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Finance&Accounting

OCR in Finance & Accounting

November 2, 2022

Leading businesses actively organize their operations into specific processes to achieve definitive activities and tasks. Smooth Interpolation among processes and functions has become critical to ensure that the company delivers outstanding results to its customers and shareholders. A predefined set of laws executes some business processes, and some are driven on an ad-hoc basis based on the requirement. 

Similarly, a critical business process is accounting and finance, where multiple documents, such as invoices, purchase orders, receipts, quotes, etc., are processed daily. The scope of the accounting and finance department is enormous – it is the heart of entire operations, giving the visibility of cash reserves and financial health, managing, and monitoring payments, and maintaining the company’s book of accounts. Accounts Payable teams operate within the finance departments and do the majority of the heavy lifting – process invoices, validate invoice data with purchase orders (PO), manually key in the data to applications for bookkeeping purposes, and schedule payments to vendors. 

Organizations build dedicated AP teams to process financial statements, inclusive of invoice processing. Using AI-powered OCR for processing financial statements has a huge impact. Given, the flow of inbound invoices is not always constant; seasonality and new business initiatives influence the number of invoices that require processing. In addition, companies add new resources to AP teams or outsource the entire invoice processing operations, which often leads to an additional cost increase. Knowing about the what and how of the roles of AI-powered OCR in finance has the potential to transform the entire accounting and finance business process. 

Learn more about how the AI-powered OCR software enables document processing. 

What Accounting & Finance teams need to know about OCR technology? 

Optical character recognition (OCR) technology for finance and accounting departments is an enterprise-grade software that is designed to extract data from documents in different formats (for example, DOC,.XLS,.RTF,.PDF,.TXT, HTML, etc.) based on defined criteria and requirements. The extracted data is often parsed and made accessible to document processing teams. It simplifies the complex financial document processing routine and negates some manual activities.  

Usually, OCR tools are used to build templates, i.e., the OCR software is formatted to recognize one specific document type. In other words, it can extract data from similar document types. For example, an OCR system fails to extract data from a multitude of different invoices. It cannot also comprehend and contextualize the extracted data. The main goal of any OCR software is to negate the manual efforts involved in processing documents. However, an OCR engine without document processing intelligence leads to catastrophic results. It fails to achieve the objective of reducing manual work – as data extraction will be inaccurate. This will force the teams to spend additional time reviewing the data extracted by the OCR solution – thus leading to an increase in process cycle time and costs and hampering productivity.  

Learn more about "Under the Radar" costs that Accounts Payable teams unwillingly bear while processing invoices manually. 

AI-powered OCR technology for Accounting & Finance teams? 

OCR in its native form is rendered ineffective while processing complex documents with a lot of variations like financial documents. This necessitates building templates to look for information at certain pre-determined coordinates in the document. This is not a practical or scalable solution. The whole document processing context changes with the combination of Artificial Intelligence (AI).  

In simpler terms, instead of building multiple OCR templates for document processing across finance and accounting workflows, imagine all the work is done through just a single AI-powered OCR engine. AI achieves this monumental feat. What AI does is quite interesting! Typically, AI products have an AI model involved; the AI model is like the brain behind document processing, which, when trained with different types and formats of financial documents, starts to recognize every one of them seamlessly. This ensures high data extraction accuracy while processing financial documents, ensuring less time spent on manual reading of documents.  

In addition, AI-powered document processing products provide extraction accuracy scores, ensuring confidence among document processing teams about data extraction. Combining AI and OCR is a revolutionary approach for enterprises to process bulk financial documents. 

Learn how the Kanverse suite of document processing products combines multiple AI technologies (Computer vision, ML, NLP, fuzzy logic) with OCR to extract data from structured, semi-structured, and unstructured documents. It is now a preferred technology for enterprises undertaking digital transformation projects. Through Kanverse, companies can inculcate data-powered decision-making seamlessly into downstream functions. In addition, process owners and users can achieve a touchless document processing experience agnostic of inbound document types with Kanverse. 

Learn more about the benefits of AI in Accounts Payable operations. 

Benefits of AI-powered OCR technology for Accounting & Finance teams?  

Enterprises that have deployed AI and OCR capabilities to manual document processing workflows have saved costs and increased staff productivity. AI also ensures robust data capture capabilities from a wide gamut of document types and formats seamless. Some of the meaningful benefits of adopting AI-powered OCR technology across finance and accounting workflows are –  

  • Reduce cost – Significantly reduce operational costs by up to 90% with Kanverse. The significant advantage of digitizing manual document processing workflow is shifting from a fixed costs model to pay based on consumption model. Digital systems can seamlessly scale based on requirements while eliminating document storage costs. 

  • Improved cycle time – Kanverse reduces process cycle time by up to 98% from days to seconds. Manually processing documents often takes days and uncountable person-hours. The agile process builds proactivity across teams and helps to get the job done on time. 

  • Improved data accuracy – A significant bottleneck for manual data processing is processing errors when humans perform. Processing and reviewing every piece of information with utmost precision and accuracy for any human is impossible. But this task becomes simplified when performed by an AI-powered system. 

  • Sustainability - Consuming any form of physical paper is not sustainable. The papermaking process, i.e., from forest to office, leaves a high carbon footprint on the environment. It contributes to deforestation, air and water pollution, and squanders other natural resources - oil, energy, and water. According to researchers at Xerox - “About half of the documents printed in a typical office are thrown away within 24 hours”. A proactive approach to prevent the printing of documents is sustainable and saves costs. 

  • Employee delight – Employees feel overwhelmed performing the same manual activities daily. It can lead to stress and low job satisfaction. Using technology to complement humans in the workplace has multiple benefits. Employees can focus on creative and business-critical tasks, while AI-powered OCR software can perform manual data extraction seamlessly.  

Download the case study to learn more about the results achieved by Fellowes Brands with Kanverse. 

” Invoice processing has always been an exacting task for our Finance team, not to mention the sheer volume of invoices, the resources and time involved. Today with Kanverse IDP (Intelligent Document Processing), and the unprecedented levels of automation it offers, we are not only digitizing this otherwise strenuous manual process but are able to achieve high levels of productivity. Kanverse has truly delivered on its promise of zero touch AP Invoice Automation.” - eDirector, Business Technology Solutions, Fellowes Brands 

 

About Kanverse.ai 

Kanverse Accounts Payable Invoice Automation digitizes document processing for enterprises from ingestion, classification, extraction, validation to filing. Extract data from a wide gamut of documents with up to 99.5% accuracy using its multi-stage AI engine. Say goodbye to manual entry, reduce cycle time to seconds, optimize cost by up to 80%, minimize human error, and turbocharge productivity of your team. 

AP automation software like Kanverse APIA (AP Invoice Automation) is built to do the heavy lifting across your AP cost centers while your staff can focus on productive and business-critical activities.  

Kanverse can also automate insurance submission workflows and seamlessly process ACORD and supplemental forms

Schedule a demo with us today to find out more. 

About the Author 

Aritro Chatterjee, Product Marketing, Kanverse.ai 

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