In this guide, we focus on everyone’s favorite subject: cost. Because the more business a company does, the more documents it has to deal with. We unwrap the real Total Cost of Ownership of three basic approaches to data entry – a manual process, template-based OCR solutions, and AI-based cognitive data capture.
But it’s not just about the price tag. We are going to unravel an analytical framework that you can take and apply to your business to dramatically reduce the costs associated with data extraction.
Optical character recognition – text recognition – converts printed documents into digital images. Using automation, it transforms the scanned document into a machine readable PDF. The PDF can then be edited.
An example would be when you scan a receipt. The scan will be saved as an image, which you won’t be able to edit. OCR software can convert the scanned image into a text document which you can then update. OCR eliminates the need for manual data entry.
The most basic OCR technology scans a digital image. Finds and recognizes letters, numbers, and symbols. It exports the text, but remains an image.
Rossum’s AI OCR scans and converts the characters into an editable format. Using methods such as intelligent character recognition – ICR – it is able to not only recognize the characters, but is capable of understanding changes in style and formatting. Eliminating the need to create multiple templates for different documents.
Everything you need to know about OCR solutions
Despite all the advances in technology, many invoices worldwide are still processed manually. Tedious, paper-based tasks cost too much to manage and will demotivate your team members. They’re gonna quit!
As this problem grows, the potential for human error on the part of your team increases. Making it more likely that mistakes will disrupt your critical business processes.
Fortunately, there’s a way to eliminate these manual tasks through automation. Automating business processes drags your business into the digital age and frees up your resources so your team can focus on the activities that will bring real growth to your company.
To achieve automation, data from those processes must be accessed and structured. The problem is that 80% of all business data is locked away in unstructured formats like paper documents, PDF files, emails, and images. These files can’t be read or understood by OCR automation systems, creating a roadblock to digital transformation.
This is where OCR solutions come in. OCR stands for optical character recognition. OCR is software that can scan printed and digital documents and record the data within them as text.
An OCR scanner is one way to convert unstructured data into properly formatted data that can be used by and for automation systems.
To be fully capable of extracting data from documents and building automation systems, you need to go one step further than OCR.
Rossum goes beyond merely scanning and converting documents, providing an entire suite of features and functions that you can use to take control of your documents across your business processes.
Rossum helps you manage documents and data, assemble reports, and more. Plus, Rossum’s powerful AI engine uses computer vision technology to decipher difficult-to-read text and content.
Many different types of document management solutions offer varying levels of functionality. However, at their core will almost always be some kind of OCR scanner that can take data from unstructured formats and convert it into usable data types.
Best OCR software
When evaluating an OCR solution for your business or operations, there are two overall categories you should be aware of – template-based and cognitive.
Template-based OCR software
A template-based OCR engine captures data from documents according to a predefined template. For every document type, the software is trained to understand where to look for data and what kind of data it’s looking for.
This allows you to convert documents into more useful data. But, this kind of OCR also requires that you build a template for every format of the document you want to scan. It needs manual intervention, as the accuracy of each scan will need to be verified. The second kind of OCR scanning is cognitive OCR.
Cognitive document capture software uses machine learning technology to “learn” through different document formats over time automatically. This removes the need for custom templates for every document layout and allows you to digitize and automate business processes completely.
Different businesses will require different features, but the best OCR software uses cognitive OCR. It is far easier to use and can get you up to speed much faster than other OCR technology.
When looking for OCR software, ensure that it features a robust AI engine. Otherwise, you may run into difficulties when scanning certain business documents that are blurred or have handwritten elements.
Rossum is one example of a platform with a top document processing solution that goes beyond OCR. We provide intelligent document processing that helps you organize and automatically process documents like invoices, purchase orders, packing lists, claims, or any other document format.
As an added benefit, we make integration fast and simple by offering a system that comes trained out-of-the-box to understand and scan a huge variety of document formats.
Another aspect to check for when scanning sensitive documents is the platform’s security. Rossum is fully compliant with ISO-27001 and HIPPA regulations and requirements and is SOC2 Type II compliant. Ensuring that your data is always protected.
Best OCR software for invoice processing
I think we can all agree that paper-based invoice processing is a thankless task. Hence, many businesses are doing away with it entirely. Instead, they’re relying on automation solutions to process invoices automatically.
What is the best OCR solution for invoice processing?
Once again, we return to the two primary categories – traditional OCR vs AI-enabled solutions. The primary limitation of traditional OCR is that it cannot handle much variability. Initially, you might think that invoices are standardized.
To our eyes, they may be, but if you look at a collection of recent invoices at your business, you’ll see that the same field of data can look very different across various invoices. This doesn’t present a challenge for humans, but machines are a different matter.
This variability results in traditional OCR systems making frequent mistakes in the scanning process which then requires your human employees to go and fix those errors. AI-enabled OCR is a better choice for accounts payable invoice scanning software.
This data capture system can “read” documents like a human, identifying certain patterns to know where to look for data. The result is that invoice scanning using this solution results in digital documents that are clean and have fewer errors. Automated invoice handling with machine learning and OCR truly is the future of accounts payable.
OCR document management
What is document management?
The handling, organizing, and processing of business documents for business processes. An example of document management is invoice management.
Although it may look slightly different across different industries and organizations, invoice management generally follows the same path…
Invoice coded and organized
Invoice approved for payment
Money paid to supplier
To successfully manage documents, you don’t necessarily need OCR technology. For some processes, the documents may already be digitized and in a format that is easily used to build automation systems.
For other processes, you may be content to continue to rely on manual labor to deal with the paper documents. However, OCR document management can make your life a lot easier and allow you to automate processes that are based on unstructured data formats, like paper invoices.
Veolia is the global leader in optimized resource management. A French transnational company that designs and provides water, waste, and energy management solutions.
The challenge the company faced was having to work with an inefficient legacy operation for posting incoming invoices.
Working with Rossum, Veolia launched a unified invoice navigation process. Invoices arrive in a centralized entity-specific email inbox, managed by a UiPath robot. Rossum’s cognitive data capture solution enables UiPath bots to execute end-to-end invoice processing automation.
Partnering with Rossum resulted in a 90% reduction in manual workload, 87.5% time saved on each document, with a 90% automation rate.
Dutch-based VWC Group is a provider of office supplies, furniture, internet solutions, printing and scanning, and software solutions.
One of its solutions, FM Module, is used by the AP team to process invoices and purchase orders. The module used multiple templates for invoice processing with customized triggers or formulas assigned to each field.
All good, until the company’s customer base grew. Manually updating and maintaining the templates became a time-guzzling beast.
The Rossum platform was integrated into the Microsoft Azure cloud, which runs the process in the backend. Moving forward, a document is received and stored in the Microsoft Azure cloud, then the Rossum API provides data matching and business checks.
VWC Group saved 87% of time per document, with only 9 seconds validation time for each, and an overall 55% automation rate.
“With its excellent invoice recognition capabilities straight out of the box, Rossum helps us keep our clients happy and makes processing their invoices easier for us.” Henk Wagterveld, Software developer, VWC’s FM Module
Xolo is a cloud platform providing solutions to scale the solo revolution. It’s designed to help individuals, independent contractors, and freelancers with all their administrative needs – contracting, invoicing, accounting, taxation, and compliance.
As the company grew, the digitizer team, responsible for processing all expenses submitted by platform users, struggled to increase headcount to cope.
Xolo partnered up with Rossum to improve the data capture process, and the company was able to maintain a headcount as the company continued to grow.
Partnering with Rossum saved 82% of time per document, with a 43% straight through processing rate, and only 40 seconds validation time for each document.