Reduce TCO of paper-based processes with paperless document automation

In the previous blog, we established a firm foundation for a paperless office in the form of invoice automation. Taking it forward, this post talks about the costs associated with paperless document automation. Since every organization has 20% structured and 80% unstructured data with vendor invoices forming a non-trivial part of the latter, reducing costs related to invoice processing is our primary goal.

The vendor invoice processing method we discussed in the previous article was entirely paperless and it brings its own costs along. In fact, the three other approaches – manual data entry, traditional OCR solutions, and template-based OCR solutions don’t even come close to the AI-based invoice processing technique in terms of TCO (Total Cost of Ownership).

Also, when it comes to managing the accounts payable (AP) processes, organizations look for the cheapest available solutions, at the time of buying decision. So, what do you think is the most affordable yet efficient means to handle AP processes – manual data entry, traditional OCR solutions, template-based OCR solutions, or AI-based intelligent document processing (IDP)?

Well, don’t stress out! We are here to help you with a fact-based comparison of all the four document processing techniques so that you can decide which is the best paperless document automation solution for your organization.

Manual Document Processing

Manual document processing involves a human to receive the document, manually enter the document data into internal systems/Excel sheets, process the document, send it for approval, and complete the desired action.

For instance, if we consider invoice processing, there’s no invoice reader or software that can convert invoice data automatically into Excel sheets for calculation. The AP department staff has to manually perform all the operations. So, we calculated the cost incurred in the entire process and even referred to few studies made by others. The average cost of processing came out to be $12 per invoice.

Not only that, manual invoice processing led to 32% late payments and 36% vendor calls/emails to remind the company of due payments.

Now, if you multiply the cost per invoice and the delay in payments to the number of invoices you process each month (maybe hundreds, thousands, or millions), you can get an estimate of the total monthly expense in invoice processing. Just don’t freak out for the time being.

Traditional OCRs for Document Processing

When OCR was first introduced to kick-start paperless document automation, it was not traditional as it did reduce the manual data entry tasks. OCR is a data extraction software which reads text from any image (scanned or photographed) automatically while reducing human intervention to an extent.

But that was not all. Traditional OCRs were unable to interpret the data they extract and also lacked the capability to store it in an organized manner. They could just scan the image and extract everything on the document only to feed a cluttered information in the internal systems.

In invoice processing, traditional OCRs could convert PDF invoice to Excel but failed to interpret the type of data and where it needs to be stored for easy processing. As a result, the AP staff had to manually interpret the extracted data and make edits to turn the clutter into analyzable data.

Hence, the costs were never reduced. Instead, the cost of setting up OCRs and again manually interpreting the extracted data added to the total expense. Invoice processing was never fully-automated with traditional OCRs.

Template-based OCR for Document Processing

As mentioned, 80% of an organization’s data is unstructured and it’s hectic to structure it manually or using traditional OCRs. Hence, the innovators came up with a template-based data extraction tools. In this, the user needs to define a template for each unique layout of document. These template-based tools are integrated them with traditional OCRs. Consequently, the OCR could now extract the document data based on the template structure and feed into the internal systems for further processing. The image/ PDF invoice data extraction process was going great for a while.

But here’s the rub. There’s no fixed structure for any document – even those of the same type. Let’s take the case of invoices. Every vendor has a different format for invoices. The fields in the invoice also vary with the type of purchase made. That said, it’s impossible to provide one template each for every invoice format.

Due to variability of the documents, template-based OCR could only automate invoice processing up to 40% and save 20% of the costs. The invoices that did not follow the already fed template were processed incorrectly and the AP staff was back on the job again, rectifying the mistakes and validating the extracted data for authenticity.

Template-based OCRs failed to interpret the data and were unable to understand the context of a field’s data. Instead they focused on the positioning of the fields in the invoice and made mistakes when the field positions were different from that of the template. This again required human intervention for correcting the mistakes.

Was affordable invoice automation still a far cry?

AI-enabled Document Processing

AI text recognition/ document interpretation became the first end-to-end automated document processing technique with the ability to interpret document data irrespective of the documents’ layout and text. It can understand the context of the data and eliminate the need for templates.

AI-enabled document processing is actually an integration of template-less OCR solutions and AI-based intelligent data interpretation. It combines machine learning along with natural language processing and computer vision to understand the context of data before and after OCR extraction and store it in internal systems with an added advantage of document decision support. That said, your unstructured documents can be mined into actionable insights with AI-based document processing.

So, if you use AI-enabled IDP SaaS solutions, you are actually boosting your business productivity up to 200% and reducing TCO up to 300%. What’s more? You can expect 90-95% of accuracy within 90 days of implementing it. Moreover, you are free from any template maintenance costs, hardware costs, and up-front license costs.

Given all the four scenarios of document processing, it is clear that manual processing can never be a cheap and efficient approach. Also, paperless document automation is very difficult with manual document processing.

Hence, we are left with OCR-based solutions with AI-enabled intelligence integrated with it. The fourth model, AI-based document processing, is indeed the best way to avail cost efficient yet productive paperless document automation.

