do something for you in a fraction of the amount of time as you can, it’s best to trust that software with the work.
There are several benefits of automated or computerized work over manual labor. The same tasks conducted either way can have massively different results in several terms. We’re talking about how long it takes to complete the tasks, how many errors are made, and so on. Automated invoice extraction and processing takes much less time than manual because that is quite literally its only job.
Gathering invoices and sorting through them could take your accounting team days, while it will only take their computer minutes as long as it’s enabled with the appropriate software. Not to mention, it’s also tedious work – having to go through the same document with mildly different details – and can take a toll on the employees’ efficiency and motivation to work.
Automated invoice processing is what we call invoice extraction tech. Let’s learn a bit more about it below.
Invoice extraction process & its benefits
Invoice extraction almost fully eliminates any additional or tedious work on the part of the employee. A human would generally have to scrounge their emails to find the invoices sent to them, then make a record of it and feed the necessary details into the system. This means that there is a lot of work to do between receiving an invoice and paying it off – work that need not have to be done by you in the first place.
Automated invoice processing is such that it is integrated with the very server of the company, emails and the like included. This means that any invoices sent to you via email or otherwise will be fed into the system without you having to carry out those extra steps in the middle. Not only does this help you out in case you’ve missed out on any invoices but it also helps you process them without you really having to do much. This frees up much of your time to do finish other tasks and it also helps employees be more productive in other spheres of work.
How Invoice Extraction Works?
Invoice extraction is an interesting form of artificial intelligence meant solely for the purpose of business. It uses Optical Character Recognition (OCR) and Robotic Process Automation (RPA) to train an AI model specifically for capturing and processing invoices. OCR is meant for extracting textual and other kinds of data from the documents inputted into the software. RPA refers to bots that were built or created specifically to make human life easier. RPA and OCR processes can be combined to build you a fabulous invoice processing software enabled with AI and ML.
Software like this follows a systematic process to capture invoices and file them for you appropriately.
- Pre-Processing of the document – some invoices come in templates, while some are more unstructured. Pre-processing converts all relevant documents (i.e. invoices it has found) into the same format.
- Detection & recognition – the software detects and recognizes the data in the form it has been provided and it identifies what kind of data it is.
- Extraction – the invoice data is then extracted and then put into simpler formats for the human to look at.
Limitations of invoice extraction
As great a productivity tool as it is, invoice extraction does have a few downsides that overshadow its usefulness. It is, after, a computerized process. Although it’s more accurate than a human in several ways (such as not making mistakes in documentation or in textual or mathematical data), it still cannot spot several errors in the invoices.
Another downside is that not all OCR software is equipped for handwritten text. That generally requires a more modern OCR. This can prove a setback if it’s not the one you have, especially if you need to process a lot of unstructured bills and invoices written with pen and paper.
All in all, invoice extraction is a brilliant tool that makes the life of the accounts department at any firm much easier. All that you need to be worried about as a user is to actually pay off those invoices after they have been processed by your computer. Backed by artificial intelligence and machine learning, invoice extraction is one of the most common software purchased by most companies.