“OCR enables us to convert an image—in the case of invoices, PDF data—into usable text. From that text we can do a lot of things,” says Dennis van der Graaf, Product Manager at Zone and Co.
Might sound simple. Might sound small. But the OCR market and the technology’s impact on things like AP automation are massive.
In 2022, the global OCR market value was over $10 billion. It’s expected to expand by 14.8% annually from 2023 to 2030. As for OCR’s impact on AP automation, the native NetSuite OCR app reduces manual AP processing tasks by 83%.
And that’s just the beginning.
In this article, we’ll dive into what OCR is, the problems it solves, how it makes AP automation in NetSuite a whole lot easier, and more.
What is OCR?
Optical Character Recognition (OCR) is a technology that converts computer images into machine-readable text.
In other words, OCR is like giving your computer a pair of human eyes.
“OCR enables computers to read documents in the same way as humans would,” says Justyna Bielak, Product Owner at Zone & Co. “In this process, the input is the image, and the OCR tool is able to convert it into machine-readable text. You can scan any kind of document, and your computer saves the scan as an image file. However, if you use an OCR tool, it is being converted into text documents. That content is actually stored as text data, so then you can actually start using data that is scanned, and that’s when the magic starts happening.”
What is OCR in accounts payable?
In the OCR scan and capture process, a PDF invoice is scanned and converted into an image, and all of the text in that image (customer names, invoice numbers, fees, etc.) is automatically captured in your accounting system. This data is indexed and searchable, making it much easier for finance teams to find the information they need to carry out the accounts payable process.
What problems are solved by OCR invoice scanning?
A slow, inaccurate accounts payable process is full of problems. But they’re all solvable by OCR invoice scanning.
Manual processes work until they don’t. And for growing companies that rely on manually capturing, matching, and managing vendor bill data in spreadsheets or ERP systems, they’re not going to work for long. If you’re not already running into regular problems with errors or missed deadlines (or both), then it’s only a matter of time. With NetSuite OCR invoice scanning, you can reduce manual AP processing tasks by up to 83%.
Asking a human to repeatedly perform a monotonous task—like capturing invoice and vendor bill data manually—is asking for trouble. Plus, not all invoices are the same, so oftentimes you’re relying on humans to not only manually enter data, but to manually discover it, too. It’s a dangerous combination of tasks that can leave you vulnerable to errors that are sure to slow you down. OCR invoice scanning prevents such errors by automating data capture and entry, so you never have to second guess the integrity of your data.
An AP process lacking OCR typically leads to breakdowns and delays like missed payments, paying the wrong amount, or a bill getting stuck in approvals purgatory. There’s just too much room for error with manual work and siloed systems. OCR invoice scanning in NetSuite not only automates data capture and entry, but it brings it all into the same system, giving you full visibility in an actionable setting.
“OCR can improve your end-to-end flow and make sure that your data entry is well-organized,” says Justyna. “Your data is coming from multiple sources, so if you organize it in a way that all documents are synchronizing with your OCR tool, then you make sure that end-to-end flow is covered completely and you do not lose any information in your company.”
Between closing the month and paying vendors, time never seems to be on finance’s side. It’s always tick, tick, ticking away. Every second matters, yet you wouldn’t know it if you looked at many finance processes today. Too much time is spent on manual data entry, costing organizations—not only in labor and time costs, but in opportunity costs, too.
Remember how we said that OCR invoice scanning in NetSuite can reduce manual AP processing tasks by up to 83%? That’s time back in your finance team’s day to spend on optimizing other processes, forecasting, or helping revenue-generating leaders make money for the business. “Efficiency is increased because when you automate data entry, you make your process faster, more accurate,” says Justyna. “Less manual data entry means that your employees can focus on analyzing the data.”
We love a dirty chai latte, but dirty data? That’s a different story. Dirty data can sneak up on businesses that rely on manual AP processes—often culminating in a mountain of technical debt that slows you down further.
OCR invoice scanning reduces those errors and not only ensures you have the right data, but helps your finance team get access to it the moment they need it, which proves invaluable in making decisions. “If you only have your documents, it’s really hard to get that information at a glance and make sense of it,” says Maxime Vermier, Senior Director for Technology Marketing at ABBYY. “If you have the data from it, it’s an entirely different story. You can give much better insights, you have much better decision-making possibilities simply because you have access to the right information.”
Wondering how accurate OCR technology is? Average OCR accuracy has a character error rate (CER) of 2–10%, representing a 90–98% accuracy rate. Add in the fact there’s a human at the end of the OCR invoice scanning process—ready to catch those errors—and all of the sudden your dirty data problem has been washed clean.
What are the benefits of OCR invoice scanning?
