What’s the True Cost of Bad IDP for Your Business?

<strong>What’s the True Cost of Bad IDP for Your Business?</strong>

Having the right information available at your fingertips can make or break your business. An outdated, unsophisticated intelligent document processing system might create more work than it’s worth. However, an intelligent document processing system can transform how you do business and save time, frustration, and money.

Our world is becoming increasingly digital. Yet many operations managers, archivists, and HR, systems, or accounting managers still spend a large portion of their time wrangling piles of paperwork or digitizing legacy documents to reconcile their physical documents with their digital materials. In fact, just 10% of invoices are extracted using automation by Accounts Payable.

Not only can having boxes filled with files needing to be processed be overwhelming, but processing the files can be time-consuming, frustrating, and expensive. After all, manually transcribing an invoice takes an average of 105 keystrokes, 111 seconds, and $2.03. In the chaos, it’s all too easy for invoices to become lost, leading to duplicate or late payments. Plus, 12.5% of manually transcribed invoices require rework, which takes an average of 5.55 minutes.

Modern Intelligent Document Processing (IDP) systems offer an attractive alternative to both in-house and outsourced manual data entry. While IDP is an umbrella term that encompasses Optical Character Recognition (OCR), computer vision, machine learning, natural language processing, and other technologies, not all IDP solutions are built the same. Some can certainly help automate the extraction, interpretation, and classification of digitized documents, but others can add complications to your workflow with too many exceptions and subpar machine learning capabilities.

Having the right IDP tool allows accounts processing teams to focus on more important tasks than entering data, boosting organizations’ productivity, so it’s not surprising that the technology is continuing to develop. Some document processing technologies still require structured metadata. However, next-generation IDPs like Rossum can extract, analyze, sort, and understand data from documents, with no templates or restructuring required, thanks to advances in artificial intelligence (AI) and machine learning (ML). Some IDP tools can even cross-reference information in files with existing databases and lexicons to validate them. These AI- and ML-driven tools are typically ready for deployment within a few days and can be up to six times faster than manual data entry, so it’s not surprising that the global IDP market size has a projected Compound Annual Growth Rate of 36.8% between 2021 and 2026 and is expected to reach a value of $3.7 billion in 2026.

The Shortcomings of Legacy IDP And OCR

Promising everything from zero errors to increased productivity, early IDP and OCR systems showed incredible potential. Unfortunately, as you probably already know, many of the previous iterations of this technology are inefficient and fall short — especially older IDP and OCR systems. However, even some modern solutions haven’t fully lived up to this promise.


Most IDP and OCR systems are never truly, fully automated. While they may automate some parts of the document processing process, organizations still find themselves mired in manual work because we’ve never solved the problem of variability.

This means that AP staff members need to convert existing documents into a format that the IDP technology can process. If every document was the same, converting documents would be quick and easy. However, they’re not and won’t ever be, so companies need to spend both time and money changing existing documents into formats accepted by their IDP technology.

The good news is that more advanced IDP and OCR systems are capable of automatically processing documents. When you invest in a modern, advanced IDP or OCR system, you won’t need to spend countless hours slogging through manual work. Instead, you can count on your modern system to quickly extract the essential information for you.


Template-based OCR and IDP systems can extract data from documents in certain formats. Since they rely on image-based templates or text-based rules, your accounts payable staff will need to spend time configuring the program and telling it which information to look for and where to look for it.

If you only work with one business partner and they consistently use a single format, setting up a template-based OCR system won’t take too long. However, if you work with different partners, chances are each has a unique invoice layout, so you’ll need to sort, reformat, and exempt templates.

While using a more dated template-based IDP system means spending hours sorting and reformatting templates in order to extract essential information, using a modern IDP system like Rossum will save you valuable time. With all the recent advancements in AI and ML, next-generation IDPs can easily extract, analyze, and understand data from documents, even when they aren’t in a specific format. For example, you won’t need to rearrange incoming invoices from your various business partners to ensure the address lines and totals sections are in the same place. Instead, your IDP system will be able to recognize these on its own.

A Lack Of Accuracy

Compared to the 87.5% of manually transcribed invoices that don’t require rework, template-based OCR and IDP platforms’ boasted 98%-99% accuracy rate might sound incredible. All things being equal, this may be an accurate statistic. However, even a few errors can cause minor and major inconveniences, adding time and manual revision to what should otherwise be a hands-off process.

For example, if your IDP mistakes an m for an n in your supplier’s name, you can quickly fix the issue. However, if it mistakes a 1 for a 7, you might find yourself paying $70,000 instead of $10,000 or scrambling to prevent the payment from going through.

A brittle and inaccurate IDP system will add processes and additional, tedious manual work rather than entirely replace the data entry process. Even a strictly template-based system that’s 100% accurate will require manual data entry when it encounters variations in invoices that don’t match any existing templates.

Organizational Commitment

A lack of organizational commitment can also hinder an IDP system’s capabilities. Your IDP will struggle to reach its full potential without total employee buy-in. After all, if employees don’t understand how it can help them or how or when to use it, they might be wary of relying on IDP technology.

IDP technology has the potential to boost productivity, cut costs, save time, and raise employee morale, but a bad IDP system can be more hassle than it’s worth. An outdated document processing system requires time-consuming template configuration and can create more manual work and potentially costly errors, so it’s understandable to be skeptical of IDP technology until you see an intelligent solution in action.

The Rossum Difference

Most existing IDP technology is brittle and requires specific formats, creating additional manual work for you. However, an intelligent solution that relies on AI and ML can adapt to changes and handle any document, regardless of whether it follows a template, eliminating the variability problem. Enter Rossum.

With Rossum, you don’t need to worry about reformatting your documents into a specific format or template. Instead, our powerful AI-driven technology will intelligently identify characters with industry-leading precision. Rossum automates document communication, whether your business partners send PDFs of packing lists over email or paper invoices via snail mail.

For example, Rossum helped PepsiCo reduce costs and hiring overhead and improve team morale by working with Innovation Path to build a Ui-Path-based bot. The bot reached 95% straight-through processing (STP) automation and replaced most of the workload related to incoming invoices, leaving the Accounts Payable team with more time to focus on other accounting tasks, as only one administrative staff member processes the remaining 5% of invoices with Rossum’s validation interface.

“We had a never ending-backlog that caused low team morale. Many colleagues were already about to quit before Rossum was implemented,” Jana Vlkova, Head of Accounts Payable at KMV/PepsiCo CZ, shares. “Now, we are always able to complete our work on time.”
Contact us today for a demonstration of what modern IDP solutions can really do, and we’ll change your mind about modern IDP solutions once and for all.

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