10 December 2019

How does OCR work in Accounts Payable Automation

Survey manual Accounts Payable Processes

Over the years, accounts payable has evolved from being a cost center to a profit center, and the Optical Character Recognition (OCR) had a crucial role to play in it. OCR is a technology that converts different digital documents such as PDF, images, etc. into editable and searchable text.

A study by iPayables showed that the main frustrations the accounts payable (AP) professionals faced were caused by lengthy approvals and payment processes, which is linked to manual, paper-based processes. Getting the right AP automation software is one solution that has helped our customers at To-Increase tackle or even get rid of all these issues.

Survey manual Accounts Payable Processes

Image 1: Common issues caused by manual Accounts Payable Processes

Like most of the high-quality accounts payable systems, To-Increase MediusFlow, our AP automation software for Dynamics 365, includes the OCR feature. It enables you to decode and pull out data automatically from the digital invoices, thus helping you reduce the manual workload and increase process efficiency. As a result, you get a streamlined AP process. However, there’s  more to AP automation benefits than just OCR.

In today’s blog, we will learn about OCR and how useful it is in your accounts payable automation.

How does OCR work?

Let us first understand how OCR works.

OCR is all about decoding and converting a scanned image or document into text format so that it can become editable.

Let us say your partner emails you a paper document, which could be a PDF, brochure, magazine piece, scanned documents, or digitally captured images. A scanning solution can help you get a raster image, which is nothing but a collection of dots, and it makes these documents only viewable—but, with an OCR software, you can also edit them.

An OCR software reads and extracts the letters or numbers individually in a document to form proper words and sentences. Therefore,  OCR enables you to read, search, and edit such documents in the original format.

Benefits of OCR for Accounts Payable

It is about time we get rid of the tiring, inefficient, monotonous manual way of managing your AP process. Automation is a necessity if you are looking to grow and stay ahead. And, the OCR feature in your AP process does help in achieving that. Here are a few benefits you can get:

Time efficiency

OCR enables automation of certain repetitive tasks such as data entry with the help of Robotic Process Automation (RPA) technology in your invoice processing. Usually, processing an invoice can take about 24 to 72 hours. However, OCR can handle a bulk of data entry tasks in minutes. Therefore, apart from saving you a lot of time, it enables your staff to focus on more business-critical work.


You can convert your documents digitally into any formats and make it editable, including Word, Excel, PDF, etc. Besides, it can combine with other technologies such as machine learning and AI to offer an array of options for font, handwriting, and data in the form of tables and images. This is, usually, time-consuming in a manual scenario.

Cost reduction

Companies can save a lot of costs associated with outsourcing data entry. Also, they wouldn’t require other resources such as storage, stationery, printing, labor, etc., involved in a paper-based process. Thus, their costs can be cut down drastically.

Fewer errors

Unlike an automated process, there is a greater degree of human intervention, which is unavoidable with manual invoice processing. Therefore, it leads to exceptions during invoice matching and then re-entering the data. This can prove to be a costly mistake for your company. And, OCR can help with increasing the accuracy as well as the speed of the process.

Is OCR is enough to achieve your AP automation goals?

OCR does not completely automate your accounts payable, leaving huge scope for manual intervention, and in turn, for errors too. Just retrieving data from digital invoices does not ensure touchless invoice processing. Besides, OCR is just a temporary or partial remedy for problems associated with a manual accounts payable process. You would need a more reliable system that enables the digital transfer of invoices or documents between suppliers and buyers, without the need of manual supervision, to improve consistency and accuracy of the data. It would be best if you go for an end-to-end automation solution that can eliminate paperwork.

While OCR does have a part in automating your AP process, investing your time and money solely into this technology would turn out to be worthless. According to the survey conducted by iPayables on AP automation, 82% of companies use an automated AP workflow with some electronic or OCR capability.

The best way forward would be to consider your business needs carefully and figure out if you need a built-in or a best-of-breed AP automation software. For example, To-Increase MediusFlow is an ideal solution which has been enabling companies to increase their AP automation levels up to a massive 97%.
With a solution such as this, you can streamline and enhance your entire procure-to-pay process with efficient tools and achieve truly touchless, end-to-end automation.

Want to learn more about the benefits of Accounts Payable Automation?

Daniel Villegas,
Daniel Villegas,
Domain Sales Specialist

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