Billions of invoices are in circulation at any given moment. Employees must then process most of these invoices manually and then store them, which is time-consuming, particularly in accounts payable (AP) contexts.
Moreover, one recruitment website suggests that an experienced AP employee might be able to process four or five invoices per hour. In an accounts payable context, ‘process’ means:
Therefore, it might be somewhat ambitious to suggest that an AP employee could process an invoice every 15 minutes – especially considering the time required for exception handling, validation measures (like four-eye checks) and more.
Becoming an experienced AP accountant is challenging and requires a high level of skill and knowledge. You might ask why experienced accountants in many organisations are wasting their time (and expertise) repeatedly copying information from a PDF into an internal system. Manually entering data is a dull and repetitive process requiring no skills other than concentration and attention to detail. Enter invoice data extraction software.
The primary purpose of invoice data extraction software is to alleviate the burden of manual data entry across all industries.
Over the years, invoice data extraction has become increasingly sophisticated. Initially, rudimentary Optical Character Recognition (OCR)-based invoice data extraction software was not as accurate and fast as human employees entering data. Now, AI-powered invoice software’s accuracy surpasses human ability.
Invoice data extraction software uses advanced techniques like OCR to interpret invoices and accurately extract key data points into a structured format.
Essentially… everything.
Standard data extraction software can extract all the salient information from an invoice, including the financial, invoice and seller details. Newer, more sophisticated technologies can extract graphic elements like logos and signatures.
In addition to core data points, newer AI-powered invoice data extraction technologies can extract the invoice's metadata, like time received and classification (i.e. receipt, invoice, purchase order etc.). This metadata empowers more precise tracking within the AP process.
Invoice data extraction tools don’t just extract the information; they deposit it in the requested format (Excel, JSON, CSV, etc.) and into the desired repository (e.g. an internal database).
So far, we’ve mentioned that invoice data extraction software alleviates the tedious and time-wasting nature of manual data entry. However, its benefits are more nuanced than just saving time. Let’s break this down further.
The burden of manual data entry will often lead to burnout and an increased capacity for errors. That’s not to mention the obvious factors – humans take breaks, sick days, overlook invoices, etc. A technological solution doesn’t just extract data in seconds – it extracts consistently.
Our invoice data extraction software saved DF Capital Bank 95% of invoice processing time – read the full case study here.
One of the main incentives of enterprise-level hyperautomation is that it can save millions of pounds in the long term. Novuna Business Finance (formerly Hitachi Capital) built a tech stack centred around our innovative technology, designed to save businesses millions by automating invoice data entry. Explore the case study here.
That’s not to say that smaller businesses (SMBs) can’t benefit from automation. To grow, SMBs should focus on strategic revenue generation initiatives rather than manual administrative processes.
While AP or invoice processing platforms offer comprehensive functionality, they can be inflexible. Automating the invoice processing workflow with data extraction tools empowers organisations to achieve greater control and flexibility over their financial data.
If you have specialist requirements, training the model can be extremely time-consuming. The way around this is to work with a data extraction software vendor that willl train the model to your requirements, which generally takes only 48 hours.
The pricing models of specialist invoice processing solutions tend to exist as a subscription or per-page pricing. While it may be tempting to submit your invoices to ChatGPT for data extraction to save costs, the result will be compromised information security and less accurate results.
Optical Character Recognition (OCR) is a legacy data extraction technology many industries have used to capture invoice data. Yet, in growing companies, OCR can be limiting.
For example, imagine you’re working with a new supplier. They send over a batch of invoices in Mandarin, which your staff lack the training to interpret. Nor is OCR the answer here. OCR is trained on specific visual templates, meaning that structural and linguistic variations generally yield poor results. You could, of course, train the OCR algorithms to read Mandarin… But who has time for that?
The other option is to train an AI-based extraction model to read, translate, capture and validate the information. One key advantage of AI for data extraction is its flexibility. Unlike OCR, you can train AI algorithms to extract data even in new, unforeseen contexts.
Our experience has shown that training OCR to extract from multivariate data or a new data point is a painstaking process. AI is quicker and far easier. Even as a customer, you can train some AI models to recognise new data by clicking through a few training examples.
Modern businesses benefit from up-to-date, tried-and-tested solutions. But OCR is not defunct. AI technologies use OCR as a key technology, but with other technologies (such as natural language processing (NLP) and machine learning-based statistical techniques) to ensure accuracy and adaptability.
Likewise, automating data extraction uses a combination of technologies to conjoin the processes of uploading, extracting, receiving and validating invoice data. Let’s take a deep dive into how you can automate invoice processes.
Setting up an automated workflow reduces the number of manual touchpoints, such as manually downloading the invoice from its source and then uploading it to the extraction platform. Robotic Process Automation (RPA) is a popular (and somewhat retro) choice for automating batch extraction from invoices.
Combining traditional OCR technologies and RPA mechanisms with newer AI technologies can create winning workflows. For example, we collaborated with Enterprise RPA to automate invoice data extraction for several major clients in UK housing. When the clients received emails containing invoices, AI-powered algorithms extracted the relevant data and delivered it to their desired repository. RPA ensured the data moved through each stage of the workflow successfully.
Ultimately, automating data extraction from invoices can take many forms. For example, you could directly set up a connection with the invoice extraction platform via API (often the easiest way to automate data extraction if you’re working directly with the software supplier). You could also use automated platforms like Zapier or Workato for lightweight integration with the extraction platform.
Evolution AI’s platform, Transcribe, can extract key information from invoices in three easy steps.
Sign up here – we’ll then send you a verification email. Click the link in the email, and you’re good to go. You will be directed to Transcribe’s dashboard.
In the dashboard, head over to ‘Documents’ by clicking the panel on the left-hand side. Once you’re there, select ‘invoice’ as the document type (if you’re unsure, the on-screen instructions will guide you).
Click to upload the invoice(s). A little wheel will appear to indicate that the document has been uploaded. Then, the document status will update to ‘Processed’.
If you click on the document, the invoice data will be displayed. Track each data point by clicking on the desired data point. A green box will then indicate its location in the document.
To download the data, click ‘Output’ and then the download button. You can then download the invoice data in your desired format (Excel, CSV or JSON).
It’s that easy to receive data from an invoice in less than a minute. Happy extracting!
As we’ve covered, there are multiple ways to automate invoice extraction with Transcribe, such as via API. Companies like Novuna Business Finance and DF Capital have successfully established a real-time feed of invoice extraction, ensuring prompt and accurate data extraction.
When deployed successfully, invoice data extraction software shaves minutes off the data extraction process while promoting superior data quality. One of the key benefits of invoice data extraction software is its flexibility – you can customise the automation process and output format to your preference.
Want to learn more about Evolution AI’s invoice data extraction software for enterprises? Contact our financial data project team at hello@evolution.ai or book a demo.
