Automated Invoice Data Entry: A Little Less Human, a Lot More Effective
A shocking number of companies still rely on staff, freelancers, and outsourcing companies to handle their invoice data capture. An oft-quoted 2019 Billentis report states that “90% of all invoices worldwide are still processed manually.” Maybe this surprises us at Rossum because we’re hyper-aware that this dependency can be costly, disruptive, and loaded with security risks that no NDA or anti-virus program can prevent.
Before we get started, we’d like to state that the experiences and opinions in this post are the author’s and do not necessarily reflect those of Rossum.
Maybe you already know that cognitive data capture improves accuracy and efficiency of invoice data entry by minimizing the potential for human error. You might be trying to get C-suite buy-in for a platform that uses machine learning to handle invoice data capture. You could be reviewing a pitch for such a solution from one of your managers, a partner, or a potential service provider. You may have an idea of how to streamline invoice data entry with machine learning. Right now, you might have arrived at this page during your search for a solution that automates accounts payable (AP) data entry.
In this post, I’m going to look more closely at the impact of human nature on invoice data processing. You should gain a deeper, more subjective understanding of how bad the manual data entry process can be for your company. You will also learn more about how artificial intelligence can eliminate those problems while enabling you to benefit more from your company’s internal and external human capital.
Manual Invoice Data Capture Can Lead to Disaster
We humans can be so unreliable. We get bored, tired, and annoyed. Some of us have short attention spans. Some of us are lazy. Some of us are corrupt. We all make mistakes.
In the context of your business’ AP process, these flaws are unforgivable. One typo can snowball into a catastrophe, as some people at, say, Deutsche Bank, the Tokyo Stock Exchange, or JPMorgan Chase & Co. will tell you.
Of course, these are extreme cases. At the same time, they reveal that such losses can happen to any company. A single faulty keystroke from one tired, disgruntled, or conniving data entry specialist has the power to destroy a business – SLAs, NDAs, and other contractual obligations be damned.
To prevent such a nightmare scenario, you can remove the human element from most of the process. Cognitive invoice data capture prevents typos and gets more accurate with use. Initially, you’ll need one or two AP team members to validate the data the platform extracts from invoices before exporting the data to your accounting software or enterprise resource planning (ERP) systems. However, this task requires little time compared to invoice data entry, relieving your AP team of repetitive mundane labor and enabling them to take care of various engaging and value-generating assignments.
In-House Invoice Data Entry
In most companies, data capture specialists are low in the hierarchical structure. Some see this function as the starting point of their career path, and do the work as entry-level employees or interns. Others take on these roles temporarily.
No matter how pleasant the working environment, the monotony of entering data from paper invoices or copy-pasting from electronic documents will wear most people down. Try it yourself – take a stack of invoices or other business documents, open a fresh spreadsheet, start typing the data into it, and see how long you last before your eyes start glazing over and a thick numbing fog rolls over your brain.
Go ahead, I’ll still be here waiting for you.
Didn’t do it, did you? I know I wouldn’t – I’ve done it before, and you couldn’t pay me enough to do it again. But more about that later.
We can safely assume this tedium has the potential to drive a high turnover rate of data entry specialists. Therefore, we can add onboarding and training costs to the unnecessarily high total cost of operation (TCO) of manual data capture. Incentives like personal and professional development programs might help keep data input specialists engaged for a while, but once a better opportunity presents itself – and one always does – they’re going to leave that role.
Shifting our focus back to cold hard numbers for a moment, a 2018 Centriworks article estimates that 49% of the average finance team member’s job is spent processing transactions. The post then calculates the direct labor cost of financial data processing would come out to more than $150,000 for a small company with a two-member finance team. While the math might be off – the author forgot to factor in the aforementioned 49% – the total of nearly $77,000 is still significant.
And when we return once again to the human factor, the prospect of spending nearly half one’s working hours doing data processing is soul-crushing.
Specialized Invoice Data Entry from Freelancers
A simple Google search for “freelance data entry” reveals that companies of all sizes across several verticals are offering remote data input work. Popular freelancing sites such as Upwork and Freelancer have thousands of job listings in the “data entry” category.
At the same time, thousands of individuals and agencies on these sites are offering their services as data input services. So there’s always a steady supply of workers ready to meet an ongoing demand. However, a closer look at the profiles leads to a logical assumption that most freelancers are willing to do data entry as a means of earning steady pay, but they’re most likely not all that committed to it.
