(Why) Do Companies Still Use Manual Data Entry?

Yes! But… why? It’s slow, error-prone, and expensive. Typing information into spreadsheets is boring work that drains resources and kills employee engagement. Manual data entry is doing a task over and over and over again. A task so simple that a machine could do it…

So, let me get this straight. Despite automated data entry being a big thing, some businesses are still asking their teams to punch keys all day. Risking employee burn out, costly errors, and reputational damage. Why, when you can now use artificial intelligence to capture data from any document and enter that data into spreadsheets, ERP systems, databases, or other business software?

This post looks at manual data entry vs automated data entry. Why businesses will continue to invest in manually entering data. How manual data entry can seriously damage a business. The advantages of automated data entry, and industries that have adopted automated data processing with open arms.

First up, let’s talk about the basics…

What is manual data entry?

Manual data entry processing is the retro way of transferring data from documents – invoices, quotes, customer details, receipts, remittances, orders, delivery notes, product specifics – to ledgers, spreadsheets, databases, etc. 

Documents read and keyed in by people. All day. Every day. A thankless, but essential task. 

Living in a digital, data-driven world, businesses are scaling up. They have no choice. Asking your team to process what can amount to thousands of documents is… Unreasonable. Unpractical. Unfathomable.

Why do businesses still use manual data entry?

Despite the challenges of manual data entry tasks, there are companies that still use it for handwritten text, medical entries, etc.  And, there are advantages to manual data entry…

• Small businesses with small budgets or limited operations
• No need to buy expensive software and tools
• Sensitive data that’s only accessible to a small number of people
• No training employees to use new programs
• No risk of cyber attacks

But…

While manual data entry is the cheap option if you’re looking to save money, there are issues. Businesses that rely on manual data entry will be left behind. Productivity, performance, customer and employee satisfaction, and… revenue will take a nose dive. 

And, there’s a price to pay for manual data entry. Late payment fees, quality control checks, damaged vendor relationships, employee churn, losses due to typos, and potential damage to your reputation.

The hidden cost of doing nothing

So, while you’re achieving your goals, your processes are slow. There’s an abundance of errors due to fat fingers, and your team is unhappy. As your company grows and the paperwork increases, are you able to scale your document processing?

Our eBook – Cost Of Doing Nothing | Zero In On Accounting Automation – reveals what you’re missing out on if you choose not to invest in automation technology, including…

• Inefficient data entry
• Broken internal collaboration
• No internal checks
• Low match rate
• Lack of high quality data
• High employee churn
• Damaged relationships with suppliers

Will your team be able to cope as your business grows? Are you ready to deal with economic instability?

BTW… while our eBook looks at accounting automation, it’s relevant across all industries.

Disadvantages of manual data entry

Before deciding which way to go – manual data entry vs data entry automation – let’s take a look at the manual data entry challenges…

According to a 2018 Goldman Sachs report, the direct and indirect costs of manual, paper-based invoice processing amounts to an eye-watering $2.7 trillion for global businesses.

$2.7 trillion!!!

Manual data entry human error

This is an old story, but it remains relevant. Back in 2006, Italian airline Alitalia announced business class flights from Toronto to Cyprus at $39. Instead of $3,900. 

Huge manual data entry error.

More than 2000 lucky customers jumped on the offer before the airline noticed the mistake. When Alitalia tried to cancel the tickets, it received a ton of negative feedback and to save its reputation, had to honor the purchased tickets. 

This fat finger episode cost the company $7.2 million.

Now, I’m not suggesting every human error will lead to an expensive PR crisis, but… you see where I’m coming from.

Manual data entry errors are impossible to avoid. Humans get tired, bored, and distracted. Who can blame them when they spend hours on end punching numbers.

Manual data entry challenges…

• High data entry error rate
• Data quality control
• Slow turnaround

High data entry error rate

The accepted manual data entry rate is 1%. A data entry error rate above 1% is a problem. Caused by…

• Manual data entry team insufficiently trained
• Documents labeled with unlabeled fields
• Inconsistency in document layouts
• Spelling errors or confusing data
• Unclear handwritten documents
• Stress, distractions, boredom
• Fat fingers

We’re human. We make mistakes. But if the error rate goes above 1%, it can lead to an issue that could cause reputational damage to your business.

Is outsourcing data entry an option? 

