AI-OCR for Invoice Processing: Automating Accounts and Payments

Businesses thrive, as artificial intelligence (AI) expands its scope to the most strenuous tasks, i.e. accounting. Automation powered by machine learning algorithms coupled with Optical Character Recognition (OCR) systems is all set to streamline invoice processing. The combination of AI-OCR for invoice processing is enabling businesses to automate every step from mail sorting to data extraction and management.

Let’s take a closer look at how AI powers OCR systems to automate invoice processing while ensuring optimum accuracy and efficiency.

Traditional OCR Vs AI-OCR for Invoice Processing

While traditional invoice processing relied on entirely human efforts, AI for invoice scanning services deploys automated systems for data extraction and storage. AI-OCR for invoice processing trains machine learning algorithms to understand and extract data from unstructured invoices into correct formats. Human involvement is, therefore, minimized to performing final checks on the extracted data and verifying invoice information.

AI for invoice processing also referred to as ‘Automation of Accounts Payable (AP)’, employs machine learning models and frameworks. It involves extensive model training with historical data for the AI-OCR systems to understand complex invoice formats and information. Here’s how the combination of AI and OCR streamlines invoice processing and storage-

Step 1: Data Capture and Extraction

The first step involves manual scanning of physical invoices into systems or importing of faxed or emailed invoices for conversion into images. AI-OCR eliminates over 80% of all data entry operations under invoice data capture, extraction, and indexing.

Step 2: Data Classification

The first step involves manual scanning of physical invoices into systems or importing of faxed or emailed invoices for conversion into images. AI-OCR eliminates over 80% of all data entry operations under invoice data capture, extraction, and indexing.

Step 3: Data Storage and Access

Once the system accurately extracts and classifies invoice data, it is stored in tabular formats including spreadsheets or balance sheets. The archived data can then be easily accessed, edited, and searched for further processing and general ledge coding purposes.

Also read- Improving Data Analysis with AI-powered OCR Applications

Significance of AI-OCR for Invoice Processing

a) Higher Operational Efficiency

A typical account payable executive can process no more than 20 invoices per day that translates to delayed payments and inaccessible early discounts. With massive data processing capabilities, AI-OCR for invoice processing accelerates operations with minimal human intervention while maintaining high accuracy and efficiency. Data capture with AI can automatically detect invoice header and line-item data followed by validation of invoice data with system records to boost accuracy.

Source- Oracle

AI-OCR can significantly improve employee efficiency by automating critical operations such as mail sorting, invoice data capturing, matching invoices with purchase orders, etc.

2) Reduced Costs

Almost 40% of accounts payable departments report high invoice processing costs as their biggest challenge. To pull down on unnecessary costs and human resources required for invoice processing, AI-OCR is the ideal solution. With open-source machine learning tools and frameworks, AI-OCR models can reduce operational cost for invoice data capture by as much as 80%.

3) Improved bottom lines

While AI-OCR for invoice processing saves on time-consuming tasks, it enables AP professionals to focus on more strategic decision making. Human resources can out their proficiency to analyze more critical operations such as budgeting, planning, and forecasting. While improving productivity, AI-driven automation in accounting significantly impacts other AP functions such as procurement, payments, purchasing, and distribution.

Also read- How AI OCR for Financial Spreading Strengthens Risk Management

Tech Stack Used in AI-OCR for Invoice Processing

1) Tesseract OCR

Tesseract is an open-source OCR engine that automates data extracted from large documents and images into multiple output formats. With flexible training options, Tesseract enables developers to easily master multiple accounting tasks such as financial spreading and invoice processing. For enterprise-scale automation, Tesseract delivers optimum accuracy and efficiency while lowering operating costs and maintaining scalability.

We, at Oodles, have hands-on experience in deploying Tesseract OC for extracting text from identity cards such as Aadhar cards, passports, PAN cards, etc. With over 95% accuracy achieved, the model is suitable for data extraction from scanned invoices and financial reports.

2) Amazon Textract

As a proprietary software option, AWS Textract enables businesses to add document text detection and analysis to existing applications. The method involves setting up an AWS account and fetching predesigned SDKs and APIs to perform data extraction for invoice processing.

3) Google Cloud Vision API

Another proprietary software option, Google Cloud Vision API enables businesses to build cloud-based OCR systems for automating image analysis. The Vision API can detect and extract text from images of documents as well as real-world environments.

4) OpenCV

OpenCV is a machine learning library of programming functions that facilitates real-time computer vision applications to classify recognized images with annotated labels. A combination of Tesseract OCR and OpenCV is highly efficient at automating data extraction and classification from invoices, identity cards, health records, etc.

Also read- How-to Guide: Deploying Tesseract OCR With Python and OpenCV

Deploying AI-OCR for Invoice Processing with Oodles 

As global businesses gear up for extensive digital transformation, AI and its technologies are emerging with effective solutions to combat enterprise challenges. Aa a well-positioned AI Development Company, Oodles propel greater force to global digital transformation by harnessing AI technologies and building value-generating solutions, such as AI-powered OCR.

Our AI team’s rich experience in training and deploying AI-OCR models enables us to automate several enterprise operations, such as-

a) Digital onboarding

b) eKYC

c) Online healthcare data management

d) Invoice and financial report processing, and more.

Our AI-OCR services for invoice scanning involves intelligent field extraction, multiple language support, domain-specific model training, and multiple output formats. Connect with our AI development team to know more about our AI-OCR capabilities and services.