11 mins read

Accounting and Technology

Invoice Scanning OCR Technology in AP Automation Software

by Yooz the 05.23.2024


OCR: Another one of those technical buzzwords that we’re hearing a lot about these days in accounting and technology. It’s of particular interest in FinTech (another new buzzword that stands for ‘financial technology’) and even more specifically in accounts payable. But what is it? More importantly what isn’t it? How does it even work? And how does it make a difference in the AP workflow? In this blog, we’ll answer all your questions about OCR and it’s role in automating invoice processing.


AI in the Workplace - 2024 Whitepaper

Discover why U.S. workers are anxious about AI use in finance and operations with our whitepaper: AI in the Workplace. Download now to learn how to best present and implement this revolutionary technology in your business!
Download now


What is Optical Character Recognition (OCR)?

The official definition of optical character recognition (OCR) is the mechanical or electronic conversion of images of typed, printed, or even handwritten text, into machine-encoded text. The text can come from a scanned document (like a vendor invoice), a photo of a document (like a receipt), a scene-photo (for example the text on signs and billboards in a landscape photo), or from subtitle text superimposed on an image (like from a television broadcast).


OCR looks like this.


Simply put, it’s a computer looking at an image or document, such as a supplier invoice, and being able to identify what is on it.[1]


Don’t confuse OCR invoice scanning with data extraction.

OCR is a technology that turns a picture into words. The next layer, smart data extraction, understands and processes the text from the OCR to transform or format it into relevant data. As many of you are exploring AP automation software providers, you may ask, “Do you have OCR technology?” Good question. But what you really want to know when investigating invoice and payment processing automation providers is if the software has a complete technology, combining OCR (converting images to text), smart data extraction (transforming the text into relevant data), and machine learning (remembering the data and populating it into the applicable data fields each time the data is recognized). Today, there are three predominant types of extraction technology :


  1. Human verified or outsourced extraction.
  2. Zonal-based extraction that utilizes predefined templates.
  3. Systems based upon artificial intelligence (AI) or machine learning.

Request a demo


OCR processing needs assistance.

These are all necessary as OCR by itself does not know what to do with the information it reads from your documents. OCR can scan the text on a pdf invoice or document but doesn’t know where to put that information. Some AP automation software providers might use OCR, but then apply human extraction, outsourcing to a third party—also called third-party verification. OCR extraction that layers human verification uses people to put data read by the OCR into predefined fields. In this scenario data entry is done by an outsourced firm and takes time as the data is being populated by people, typically 24 to 72 business hours. Kind of defeats the purpose of moving from a manual AP process to an automated process to save time, right?

In a template-based data extraction software, a user has to build or predefine specifically “where” on a document a specific piece of information can be found and “what” the tool should do with the data it finds. The retrieval process can be done fairly quickly, however, it can become an administrative burden as templates must be manually managed and updated as documents change.

In this scenario, humans have to constantly manage the templates; read them, interpret them, and update them. This might defeat the intent of transitioning to invoice and payment automation because you are not saving time, and it might even be more time-intensive. Even duplicating efforts in some respects.




Pair OCR with Artificial Intelligence and Machine Learning.

Data extraction using AI or machine learning is able to “understand” what information on a document or invoice needs to be used and, more importantly, what should be done with said information to make it relevant data. For example, software utilizing machine learning is able to populate the “Total Amount” of an invoice without being taught or shown where to grab the data and which field to associate it with. Because the tool has seen thousands of document examples it is able to draw on past experiences to make conclusions. Smart!


Pick the right AP automation solution with the best invoice scanning software.

But what does all this mean, exactly, to finance leaders and their AP teams? Mark Brousseau, consultant, Institute of Finance Management (IOFM) spokesperson, and speaker puts it in perspective in an interview with The Institute of Finance Management.

“Businesses today are expecting more from their AP function. They realize that if they can get at the information and data housed in their AP department, they can use it to support better management of their working capital, mitigate potential risk, and make more strategic decisions.”

This allows companies to transform data into knowledge that can better inform their business decisions and streamline their business processes. And it’s made possible with the combination of OCR and smart data extraction, the most important feature of advanced acounts payable automation solutions.

When it comes to the Yooz AP automation software, our smart data extraction technology leverages OCR to extract information from scanned invoices/photos of paper invoices or invoice images received via email. It then interprets the information, pulls out the relevant data, then applies it to the appropriate field in the application to then be reviewed and sent for approval. Finally, the data is exported to an ERP or financial package. If there are pieces of data that cannot be interpreted from a document, Yooz learns over time how to handle those missing pieces. This is referred to as machine learning and is powered by AI.

