Optical character recognition (OCR) is a key technology used in accounts payable automation. OCR software is used to extract data from paper-based invoices, eliminating the need for manual data entry.
OCR works by using image recognition to identify and extract text from scanned images. This text can then be used to populate data fields in an accounting system, reducing the need for manual data entry and improving accuracy.
OCR can also be used to extract data from electronic invoices, such as PDFs or email attachments. This helps to ensure that all invoices are processed in the same way, regardless of the format in which they are received.
While OCR is a powerful tool for automating accounts payable processes, it is not without its challenges. OCR software may struggle to accurately identify text on poorly scanned or low-quality images, which can lead to errors. Organizations must also ensure that their OCR software is compatible with their accounting system to ensure that data is extracted correctly and can be properly integrated with the organization's financial management system.
Despite these challenges, OCR is an important tool for accounts payable automation, as it can help organizations save time, reduce errors, and improve efficiency. By eliminating the need for manual data entry, OCR can also help reduce labor costs and free up staff time to focus on more strategic tasks.