It’s certainly saves on software purchases, training, and allows your team to concentrate on more important business tasks. But, there are disadvantages to outsourcing manual data entry…

• Confidential data shared with a third-party – accounts, finance, HR, payroll processing
• Outsourcing to vendors who work with multiple customers – attention divided
• Inconsistent output – quality control, missed deadlines
• They’re human, so errors are still possible
• High cost

Data quality control

Academic researcher Joel E. Ross’ concept of Total Quality Management explains how the integration of an organization’s functions and processes leads to continuous improvement of its products and services. Meeting consumers’ demands and needs.

The 1-10-100 rule is called the cost of quality…

• Error prevention will cost your company $1
• Error correction will cost your company $10
• An unchecked error that causes a process or system failure will cost your company $100

When you have a team managing manual data entry that’s unengaged, there’s a higher chance of errors, corrections, and failures. Inevitably, this leads to higher costs. 

However, the upfront expense of automated data capture software that requires little to no human intervention eliminates correction and failure costs. An automated data entry system can deliver a substantial and fast ROI, because it enables employees to create real value for your company.

Bonus… a happy team is less likely to leave, so employee retention will improve.

Slow turnaround

Manual data entry. It’s sooooo slow.

A good keystroke per hour is 10,000. Your average person manages 7 to 8,000. So, if your manual data entry’s slower, your process needs to be improved.

Take into account that humans need rest periods, toilet breaks, lunch, a chat with colleagues, and your manual data entry starts to look rather sluggish.

AI absolutely will not stop.

Looking again at the Goldman Sachs report it shares findings from Hyland Software, which state that finance and accounting employees spend 30% of their time at work collecting data and responding to inquiries concerning accounts payable – AP – processes. Along with time getting invoices approved and resolving problems that stem from data entry errors.

The time your team spends on manual processes could be better spent on research, analysis, strategizing, growth planning, and supporting other teams. Plus, taking care of other activities that will improve your bottom line. 

Of course, this becomes a non-issue when you integrate an AI-powered, automated data capture solution into your AP operations.

What is automated data entry?

Automated data entry converts data into readable formats and automatically uploads to your database. Also known as automated data capture, the technology behind includes machine learning – ML, robotic process automation – RPA, and artificial intelligence.

An automated data entry solution recognizes patterns and uses algorithms and statistical models in volumes of data to achieve its goal. Learning and improving its performance over time. 

Automated data entry beats manual data entry and outsourcing data entry hands down…

• Fast turnaround and deadlines met
• Up scales as your business grows
• Reduces implementation and training costs

Manual data entry vs automated data entry? Automatic data processing is quicker and requires less human interaction.

Advantages of automated data entry

In the World Economic Forum’s Future of Jobs Report 2020, it’s estimated that artificial intelligence will replace 85 million jobs by 2025. 

But…

It also states that 97 million new jobs will be created in the same time period, thanks to AI.

So, our jobs may change, but we’re safe. 

Let’s look at how automated data entry is the solution to manual data entry problems…

Increased productivity

It’s faster. So much faster.

Manual data entry is time consuming, especially when dealing with large volumes of data from multiple sources. While automated data entry speeds up the whole data entry process. Freeing up your team to work on projects that are more creative and will increase revenue.

Improved data accuracy

Inaccurate data leads to poor customer service. Which leads to dissatisfied customers. Which leads to churn. Which leads to lost profits.

Accurate data supports strategic decision making.

Reduced costs

As your data processing needs increase, so does the need for additional team members or outsourcing. Both of which can end up being more expensive than automated data capture.

Reduced training

Rossum provides a template free, low code, document-agnostic platform. It has an intuitive UI and requires minimal human input.

Your team’s free to work on more interesting projects. Again.

Industries using automated data entry

Data processing happens across most industries, due to the vast amount of data enterprise businesses work with.

Here’s a look at three industries that are automating their data capture process and how they’re benefiting…

Financial services

AI OCR and natural language processing – NLP – solutions like Rossum help CFOs use automated document processing to extract data from bank statements, handwritten surveys, bank cheques, emails, image files, letters, and more.

Read our customer case study with The Master Trust Bank of Japan that explains how the bank reduced manual workload by 75%.

“With Rossum, we see impact early on: from reducing overhead costs to increasing the speed of commercial transactions and significantly reducing the risk of exposure. The solution has a positive influence on both internal users and our clients”
Ryo Kawaguchi, Manager at Master Trust Bank of Japan

Cognitive OCR uses machine learning technology to read like a human with AI’s ability to continuously learn and improve over time.