For example, of the 27 best freelance data entry specialists on Upwork, only four list themselves as data entry experts or pros in their titles. The rest are primarily marketing experts, creatives, or customer service specialists. Fourteen mention data processing in their respective overviews.
This small sample is indicative of what you’ll find if you do a bit more digging: data entry is a stopgap, not a career choice. As soon as something better comes along, your data entry freelancer is going to take it. If they’re locked into a payment-on-delivery agreement, or threatened with a poor rating and review, you can safely assume they won’t be motivated to deliver top results.
The Costly Hazards of Outsourcing Invoice Data Entry
An abundance of business process outsourcing (BPOs) companies have data extraction and input teams. This is another indicator that manual invoice and form data entry services are still in high demand.
To stay competitive and profitable, offshore BPOs pay data entry specialists low wages so they can offer low-cost, high-volume services. Yes, their services free you and your team from the drudgery of data entry. And, yes, they enable you to devote your time and energy to building your business.
These benefits lose some of their luster when the less appealing aspects of human nature come into play. The boredom-bred fatigue that increases the potential for typos can be costly. You or someone on your team could end up having to check the accuracy of the BPO’s work regularly. Also, the loss of control over your data could force you to dedicate more time, money, and resources towards security measures.
Personal Reflections on Data Entry
So far, I’ve done my best to back up my observations about how human nature is to blame for this costly and detrimental approach to data entry. I’ve also made a number of assumptions, some logical, some based on experience.
Now I’d like to give you some deeper, more personal insights into manual data entry. If you’ve ever done this kind of work yourself, I salute you. If you enjoyed the task itself, I don’t quite understand you, but I have massive respect for you.
My So-Called-Life as a Data Entry Clerk
I have worked as a data entry clerk at various points in my life – twice during a work-study program while studying civil engineering in university, and once between writing jobs when I first moved to Prague. So I know how tedious the work can be.
Actually, I’m being polite. Data entry sucks.
While doing each of these gigs, I’d leave work feeling dumb, drained, and in need of a stiff drink. Everybody has bad days at work. When doing data entry, every day felt like a bad day.
In my experience, it doesn’t matter how you’re handling data entry – in-house, outsourcing to a BPO, or hiring a freelancer or two – chances are fair to high that the people doing this work are not enjoying it. Even if you’re giving them ample opportunities to grow, even if your company offers them incredible perks, these people are not enjoying the task of entering data from invoices or other business documents into spreadsheets and/or various business systems. It’s the digital equivalent of screwing caps onto bottles in an assembly line. Nobody wakes up looking forward to spending a workday doing that. Hell, nobody looks forward to spending an hour doing that.
There’s no disputing that you and your staff can focus on value-generating activities. But there’s a good chance that you’re entrusting a vital back-office task to a person or people who are not engaged and, at worst, frustrated with their work. Regardless of what your thoughts are about that attitude, that’s the reality.
There were days when bottomless cups of coffee and catnaps in WC stalls weren’t enough to keep my head from nodding forward into my monitor. In the early stages of each of the three projects, I began to dread getting out of bed to trudge through another day of typing numbers and words into spreadsheets. The work has instilled a lifelong loathing of spreadsheet programs – I still can’t open an Excel file without a vague spasm of revulsion.
Most of my fellow data entry specialists felt the same way. The few who managed to get through each day psychically and spiritually unscathed were of an almost mythical nature – I sometimes wonder if they really existed, or if they were figments of my imagination, like geeky Tyler Durdens of the data entry world.
But, no, these types really do live among us and try their best to do great work for the companies they serve.
People Take Data Entry Jobs Because They Have To
What I’m getting at here is this: I know for a fact that my colleagues and I let accuracy slip due to the overwhelming tedium of the job. The increasingly unreasonable quotas and deadlines only made matters worse. We procrastinated. We played video games. Our lunch and coffee breaks got longer. We called in sick more frequently. We missed quotas and deadlines. Work got sent back to us for corrections more often. Some of us got fired, some of us quit. In the case of my university gigs, we all just dug in and endured the boredom until it was time to get back to our studies.
The only good thing about these jobs was the social aspect. I worked with some wonderful people. We had a good time when we weren’t doing data entry – we had to in order to maintain our sanity and our will to live.
Ultimately, before you pay to have a person or people to do your data entry, consider that their nature could end up costing you a lot more than you expect.
Data Entry Clerks Are Fallible
I know there are great data entry specialists, experts, and professionals doing excellent work as you read this. I’m sure they’re committed to delivering accurate results quickly. Whether their motivation is financial, the pride of a job well done, or the assurance of more stimulating work in the future, I have the utmost respect for these hard-working people.
