Do You Have Automated Invoice Data Extraction for Your Invoices?

Have you ever wanted to time travel to see what the world was like in the past or might look like in the future? 

About 25 years ago I was working with a client in the water cooler industry to design a solution to enable their drivers electronically record deliveries of the bottles of water that sit on top of water coolers.  This involved visiting offices, factories, schools, an international airport, and even a prison! 

In the late 1990’s, it was rare to find an office where everyone didn’t have a computer.  Granted, they weren’t anything like we have today, but they ran accounting software, spreadsheets, and other software. 

That was until I stepped into an office belonging to a railroad company.  It was bright and sunny when I hopped down off the truck and got a couple of bottles of water to deliver. 

Entering the office, I felt like I had travelled back back nearly 200 years in time into a scene from the Charles Dickens story ‘A Christmas Carol’. 

After my eyes adjusted to the dim interior, I immediately noticed a lack of computers (I didn’t see any), the piles of paper on each desk (there were about 40 desks in the office), and the staff who appeared zombie like, as they monotonously reviewed and coded paper from one side of their desks, and then placed it on the other side. 

As I was preparing to write this post about Automated Invoice Data Extraction, that office popped into my head, and I realized the changes in technology and how we process supplier invoices is so radically different now to that brief visit to the railroad company all those years ago. 

What is Automated Invoice Data Extraction (AIDE)? 

Automated Invoice data extraction is a process where specialized software extracts relevant information from invoices, such as supplier names, dates, amounts, product details, and more. This data is then automatically populated into an accounting or enterprise resource planning (ERP) system, cutting the need for manual data entry.  It is a core component of Supplier Invoice Automation. 

The Benefits of AIDE 

  1. Time Savings 

One of the primary advantages is the significant reduction in time spent on data entry. Automated systems can process multiple invoices in the time it would take a human to manually input data from a single one. 

  1. Reduced Errors 

Human data entry is prone to errors, from transposed numbers to missed line items. Automation drastically reduces these errors, ensuring the accuracy of financial records. 

  1. Cost Efficiency 

By cutting down the time dedicated to data entry, businesses can reallocate resources to more strategic, value-added activities. 

  1. Scalability 

As a business grows, so does its volume of invoices. Automated systems easily scale to accommodate growing numbers, without the need to proportionally increase staffing levels. 

How is AIDE different to OCR (scanning)? 

OCR (Optical Character Recognition) is a technology that converts different types of documents, such as scanned paper documents, PDF files, or images captured by a digital camera, into editable and searchable data. 

Its primary purpose is to recognize text within images. This allows for the conversion of scanned documents into formats where the text can be edited, indexed, or searched. 

It deals predominantly with recognizing characters but doesn’t inherently understand context or the meaning behind the recognized text. 

AIDE involves finding specific data points within an invoice and extracting that information for further processing. This includes vendor names, invoice numbers, dates, line items, and amounts. The aim is to automate the entry of this data into accounting or ERP systems.  

It not only recognizes text but also interprets it. Using templates or machine learning models, it understands where to find specific data points within various invoice formats and how to categorize them. 

OCR can be used to feed data to AIDE but because OCR is not 100% accurate, newer technology such as that developed by OnePosting can extract data from invoices with ZERO Errors thus enabling AIDE to extract, interpret, match, code, and if everything is correct, auto-approve invoices to be posted to ERP or accounting software. 

Conclusion 

Automated invoice data extraction is revolutionizing accounts payable, bringing unprecedented levels of efficiency and accuracy. While it’s essential to approach its implementation with care and awareness of potential challenges, the long-term benefits are undeniable. Businesses that adopt this technology not only save time and resources but position themselves to scale seamlessly as they grow. 

So how would the railroad office look today? 

I would imagine it’s a lot different.  Staff may not even need to be in the office – they could work remotely. 

Some staff might be upskilled to investigate discrepancies, either on the purchasing side of the railroad company, or on the fulfilment side by their suppliers. 

Others may be undertaking analysis roles using supplier invoice data as a source of information to streamline operations, facilitate getting better deals from suppliers, lowering costs by availing of early payment discounts, and many other tasks that were simply not possible when their focus had to be on manual paper processing. 

Download our white paper on Supplier Invoice Automation: Streamlining Processes, Reducing Errors, Maximizing Efficiency.

Finbarr McCarthy