Logistics

With the logistics industry projected to hit almost $13,000 billion by 2027, in an industry already swamped with hundreds of millions of documents and emails per year, that’s an awful lot of paperwork.

This huge growth means the logistics industry is using intelligent document processing and benefiting with…

• Fast transportation of goods – goods manufactured, packed, and shipped on deadline
• Improved accuracy – automated classification of documents cuts out data entry errors that can lead to payment charges and penalties
• Real-time insights – know when to optimize business processes with data analysis
• Improved internal communication – centralized logistics communication and documentation in a single platform

Read our customer case study with PortPro, and learn how it saved up to 94% of the time spent on every document process. 

Accounts payable

Issues with lost invoices, manual data entry error, duplicate invoices, etc., can result in financial loss, reputational damage, and unhappy customers. 

Companies with large numbers of paper invoices are leading the way with the automation of the business process of their accounts payable departments. Here’s how automated document processing benefits accounts payable…

• Capturing invoices – AP process starts when invoice is received, then uploaded to an invoice processing system for data capture
  
• Streamlined approvals – invoices sent automatically to the relevant authority to mitigate delays and errors
  
• Zero manual data entry – AI OCR software will scan paper documents and capture the data, speeding up the AP process

Read our customer case study from This One – an accounting and consulting firm based in the Czech Republic – is saving its customers 75% of their time spent document processing.

“Today, we harness Rossum’s capabilities to help accounting departments with digital transformation. It’s about saving the planet with paperless invoicing and embracing the innovation in accounting all at once while saving costs. We help accountants to survive this new era of digitalization.”
Denisa Zdarska, Transition and Innovation Manager at This One

Take a look at our Guide to Invoice Processing Automation. It walks you through the what, why, how, benefits, and more. Plus, there’s a free eBook you can download. We also have 11 Tips for Automating the End-to-End process of Accounts Payable.

How to change to automated data entry

Moving from manual data entry work to automated data entry doesn’t have to be tricky. It’s all in the planning. 

First up, you need to map your processes. Check out our How To Do Workflow Process Mapping blog post for the first steps towards automation.

Decide what you want to achieve and involve the relevant teams. Ask questions. Talk to document processing vendors. Sign up for free demos or free trials. 

Test. Test. Test.

Check out the best invoice automation software on the market in 2023.d

Establish data processing goals

Choose goals that align with your business goals and growth plan. 

What tools do you currently use?

To avoid unnecessary cost in the future because you chose the wrong automation solution, you must perform an audit of your current tech stack. 

• Which tools and softwares can be integrated into your new automation tool? 
• Which tools can you get rid of? 

Research document processing vendors

Questions to ask yourself before you buy into automated data processing…

• What’s your budget?
• How many documents do you need to process?
• How big is your database?
• What tools/software do you want to integrate with?
• How many users do you have?
• Is your team tech-led or will it need training?
• When do you want to implement?

Ready to put Rossum to the test?

Rossum’s template free, low code, document-agnostic platform is designed to be managed by business users. It’s intuitive UI ensures that your IT team won’t have to waste time maintaining your AI document processing solution.

You’ll free up resources to drive real value for your company rather than waste your team’s time and talent entering document data into spreadsheets and business systems.

• Capture data without templates
  Deep learning neural network for accurate data capture and increased automation, even if those pesky documents have different layouts.
  
• Rapid ROI & scalability
  Template-free, cloud-native solution with rapid deployment and mitigated IT maintenance costs.
  
• Meet regulatory compliance & standards
  Rossum is ISO 27001 certified, SOC2 Type II and HIPAA compliant, with a dedicated reliability team and enterprise-grade support and SLAs.
  
• Continuous improvement
  Intuitive user interface and easy onboarding IDP solution customized to meet the specific needs of your business.
  
• Improve customer satisfaction
  Reduced delivery delays and goods received on time to create an awesome customer experience.

Tempted to move from manual data entry to automated data entry? Or, switch from your current automated process to Rossum’s intelligent document processing solution.

Manual data entry FAQs

Free eBook: How much does document processing cost your business?

Our free eBook explains the Total Cost of Ownership of three data entry approaches. Learn how much manual data entry is costing your business. How much money are you losing to manual data entry errors? Are you stuck with template-based OCR? How do you tackle hand written invoices?