But you and I both know that these people don’t take on this kind of work because they enjoy it or they believe they’ll make a lot of money doing it. They see data entry as a way to earn an honest wage, a stepping-stone to a better gig, or a stopgap – it’s not a deliberate career choice. I doubt you’ll ever meet a child that wants to be a data entry clerk when they want to grow up. If you do, that kid learned sarcasm at an early age.
Nobody Enjoys Doing Data Entry
If you look hard enough for anything online, you’ll find it. Case in point – a quick Google search for people who enjoy data entry will produce results, with testimonials in various forums and job boards across the Web.
Maybe some of these people actually enjoy retyping data into spreadsheets or copy-pasting invoice data into accounting and business systems – work that is so boring it’s physically painful. And I’m not talking about the pain of carpal tunnel syndrome, back and spinal issues, and other health hazards associated with sedentary jobs. I’m talking about tedium so intense it induces headaches and nausea and punts your spirit into an abyss of fuming despair.
But different strokes for different folks, right?
Data Entry Lacks Variety
Data entry brings to mind a Bon Jovi lyric:
It’s all the same, only the names will change
Every day, it seems we’re wasting away
I have to call shenanigans on articles and job posts that talk about data entry offering variety. Whatever the type of document, whatever the system clerks are entering data into, the task is the same: type or copy-paste numbers and/or texts into a software program. Invoice data is invoice data, regardless of what naming conventions different vendors and customers use. The same goes for, say, purchase order data or financials in annual reports: It’s all the same, only the names will change.
I’m not dumping on an honest way to make a living. Rather, I’m offering a reality check to build or reinforce awareness of the way many, if not most, people feel as they’re doing data entry: bored, frustrated, undervalued, uninspired, depressed… the negativity goes on. With this comes an increasing potential for inaccuracies and late project completion, both of which have knock-on effects throughout your business operations.
With this more personal perspective in mind, you might now want to ask yourself, “Do I really want people who don’t care about my data handling my data entry?”
If your answer to that is either “Yes” and/or “I could care less about what these people think”, then I wish you and your business the best of luck.
If, on the other hand, your answer is “No” and/or “I care and value the people who work for me”, then read on to see how machine learning and automated data capture can increase the value of your company’s human capital.
Cognitive Data Capture Can Give Workers What They Want
A 2019 survey by monday.com revealed that, given the chance to make one improvement to their work, more than 32% of the working population want to get rid of repetitive admin tasks. Over 70% want automated data entry.
Survey respondents want automation not simply to avoid doing life-sucking chores like data entry, but because they have a genuine desire to do more for their employers and clients. Not surprisingly, 63% of workers say that repetitive tasks are robbing them of the chance to deliver their best work.
Right now, your AP team can access a cognitive invoice data capture solution that automates data entry. In a matter of minutes, you can set up a platform that starts working right out of the box, ensuring swift, cost-effective, and accurate data extraction. As you can see, the four-step process only requires human input at the import and data validation stages.
Machine Learning For Smarter Data Entry
The platform’s machine learning capabilities ensure that it grows smarter with usage. Unlike human operators, the solutions’ neural network never gets bored, tired, or distracted. It doesn’t need breaks and can process hundreds of invoices in just minutes for just pennies per document. Sometimes referred to as AI-powered OCR, cognitive data capture is a smart way to ensure your AP teams are engaged in their tasks, and delivering real value.
You Can Automate Accounts Payable Data Entry Today
The human aspect of manual data entry can have a massive impact on your business operations. Data entry errors born of boredom, laziness, and frustration can snowball into disasters. Fortunately, you can now access technology that can prevent such a scenario completely. A cloud-based AI-powered invoice data capture solution delivers massive benefits across your organization, including:
- Increased cost savings – less man-hours and HR costs per invoice processed; also more opportunities to get early payment discounts from suppliers who offer them
- Greater value generation – your AP team can take on a more active cross-functional role in areas such as fraud prevention, supply chain finance, and supplier relationship management
- Improved information sharing – a cloud-based platform enables other teams to quickly and easily access invoice data to, for instance, authorize refunds, check late or missed payment claims, and report to auditors
If you outsource the task to freelancers or a BPO, letting AI handle your invoice data capture saves the time and cost you’d spend on vetting, interviewing, and onboarding candidates, not to mention reviewing, correcting, and validating their work.
Perhaps most importantly, automated AP data entry will free your financial experts from a mind-numbing, life-wasting chore.