In addition to the problems it solves, here are some other benefits of using an OCR tool in your AP process:
- Less manual work
- Faster AP automation process
- More accurate data (and better data analysis)
- Cost savings
- Easy document digitization and storage
- Indexable and searchable data
How does OCR invoice scanning work?
There are six key steps in the OCR invoice scanning process.
Step 1: Document scanning
The invoice is scanned.
Step 2: Document specification
In the case of an invoice, we specify that the document we’re working with is, well, an invoice.
Step 3: Document recognition
Now that we know what kind of document we’re working with, we identify the type of text in the document and determine how we should extract it.
“In this step, we’re trying to validate different things at the same moment,” says Dennis. “Is it normal text? Is it printed text? Is it handwritten text? Based on those decisions, we can see how we should potentially read out that data. During that same recognition, we are also going to check comparisons against databases, built-in rules, or compliance rules that are inside of the application. Those are all rules that, for each application, can be different.”
Step 4: Data extraction
This is when we go from recognition results to the actual extract. This is the data that, at the end, we are going to use.
Step 5: Human verification
It’s always nice to have a human’s eyes on a machine’s work. In this step, a person on your team verifies whether the readout data is exactly as expected or not. If it is, great. If it’s not, they can change it and then train the system so it’s more accurate next time.
“It’s important that you have that human factor for two reasons,” says Maxime. “One is so you can continue to train and evolve [the software]. But on the other hand, it’s also for the people who are working with it to see how it’s helping them and actually making their life easier.”
Step 6: Data export
This is when we put the data somewhere as a specific type of file.
“The most important part is that we’re going to export the data because we do need the data somewhere,” says Dennis. In the case of OCR invoice scanning in NetSuite, “an export for our application would go into the final NetSuite environment. That data can be exported in many ways. It can be XML files, JSON files, or any other type of file that you would like to use inside your data application. And then, in many cases, you would like to train the system, but you would like to automate the training. So that means in your application where you are finally working with results and you might see slight deviations or things that weren’t recognized correctly. You can then send back data to your OCR station or software and tell the software what wasn’t extracted or recognized correctly. When you do that, it can train itself to do a better job next time.”
Does NetSuite have OCR?
ZoneCapture is the native AP automation solution for NetSuite. With it, your team can view, edit, and approve everything related to bills and credits without ever leaving their NetSuite screen. Using a combination of OCR technology and AI, ZoneCapture simply processes your bills as PDFs and, alternatively, if you’re using e-invoices, XML files are forwarded automatically through a secure network.
How does OCR improve NetSuite AP automation?
ZoneCapture helps you automate the creation of vendor bills and credits without leaving your NetSuite screen. You can reduce manual processing for accounts payable by 83%, eliminate risk, and enhance your existing NetSuite customizations, workflows, dashboards, and reports without worrying about integrations or external software.
Benefits and features of the native NetSuite OCR tool for accounts payable:
- Save costs and improve accuracy by eliminating manual data entry
- Native deployment ensures NetSuite remains your single data source
- Bills and credits created, stored, and visible within corresponding NetSuite records
- OCR, auto-learning, and e-invoice capture
- PO matching, line level recognition, and supplier auto processing
- Capture additional fields and extend existing workflows and customizations
- Split-screen view and transaction dashboard
- Affordable, easy to install, and easy to use (remote installation within 1 hour)
What is the OCR invoice scanning process like in NetSuite?
With ZoneCapture, it’s easy:
- You’ll be given an email address where you can send all your PDF invoices to.
- The PDF invoices are processed by OCR for scanning of the data.
- The scanned data is then mapped directly into a NetSuite Vendor Bill.
The coolest part? Because the app operates natively in NetSuite, it respects all of your existing custom fields, workflows, and approval processes. Or, along with your new functionality, we can help you introduce new processes. But most importantly, we keep it all in NetSuite—no new databases or interfaces to learn.
When is the right time to invest in an OCR tool for NetSuite?
Now. Well, yesterday. But now is the second-best time.
The amount of time you can save, the additional insights you can gain, and the costs you can cut simply by having the right data in your hands—at the right time—makes the investment in an OCR tool like ZoneCapture worth it.
Not only can it transform your AP automation process, but, as Maxime says, it’s one less thing to worry about:
“Today, everything is unstructured—it’s one less thing to worry about if you are able to quickly get the right insights from your data inside of documents,” says Maxime. “Then you can start to look at what your vendors are doing. How are they working? When are you receiving their invoices? Is there some cost-saving you can do? Is there some revenue I can start generating? These are all things that you can only do and only see if you have access to the data.”
Get access to the data you want, when you need it. See ZoneCapture in action.