If you are into invoice processing automation, you need to know about OCR.

Optical Character Recognition, or OCR, is the technology behind modern invoice processing, and it has the power to transform how businesses handle invoices: through automatic data extraction and processing.

Combining OCR and automation, we have the perfect recipe for not only fast, automated, and accurate invoice processing but also accounts payable.

Let’s take a closer look at how this smart data extraction technology reshapes accounts payable.

Contents

What is Optical Character Recognition (OCR) in invoice processing?

Benefits of OCR

How does OCR technology extract data?

Faster and smarter invoicing with Yooz

The Future of Invoice Processing: Smarter Data Extraction with OCR

What is Optical Character Recognition (OCR) in invoice processing?

OCR technology has grown from a simple character recognition tool into an intelligent data extraction powerhouse. The technology recognises and converts images into a text-based format.

For instance, scanning or taking a photo of a receipt will allow you to save it as an image file on your phone or computer. With OCR, any text on the invoice image can be extracted, modified, searched, or copied. This saves you tons of valuable time rekeying data into your accounting system.

Traditional OCR could not process different invoice formats and complex table structures 1. Most businesses’ data exists in unstructured formats, which made traditional OCR solutions fall short of modern needs.

Modern OCR capabilities resolve the inefficiencies by offering:

98-99% page-level accuracy [source]

AI-enabled solutions handle a variety of invoice layouts without templates

Smart error detection and correction

Contextual understanding of relationships between data fields

Advanced pattern recognition is one of the most important enhancements that have enabled modern OCR to achieve near-perfect accuracy. The feature analyses each character’s unique traits and breaks down letters, and numbers into identifiable patterns.

The wide adoption of AI has further advanced the systems and financial management processes. AI and machine learning enable OCR to understand the document context and learn from past data, thus boosting an unprecedented level of invoice processing accuracy.

Not just that, these advanced features also enable OCR to:

Identify patterns and highlight unusual invoicing trends

Automatically classify expenses, match data, detect errors

Make smarter decisions based on relevant, timely data

This puts modern OCR at the top of the game, not just merely scanning invoices.

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On-demand Webinar | Procure-to-Pay in 2025: From Cost-Cutting to Value Creation

Benefits of OCR

Imagine easily copying endless rows of text or searching for a specific keyword from an image, just like you typically do on a Word document. Or imagine archiving such data or feeding it to an analytic solution to analyse it.

OCR technology lets you do that.

When combined with automated workflows, the technology empowers you to enhance operational efficiency. The integration streamlines processes and truly digitalises your invoice handling.

Modern OCR is able to scan even handwritten forms with impressive precision and transform them into editable, searchable documents, making it easier to store, share, and modify information as needed.

Here are a few examples of OCR use cases in various industries:

Banking: Processes loan documents, checks, and financial transactions, enhancing fraud prevention and security.

Healthcare: Processes patient records and insurance payments, streamlines workflows, and reduces manual work while keeping information up-to-date.

Logistics: Efficiently tracks package labels and invoices.

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How does OCR technology extract data?

Smart data extraction systems rely on three basic components that are the foundations of modern invoice processing. These elements work naturally together and ensure accurate data capture from all types of documents.

Pre-processing

Document preparation must happen before character recognition begins. The pre-processing stage has several vital steps:

Image enhancement: Adjusting brightness and contrast

Noise removal: Eliminating specks and smudges

Skew correction: Straightening tilted documents

Binarisation: Converting to black and white format

Resolution optimisation: Maintaining 300 DPI for optimal results

Character recognition algorithms

The technology looks at each pixel to identify characters and matches them against large font databases to improve accuracy. These algorithms allow for a high-level data extraction accuracy, which can:

Identify and extract multiple distinct invoice fields

Process various document types, from sales invoices to utility bills and beyond

Convert extracted data into a structured format for further processing

Data validation

The validation process uses multiple verification layers to ensure data integrity by running several key checks:

Verify data against pre-defined criteria

Cross-reference data with existing records and database

Validate structure and format

Identify and prevent duplicate entries

Automated validation rules detect discrepancies like mismatched totals or invalid dates before they affect financial systems. This method has reduced manual intervention while keeping high precision standards.

Smart invoice processing solutions integrated with OCR and AI allow businesses to handle complex cases and unusual formats. This cuts down manual data entry and validation work, especially when dealing with high volumes of invoices.

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Faster and smarter invoicing with Yooz

Yooz is changing how businesses deal with their financial documents. This cloud-based e-invoicing and purchase-to-pay automation solution brings a new approach to not just invoice processing.

Yooz’s strength comes from its unique combination of AI, deep learning, big data, and RPA technologies to turn raw data into practical insights. It captures documents from different channels into one single platform, from POs and credit notes to goods receipts received from email attachments, mobile, etc.

From data capture to approval and making payments, the flow happens entirely digitally without any human intervention, thus ensuring all fees are made on time with the correct amount and staff has valuable time to focus on more strategic activities.

You can also connect Yooz with your current finance system or ERP solution to further streamline processes. Moreover, the solution gets frequent updates to comply with the latest legislation and security standards, ensuring your business is well protected against potential attacks.

Finally, Yooz provides all the advantages typically associated with a cloud-based solution:

Flexibility

Scalability

And accessibility

Catch a glimpse of Yooz’s interface, capabilities, and more with this on-demand webinar.

Now you and your team can seamlessly capture and approve invoices any time, anywhere, via any device.

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OCR technology has changed invoice processing from tedious manual work into a quick, automated system. Modern OCR systems now achieve almost perfect accuracy on complex documents with minimal human input, thanks to AI and machine learning.

Smart data extraction brings more benefits than just saving time. AI-powered analysis, automated error correction, and continuous connection with existing systems have eliminated most manual work. Your business can also enjoy higher efficiency, accuracy, and lower processing costs.

Take the next step and start transforming today!

The Future of Invoice Processing: Smarter Data Extraction with OCR

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