With constant enhancements, no end user is ever involved to teach the software. The staff transitions from manual data entry and third-party verification to simply reviewing data retrieved for accuracy. If there is a miss, the reviewer can click inside the Yooz application to correct it and flag the missed information quickly and easily. Utilizing machine learning optimizations, the system will become more intelligent over time, reducing the number of mistakes. It gets smarter the more you “Yooz” it!





What you need is a complete process of invoice scanning OCR, data extraction, and machine learning powered by AI.

Today’s organizations are focused on speed, efficiency, and leveraging technology to solve business problems. When it comes to automating your AP process, take the time to first set your business goals and determine what challenges need to be solved. Then find an AP automation solution that solves as many or all of those critical needs.

Sure, you can ask, “Do you have OCR?” But don’t stop there. Keep digging until you have a complete understanding of each solution you are considering and, more importantly, what best suits your business.


CTA-US   Private Demo


Transform Your Business with Invoice Scanning OCR Technology


Staying competitive in today's business world means adopting advanced tools like invoice scanning OCR technology. But what exactly is invoice scanning OCR technology, and how can it revolutionize your operations? This cutting-edge technology digitizes and automates the entire invoice processing workflow, reducing manual effort, minimizing errors, and speeding up payment cycles.


Imagine a solution that can start working for you in just one hour, with no training required. That’s the power of Yooz. Our All-in-One approach streamlines all stages of your P2P process, from purchase request to payment, enhancing efficiency and effectiveness. Yooz’s invoice scanning OCR technology combines real-time AI performance with extreme simplicity and maximum business richness, setting a new standard in the industry.


With Yooz, 80% of invoices are automated without any prior setup, offering unparalleled value and transforming your workflow instantly. Our unmatched business expertise and unique focus on automatic document processing ensure that you get a solid and enduring solution, born in the Cloud. Recognized by prestigious awards and trusted by the global financial ecosystem, Yooz not only meets but exceeds expectations in invoice scanning OCR technology.


By implementing Yooz, you’re not just adopting a tool; you’re investing in a smarter, more efficient future for your business. Whether you’re a small business or a large enterprise, Yooz scales with your needs, providing a reliable and robust solution that grows with you. Discover how Yooz can transform your invoice processing and help you stay ahead in a competitive market.



How does Yooz leverage OCR technology for invoice scanning, and what benefits does it offer?

Yooz utilizes advanced OCR (Optical Character Recognition) technology to extract data from invoices accurately and efficiently. This technology enables Yooz to convert scanned or digital invoice images into machine-readable text, automating the data entry process. The benefits include improved accuracy, reduced manual data entry errors, and faster processing times, ultimately streamlining the accounts payable workflow.

Can Yooz's OCR technology handle invoices of different formats and layouts, including handwritten and scanned documents?

Yes, Yooz's OCR technology is designed to handle invoices of various formats, layouts, and quality levels. Whether invoices are scanned, emailed, or uploaded digitally, our OCR engine can accurately extract relevant data fields such as vendor name, invoice number, and line item details. Additionally, Yooz's intelligent OCR capabilities can interpret handwritten text and adapt to different invoice layouts, ensuring accurate data extraction regardless of the invoice format.

How does Yooz ensure the accuracy of OCR data extraction, especially for invoices with complex structures or non-standard formats?

Yooz employs a combination of OCR technology, machine learning algorithms, and human validation processes to ensure the accuracy of data extraction. Our OCR engine undergoes continuous training and refinement to recognize patterns and structures in invoices, improving accuracy over time. Additionally, Yooz's validation tools enable users to review and correct OCR-extracted data, ensuring data accuracy and integrity before further processing.

Can Yooz's OCR technology integrate with other accounting or ERP systems to streamline invoice data processing and reconciliation?

Yes, Yooz's OCR technology seamlessly integrates with accounting and ERP systems, enabling organizations to automate invoice data processing and reconciliation. Once data is extracted using OCR, it can be mapped directly to relevant fields in the organization's accounting or ERP system, eliminating the need for manual data entry. This integration ensures data consistency across systems, reduces processing time, and enhances overall efficiency in accounts payable operations.


    How Advanced Technologies Power AP Automation

    How Advanced Technologies Power AP Automation

    dashboard for infographic4

    Read now

    How Advanced Technologies Power AP Automation