5 Steps an Invoice OCR System Takes to Automatically Extract Data from Invoices

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Printed invoices can be a major barrier for businesses that are about to upgrade their business operations. After all, the accounts department staff may have to spend countless hours manually reviewing each invoice, collecting the data from it, and processing it. OCR technology can be of great assistance at that moment! There are two ways to handle invoices: manual and automated. Information entry, accuracy verification, and documentation preservation are all parts of the human processing of invoices. On the contrary, automated invoice processing uses OCR (optical character recognition), a text or data-extracting method that converts scanned documents into editable files.

What is Invoice OCR and How Does it Help Extract Data from Invoices?

Invoice OCR, also known as OCR invoicing, is the process of removing pertinent information from scanned or PDF invoices and transforming it into a machine-readable format that is both editable and searchable.

Since no two bills are the same, extracting information from them is challenging. Businesses struggle to set up software system exploitation templates for automatic data extraction from invoices. This is where invoice OCR can prove to be an excellent software for extracting data. From medical to finance, many industries can use the best of what this technology has to offer to simplify the processing of invoices.

Steps an Invoice OCR system Take to Automatically Extract Data from Invoices

The invoice OCR technology eliminates various challenges that walk in at the time of invoicing and allow a seamless digitization. There are a number of steps involved in the process of OCR that accelerate the extraction of data from invoices. Let us take a look at them.

Invoice Image Capture – The PDF files that are non-scanned, printed bills, or any other form of the document are scanned at this step in order to be turned into high-quality JPG pictures with a resolution of 600x600x3 and 300 DPI. Several preprocessing methods are used in this stage. The images are analyzed to prepare a deep learning model for training when we have finished processing all of the images. The main purpose of image preprocessing is to make it easier for invoice OCR software to distinguish between the text and the backdrop.
Text Detection – The text detection process is the next stage in the invoice OCR This system extracts the texts from the invoices after preprocessing the images. Text detection categorizes areas of the input invoice as text or non-text components; to put it simply categorizes them into graphs or tables.
Text Recognition – As the name implies, this step is all about using OCR software to identify information and determine the context in which each data field, such as product name, product quantity, invoice date, invoice number, etc., belongs. Recognizing the text’s characters is known as text recognition. This is done using visual cues and a language model that suggests the most likely terms based on the nearby letters and the common words used in invoices.
Data Validation – Data validation becomes essential since the invoice OCR system involves minimal to no human involvement. Here, several tests are used to ensure the quality and correctness of the recognized data. These procedures for data verification serve to ensure the data’s logical consistency so that it may be removed and used without any problems. This significantly reduces OCR mistakes.
Data Extraction – The extraction of data/text is the last and most important stage. The invoice OCR software works to extract invoice data from various areas of the scanned document, such as headers and footers, tables, and other places, and then makes use of that data to fill the necessary fields in the electronic documents, feeding those documents into the necessary accounting system.

Final Thoughts

A few years ago, it was typical to enter a supermarket and observe cashiers entering price tags one after another to record your purchases. You are then handed a sheet of paper listing all the things you purchased along with their prices, quantities, and total cost paid, as well as other important shop information. This document serves as the invoice for everything you purchased and paid for. It is obvious that just obtaining it is a laborious effort. But electronic processing, such as that used in e-invoicing, has shown to not only reduce effort and increase accuracy but also to significantly reduce labor costs as well as other associated logistical costs.

An organization can benefit from digitizing invoices on a number of fronts. Businesses may better track their operations, offer better customer service, increase staff productivity, and cut expenses. So without wasting much time you can choose the invoice OCR system that’ll help you automatically extract data from invoices. After all gone are the days when accounts department staff had to manually extract all the data from the different invoices.