Invoice processing is a critical component of any business. The manual handling of invoices can be time-consuming and inefficient. In the upcoming years, it is likely that larger businesses, which handle a significant number of payments, will experience a rise in their monthly payout obligations. And to meet this demand, the accounting teams of these businesses must use the latest automation technology like OCR.
Fortunately, technological advancements have paved the way for a transformative solution: Invoice OCR (Optical Character Recognition). By using the power of OCR technology, businesses can now automate and streamline their invoice-processing workflows. It saves time and costs. In this article, we will explore the concept of using invoice OCR and learn how it functions.
What is Invoice OCR Processing?
OCR is also known as Optical Character Recognition. Using this technology, computer systems can read and capture text from a digital file (e.g., a PDF) and convert it into editable digital data. OCR in accounting is most often seen in extracting data from invoices. OCR invoice processing automates the collection of key information. It helps the accounting team spend less time manually entering data and reduces the risk of costly errors.
How OCR Streamlines Invoice Processing?
Let’s discuss the process involved in OCR invoice technology and how it benefits several businesses.
Reduces Manual Errors
Suppose your business has a finance team that manually codes a high volume of bills every month. There is a high probability that they can make errors. OCR technology saves this issue. By introducing OCR in the accounts team, you can automatically enter invoice data and apply account codes based on correct data.
Invoice OCR processes data at high speed and accuracy. It makes you more confident that the data are correctly entered. You don’t have to find and fix errors later when reissuing payments from overpaid or underpaid bills. It simplifies the workload for your finance team.
Simplifies Data Preparation
OCR technology eliminates manual data entry by fetching information from printed documents, such as bank account numbers and invoice details, and converting them into machine-readable formats. This technology can help businesses save time and reduce operational costs by automating data processing workflows. OCR can also improve the accuracy of data by reducing manual entry errors.
Using OCR, businesses can streamline their financial management processes and focus on more important tasks. Additionally, OCR can help banks improve their client experience by providing digital channels such as online banking and mobile apps.
Reduces the Processing Time
Invoice processing is a data-intensive job. To enter a new invoice payment into your accounting software, you should identify the vendor, enter the invoice number, items, amounts paid, and more. After you enter these data, you should apply the account codes.
OCR invoice processing reduces the significant time on bill coding. It reduces the time by 60% or up to three minutes per invoice. It saves a lot of time, especially when finance teams get hundreds or thousands of invoices at a time.
Helps in Managing Receipts Easily
OCR technology can help businesses extract data from paper receipts and invoices. It makes receipt management easier and more efficient. Invoice OCR software can automatically analyse and organise the data, reducing the need for manual data entry. This technology can also improve data accuracy by reducing manual entry errors.
Additionally, OCR software can integrate with accounting software. It allows businesses to automatically enter invoice data into their ERP for the accounts allowing businesses to automatically input invoice data into their ERP for the accounts payable (AP) team to access.
AP (Accounts Payable) is an essential function in any business. Since OCR eliminates manual data entry, the accounting team can take on many responsibilities and focus on other essential tasks. With this facility, teams can spend less time on exhausting tasks and instead focus on other high-value activities. This automation technology will increase the output. With this, the finance team of your business will have more time to streamline their month-end close, manage budgets, and more.
Updates Effortlessly and Integrates With Other Software
OCR technology can help businesses integrate financial data with accounting software to automate publishing and transaction matching. OCR software can also integrate with other software, such as document management systems and procurement software with e-invoicing software capabilities, to streamline invoice processing and reduce storage costs. Using OCR technology, businesses can optimise their financial management processes, reduce operational costs, and focus on more important tasks.
In conclusion, invoice OCR technology offers a game-changing solution for businesses looking to streamline their invoice processing workflows. By automating the extraction of key information from invoices, such as vendor details, invoice numbers, and payment terms, OCR eliminates the need for manual data entry. Integrating OCR with accounting systems enables seamless data transfer and ensures accurate and up-to-date financial records. With the potential to revolutionize financial processes, invoice OCR is a transformative tool no business can ignore.