Accurate expense reporting hinges on data clarity at the source – namely, invoices and receipts. However, the traditional way of capturing invoice and receipt data opens the door to both data error and fraud.
According to a recent report, 78% of finance professionals believe that manual data entry and processes result in compliance breaches, lost documentation, productivity loss, and general mistakes. However, intentional expense fraud is fairly common. Of those two commit fraud, two in three employees reply on manual processes.
As a result, many companies are shifting their expense management process to include automated receipt extraction and invoice processing.
The Basics of Receipt Data Extraction
Usually, an employee may pass on the hard copy of a receipt to an administrator or AP professional to catalog and file away later. Given that receipts are usually small and the ink easily smeared, especially if it’s been wadded in a wallet for days or has water damage, it’s possible for the information to be tampered with or destroyed before it even reaches the office.
Even if we assume the receipt is in pristine condition, the finance team has to manually enter the data into their ERP. In some cases, they may also tediously scan each receipt and attach it to the relevant transaction.
This process is generally the same for paper invoices, which can also take damage while in transit.
However, with modern optical character recognition (OCR) and natural language processing (NPL) technology, a program can extract data directly from the invoice and map it onto the right transaction into your ERP.
However, the information doesn’t just have to be manually scanned – employees can now take photos of the receipt and upload it to the program. The most basic digital solutions offer information extraction. But it’s possible to take it a step further.
Better Data With Intelligent Automation
The key to a truly optimized information extraction system is through pairing artificial intelligence (AI), computer vision, and machine learning (ML) with the initial extraction technology. These deep learning programs allow your information extraction software to not only capture the information, but analyze it, verify it, and learn from it.
This combination of smart technology is commonly referred to as intelligent automation, as it requires little human interference. Over time, the accuracy levels can easily hit between 95% to 99%, and what used to take hours to process is reduced to a few minutes.
At the same time, because the information is extracted directly from the receipts or invoice and verified, you can be sure of its credibility and only handle items flagged as exceptions.
The Benefits of Digitized Receipt Extraction
There are a number of advantages to using invoice and receipt data extraction alongside your accounting software:
- Eliminates errors from manual data entry – First, since the process is completely automated from scanning to storage, the opportunity for human error is essentially removed from the equation. And since fewer errors are being made, your team spends less time and money on corrections.
- Saves time for high-value tasks – What used to take hours now takes minutes, if not seconds. Invoice extraction, alongside receipt information, scales rapidly with intelligent automation and requires very little handholding. As a result, the finance team can focus on meaningful work that drives the company forward.
- Easier to access – When using a digital extraction solution like Itemize, all the data is stored in the cloud and can be accessed from anywhere. This is ideal for remote teams and any employee on the go.
- Improves compliance – Artificial intelligence can pick up on expense policy violations and other suspicious expenses. As a result, your team is able to maintain and enforce compliance efficiently.
- Reduces costs – Finally, the icing on the cake is that receipt extraction through invoice capture reduces costs and easily pays for itself.
Streamline Your Workflow With Itemize
The fact is that fewer manual processes result in a simpler, error-free workflow. End-to-End AP automation, starting with invoice and receipt data extraction, can help finance leaders transform their AP operation into a strategic asset.
At Itemize, we help companies across industries to streamline their AP workflow. Learn how we can help you grow and book a demo with us today.