Paperless Document Automation : KlearStack Way

KlearStack is an AI enabled data extraction and interpretation software with a perfect fusion of template-less, end-to-end automated, document decision support. It is a comprehensive solution to paperless document automation with an ability to reduce document processing costs while increasing the productivity of the business.

KlearStack uses AI text recognition along with ML and NLP techniques to interpret the document data and provides actionable insights after feeding it to the internal systems. Hence, if you have made up your mind for a paperless document automation solution with low TCO, KlearStack is your go-to solution.

Book a free consultation call to know more about how KlearStack can help you achieve paperless document automation.

Stay tuned for our next blogs on starting a paperless office.

Paperless Invoice Processing with KlearStack’s IDP Solution

In today’s digital world, businesses are striving to achieve complete paperless invoice processing automation to streamline their accounts payable (AP) operations. Manual invoice processing is a tedious and time-consuming task that can result in errors and delays, leading to inefficient AP workflows. By embracing paperless invoice processing, businesses can achieve greater efficiency, accuracy, and cost savings.

So, what is paperless invoice processing, and how can KlearStack help businesses achieve complete automation? Let’s dive in.

What is Paperless Invoice Processing?

Paperless invoice processing refers to the automation of the invoice processing workflow through digitization, data extraction, and workflow automation. In other words, it is the complete elimination of paper invoices and manual data entry, allowing businesses to process invoices electronically.

With paperless invoice processing, businesses can capture invoice data, validate it against purchase orders and receipts, and route it for approval, all without manual intervention. This leads to faster processing times, reduced errors, and greater visibility into the invoice processing workflow.

5 Steps to Paperless Invoice Automation

Paperless invoice processing is the way of the future, and it can help your business operate more efficiently, save time, and reduce costs. Here are the five steps to achieve complete paperless invoice processing automation:

1.Digitize Your Invoices:

The first step towards paperless invoice processing is to digitize your invoices. This can be done through scanning paper invoices or receiving electronic invoices directly into your accounting software. The goal is to have all invoices in digital format so they can be easily processed and stored.

2.Data Extraction:

Once the invoices are digitized, advanced Optical Character Recognition (OCR) technology can be used to extract the relevant data from the invoice. This includes information such as the invoice number, supplier name, date, and line item details. OCR software can save a significant amount of time by automating data entry.

3.Automated Invoice Matching:

The next step is to match the invoice to the purchase order and receipt of goods or services. This can be done through automated invoice matching software that compares the data extracted from the invoice to the purchase order and receipt data. Any discrepancies can be flagged for review and resolution.

4.Approval Workflow:

Once the invoice has been matched and validated, it is ready for approval. An automated approval workflow can be set up to route the invoice to the appropriate approver(s) based on predefined business rules. The approver(s) can then review and approve the invoice electronically.

5.Payment Processing:

Once the invoice has been approved, payment can be processed through electronic payment methods such as ACH or wire transfer. An automated payment processing system can be set up to ensure that payments are made on time and in accordance with payment terms.

How Does KlearStack Achieve Complete Paperless Invoice Processing Automation?

KlearStack’s Intelligent Document processing platform provides an end-to-end solution for paperless invoice processing automation. Here’s how it works:

Data Capture and Extraction:

KlearStack’s AI-powered OCR technology captures and extracts invoice data from both structured and unstructured documents, including PDFs, images, and scanned documents.

Data Validation:

The extracted data is validated against purchase orders and receipts to ensure accuracy and completeness.

Workflow Automation:

KlearStack’s workflow automation engine routes the validated data to the appropriate stakeholders for approval, eliminating the need for manual intervention.

Seamless Integration:

KlearStack integrates with leading ERPs, such as SAP, QuickBooks,Tally and many more, ensuring seamless data transfer and eliminating the need for manual data entry.

Real-Time Visibility:

KlearStack’s dashboard provides real-time visibility into the invoice processing workflow, enabling businesses to track invoice status, identify bottlenecks, and take corrective actions.

Benefits of Paperless Invoice Processing with KlearStack

By implementing paperless invoice processing with KlearStack, businesses can achieve the following benefits:

  1. Increased Efficiency: Paperless invoice processing eliminates manual data entry, reducing processing times and improving productivity.
  2. Improved Accuracy: The AI-powered OCR technology and data validation ensure greater accuracy and completeness of invoice data.
  3. Cost Savings: By automating invoice processing tasks, businesses can reduce labor costs and improve overall efficiency.
  4. Enhanced Compliance: KlearStack’s platform helps businesses comply with regulatory requirements by ensuring accuracy and completeness of invoice data.
  5. Real-Time Visibility: KlearStack’s dashboard provides real-time visibility into the invoice processing workflow, enabling businesses to track progress and identify bottlenecks.

