OCR for Invoicing Process: All that Businesses Should Know

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Processing payments and maintaining accounts with paper invoices is an outdated approach. Among the few drawbacks of such processes are the high costs, great manpower requirement, much time consumed, and a great carbon footprint. But can the process be done more efficiently, wasting less paper, time, and human labor? YES, using OCR for the invoicing process would digitize and automate the whole procedure. 

What is OCR Invoicing?

It is a process that trains a template-based Optical Character Recognition model for some particular invoice layouts, sets up an input path for those invoices, extracts the data, and then integrates the data that is extracted with the structured database. 


It is a semi-automated data extraction procedure that can extract specific field information from fixed document templates. OCR technology is unable to extract information that is “content-specific” and to overcome this limitation, Intelligent Document Processing is done. 

OCR for Invoicing Process

As invoices are not alike, extracting info from them is a complicated task. OCR text recognition automates the process of extracting data from invoices. The steps of OCR invoice processing are as under:


  • In the first step, all the PDF invoices are scanned and turned into JPG files using multiple pre-processing techniques. When all the images are processed, they are sent for deep learning.


  • Once the complete data is obtained, it is sent to the detection model which recognizes the paragraphs, tables, and forms in the input images. 


  • In the third step, the location of the text is identified and its extent is outlined by the bounding boxes. 


  • In the last step, the text is extracted from the detected regions. 

Why Digitize Invoices?

A business can gain many advantages by digitizing its information. Here is why any business should consider digitizing invoices. 

  1. To Automate Processes

With optical character recognition online, the whole process of invoicing is automated. All the invoice images are taken automatically, the tables and text are extracted from them, the errors are corrected, whether the product meets your demands are checked, and the claim is processed when everything is checked out. Although it is a great jump from what the insurance sector has done in the past, still it can be fruitful. 

  1. To Increase Efficiency 

When the invoices are digitized, many processes become smoother and faster. For instance, a retail store that deals with some regular clients for products and processes payments by the end of the month. The store can save time if they automate the invoice management process. Vendors have to just upload their bills either on the website or the app to get instant feedback whether the image was manipulated or fake, whether it was of good resolution or not, thus saving a lot of time and increasing the employees’ efficiency to do those tasks that are really important and urgent. 

  1. To reduce Costs

Automating the invoices using optical character recognition services helps the same retailers save their money. An invoice that has to pass through several reviewers for error correction is now replaced with a single system with OCR software. Moreover, a computer can process the number of invoices faster as compared to being done manually. 

  1. For Better Storage

In case there is any dispute, the vendor can recheck the app for all the invoices they have made and also the post-processing results of every invoice, providing details about the products, quantities, cost, taxes, and discounts. Businesses with automated data entry systems can also retrieve the information wherever and whenever they want. 

Limitations of OCR for Invoicing Process

If the OCR (Optical Character Recognition) is not completely automated, it poses several restrictions for the extraction of invoice data and makes the implementation of automation complicated. The data extracted from the new invoice by the OCR software is not 100% accurate. The reason is that different invoice styles and templates require an initial familiarity of a system with the invoice template. 

Below are the restrictions of OCR services for invoicing: 


  1. At the field level, the inaccuracy of OCR can be as high as 30%. 
  2. In some situations, a human intervention might be required to feed the invoice data into the system and then also review the extracted data. 
  3. If the quality of the image is not good, the OCR  document scanner has difficulty in extracting as well as protecting the data. 
  4. It can not work efficiently on the characters that are handwritten. 

Final Thoughts

Manual OCR invoicing is no longer a solution to work holistically and long term. To truly gain an ROI from the solution, the businesses need a tool that is accurate and can save time by automating the manual work. Thus, the good option is to choose OCR for the invoicing process that cuts the company’s costs by automating the whole procedure, saves the team’s time for important tasks, and also increases the ROI. 

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