Invoice data capture. It’s tedious, repetitive, and time-consuming.
- Research from Drewry Shipping Consultants estimates that the container liner shipping industry carries about 60% of the goods that are moved internationally by sea, generating $166 billion in transport revenues globally and requiring about 1.26 billion freight invoices to be issued, verified, paid, and reconciled.
- The problem, as Billentis highlighted in a report, is that almost 90% of all logistics invoices worldwide are still processed manually.
Additionally, the logistics industry has always been known for its razor-thin margins. As such, being able to deliver cost-efficient services is vital to stay in the market and outpace the competition. Thanks to the rapid digitization of the modern world, there are now plenty of new opportunities for the logistics industry to increase efficiency and effectiveness. One such promising technology is Invoice Data Capture (IDC)
What is Invoice Data Capture?
Invoice data capture is the process of managing a supplier invoice from the invoice receipt until the required data has been interpreted, extracted, and validated by a system or an operator. With accounting automation tools, invoice matching now takes a fraction of the time because of the elimination of time-consuming manual processes.
The Invoice Data Capture Process in the Logistics Industry.
Invoice data capture is the entry of invoice details into an accounting system. It is often the first step in invoice processing for accounts payable (AP) departments for logistics organizations. The process of invoice data capturing can be as simple as a paper ledger with records of outgoing payments, the vendors that received those payments, and payment dates. While this may be good enough for a small mom-and-pop outfit, think about the utter chaos such a system would create in a major global logistics corporation.
Invoice Data Capture Methods
Typically, there are four different methods for invoice data capture, and these are:
1. Manual Keying
We’ve already mentioned manual keying as the original method for invoice data capture. This is the most basic and time-consuming method and, as we said, can leave more room for human error. Though this may feel like the cheaper option and is usually where most businesses start, it can actually work out more expensive in the long run.
2. Optical Character Recognition (OCR)
Optical character recognition is one of the most commonly used technologies for invoice data capture. This is because these tools are able to extract characters, numbers, letters and symbols from different invoice formats. This includes unstructured documents such as Word documents, PDFs, JPEGs, email etc. This is why OCR has become an essential part of invoice data capture software. That being said, it does require that the raw data extracted is arranged by a person, so there is manual work involved. However, this still works far better and faster than manual keying.
3. Intelligent Invoice Capture
Machine learning (ML) and artificial intelligence (AI) have revolutionized invoice data capture. A combination of these two technologies with OCR creates a tool that is able to give the most accurate and speedy results. These intelligent data capture solutions do more than just data scanning and extraction. They are also able to sort the invoices and export data into Excel spreadsheets for further processing.
4. Outsourcing Invoice Process
Last on the list is outsourcing, which many people choose to do. This is the method of sending all your invoices to a third party to be sorted. However, a lot of the time, the supplier will use manual invoice data capture, so though you don’t have to deal with the stress of processing the invoices yourself, it can still be a more time-consuming process.
Why does the Logistics Business need an Automated Invoice Capture Capability?
Manual data and invoice processing often require time and effort on the part of many employees like the logistics coordinator, logistics manager, etc. This can result in mistakes, delays, and data loss.
Few benefits that logistics companies can have by relying on automated invoice data capture are-
As we said, manually extracting and entering logistics data takes a lot more time and effort. However, invoice data capture software can allow employees to upload invoices in bulk. What’s more, many of these tools can also handle unstructured data and use machine learning to continue understanding new formats. All of this can massively speed up the process of data capture and make the task easier for logistics organizations. This can also help in disbursing the payments faster.
Reducing Manual Labor
This software can help reduce the need for manual labor and enable employees to spend their time on more high-value tasks. Post adopting an invoice data capture solution, they may only need to get involved in case of flagged data. Apart from this, it can also eliminate the need of hiring extra accounting staff.
Vis a vis traditional accounting methods, automated invoice data capture solutions have loads of benefits for the logistics industry. – they help the logistics industry save time, reduce errors, improve cash flow, and help manage business finances better. They are powerful solutions that can help organizations get more efficient in the years to come.
Role of IDP in Automated Invoice Data Capture
Intelligent document processing (IDP) is a technology that can replicate (or come close to imitating) the way humans understand information — and further add to the benefits of invoice automation, drastically improving labor efficiency. This frees AP professionals to focus on more important tasks, such as responding to vendor inquiries or further improving processes.
The top 2 benefits are:
Optical Character Recognition
OCR can transform any words and images from printed documents, PDFs, and other digital formats into machine-encoded text or data. Some more advanced systems can even read and convert handwriting. This virtually eliminates manual document processing because systems that use rules-based logic can automatically sort or label the captured data.
When AP departments manually process invoices, more invoices automatically translates to greater need for labor. With IDP implemented, these systems can process a few hundred invoices almost as fast as they can a few dozen, with virtually no increased demand on workers. This allows companies to maintain productivity even during busy times for AP departments, without any disruptions or need for extra help.
IDP Leaves Room for Improvement
For all the ways IDP improves productivity, it can be a struggle for AP departments to completely end manual processing. Much of this is due to legacy IDP systems’ dependency on templates to correctly label or contextualize the data it extracts from an invoice. If every invoice is formatted exactly the same, it will be easy for the program to understand who the payee is and how much they’re requesting. However, when formats vary, the IDP can misunderstand information and completely cancel out its benefits.
Editing current templates or creating more can require a lot of skilled labor and be quite expensive to set up. On the other hand, changing organizational processes to ensure every incoming invoice is formatted exactly the same can eat up even more resources. Plus, there will always be exceptions that require hands-on processing.
The Next Generation of IDP
A new generation of IDP solutions are equipped with unprecedented machine learning capabilities to recognize and act on more data faster and with greater accuracy. VisionERA is powered by a deep learning AI and serves as a complete end-to-end solution. With a form-agnostic approach, the system can recognize any type of document and automatically contextualize data without the need to manually build a template, making it ideally suited for complex invoice management.
Learn more about how VisionERA can streamline your invoice workflow by contacting us today.
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