Here are some statistics that highlight the importance of paperless invoice processing:

  1. According to a report by Ardent Partners, manual invoice processing costs organizations an average of $15 to $20 per invoice, whereas the cost of processing an invoice with automation drops to $2 to $4 per invoice. The same report by Ardent Partners states that paper invoices account for 70% of all invoices received by organizations.
  2. A survey conducted by Billentis found that paperless invoicing can reduce invoice processing costs by up to 90%.
  3. According to a study by PwC, 80% of businesses still rely on paper-based processes, which can lead to inefficiencies and errors. The same PwC study found that automating invoice processing can result in a 50-80% reduction in processing costs.

These statistics highlight the potential cost savings and efficiency gains that can be achieved through paperless invoice processing and automation. By implementing a solution like KlearStack’s end-to-end accounts payable automation platform, businesses can streamline their invoice processing workflows and reduce costs associated with manual processing.

Conclusion

Paperless invoice processing is the future of AP automation, and KlearStack’s Intelligent Document Automation platform provides an end-to-end solution for complete accounts payable automation. By embracing paperless invoice processing, businesses can achieve greater efficiency, accuracy, and cost savings, while also enhancing compliance and visibility into the invoice processing workflow.

If you want to learn more how KlearStack can help achieve your organization complete paperless invoice processing automation, schedule a demo with your experts today!

Go Green with Yellow – How to Bring Paperless Office Culture?

Not long ago, the revolution of digitization started and many of the industries started moving towards paperless technologies for efficient management and optimal use of the resources. With the advent of cloud storage and digital document management, creating and sharing of the virtual documents have become the new norm. The papers are being replaced with the shareable documents that can be stored, shared, and signed digitally to completely avoid the hassle of physical document management. But there are multiple industries like legal, finance, healthcare, and banking that still employ the traditional paper-based document processing and that leads to increased costs and inefficient management of the documents.

Going paperless not just contributes to saving the environment but it also helps in making a complete shift in information sharing and processing in an organization. As the industries are realizing that the management of paper-driven information is expensive and not reliable, the shift towards paperless management is paving its way. The advantages of going paperless are numerous but the shift doesn’t happen overnight and may require a technological overhaul and changing the key business processes to adapt to the new culture.

Read More: Moving beyond template-based OCR: Why Do Away With Rigid Templates?

Practical Strategies for Paperless Office

Some of the practical strategies that will help in making a shift and reducing the paper load in the industry are discussed below:

1. Redefining Business Processes:

To reduce the volume of paper in the industry, the first step is to identify the processes that are heavily reliant on the paper and then create alternate processes to reduce paper usage. Starting with the internal documents that are circulated inside the organization and then moving towards the external ones like contracts and proposals. As digital signature has got the same validity as the traditional one, using the electronically signed documentation can optimize the documentation workflows. Making digital copies of the meeting notes, handbooks, product manuals on the notes, and cloud will reduce the need for hardcopies and will also improve the sharing of information between departments.

2. Making a Technological Change

Every change comes with a better and equipped system to alter the processes and the transition to the paperless culture is possible by opting for the technical solutions which can optimize the unstandardized processes. As an influx of information and data is generated in industries every day and most of that is unstructured making it almost impossible to channelize it for resourceful purposes. People in the accounts and finance department are flooded with the paper-based invoices and payment orders and manual processing leads to delays and reworking.

By upgrading to the latest technologies (like Intelligent Data Extraction and Intelligent Document Processing), it becomes easier to handle the information and also structure the processes. Artificial intelligence and machine learning-based data extraction technology can automate the invoicing and payment order processing, reducing the need for paper-based invoices and receipts. Klearstack is based on intelligent document processing technology and has a self-learning model to increase the accuracy of the data extraction to 90% in 90 days. To support the goal of paperless office culture, making a shift in the infrastructure is imperative for every organization.

Read More: Evolution of Automation up-to Intelligent Automation and Beyond

3. Taking Everyone With Change:

Without taking everyone on board, it won’t be possible to bring a change in the organization. Clearly define the objectives behind the change and convince everyone in the team to engage and support the activities. If the employees think about going paperless as just another exercise, it won’t drive any result. The management has to put the effort into educating their staff about the purpose of reducing paper processing in the industry and the benefits they can reap with the new paperless technologies. Setting actionable initiatives and engaging everyone to reduce the use of paper to create efficient processes, eliminate redundant data-entry tasks for a sustainable work environment.

Finally training the staff to use the newly employed software for data extraction and processing and setting a familiarity with the newly laid processes will help in paving a way to paperless culture in the industry. By simplifying the workflow with psychological and technological change in the organization, maximum benefits can be derived. Taking ideas and feedback from the staff about the change in the workflow and involving them in the process will lead to higher returns. However, no organization can completely eliminate the papers but by improvising the system with intelligent data processing and electronic document management system, the use of paper can be greatly reduced.

Switching to AI-based data extraction models like Klearstack will automate manual processing in the office and achieve paperless office culture within the organization. To know more about Klearstack solutions, download the free e-book now.

Conclusion :

It’s high time that organizations across all domains and irrespective of the organization size should adopt such AI based tools to reduce the wastage of resources and leakages in the cash-flow. To learn how KlearStack can help achieve your organization a complete paperless office culture , schedule a demo with our automation experts today!

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