October 6, 2023

How does intelligent document processing work & why do you need it?

This article dives into the workings of Intelligent Document Processing and explores the reasons why businesses should consider implementing it.

Businesses are generating and managing an overwhelming amount of data and documents on a daily basis these days. From invoices and contracts to customer forms and reports, the sheer volume of information can be daunting to process efficiently.  

This is where Intelligent Document Processing (IDP) comes into play. IDP is a cutting-edge technology that combines artificial intelligence (AI) and automation to streamline the document-centric processes, enabling organizations to enhance accuracy, save time, and optimize their operations.  

What is Intelligent Document Processing?

Intelligent Document Processing (IDP) is an advanced technology that leverages AI, machine learning, and automation to extract, understand, and process data from various types of documents. These documents can include structured forms like invoices, purchase orders, and surveys, as well as unstructured documents like contracts, emails, and reports. IDP goes beyond traditional Optical Character Recognition (OCR) by incorporating contextual understanding, which enables it to interpret the content and context of the documents.

Read more: 20 Key Terms That You Should Know Related to Intelligent Document Processing


How Does IDP Work?

Document Ingestion: The process begins with the ingestion of documents. These documents can be uploaded from various sources such as emails, scanners, cloud storage, or even physical paper documents.

Optical Character Recognition (OCR): The documents are then subjected to OCR, which converts the scanned or image-based text into machine-readable text. This step allows the system to recognize characters and words within the documents.

Data Extraction: Once the text is extracted, the IDP system employs machine learning algorithms to identify and extract relevant data. These algorithms can be trained to recognize specific fields such as names, dates, addresses, amounts, and more, depending on the type of document.

Contextual Understanding: What sets IDP apart is its ability to understand the context of the document. It can interpret the relationships between different data points and their significance within the document, leading to more accurate and meaningful data extraction.  

Validation and Verification: The extracted data is then validated and verified against predefined rules or existing databases. This step helps ensure the accuracy of the extracted information before further processing.

Automated Processing: After data extraction and validation, the IDP system can trigger automated actions based on the processed data. For instance, it can route invoices for approval, update databases, or initiate follow-up processes.

Continuous Learning: Modern IDP systems are designed to learn from their interactions. As users correct or validate data, the system learns to improve its accuracy over time, making it more efficient with repeated use.


Why Do You Need Intelligent Document Processing?


Enhanced Accuracy and Reduced Errors

Manual data entry is prone to errors, leading to costly mistakes and discrepancies. IDP significantly reduces the likelihood of errors by automating the extraction process and validating data against predefined rules. This accuracy is especially crucial for industries like finance and healthcare, where precision is paramount.


Time and Cost Savings

Manual document processing is not only error-prone but also time-consuming. IDP automates the entire document processing pipeline, from data extraction to validation and subsequent actions. This frees up valuable human resources to focus on more strategic tasks, leading to increased productivity and cost savings in the long run.

Learn more: The Fundamentals of Intelligent Document Processing


Improved Compliance and Risk Management

Many industries are subject to strict regulatory requirements regarding data handling and privacy. IDP can help ensure compliance by accurately processing sensitive information and maintaining an audit trail of all document-related activities. This reduces the risk of non-compliance penalties and legal issues.


Scalability and Consistency

As businesses grow, the volume of documents they handle also increases. Manual processing becomes increasingly impractical in such scenarios. IDP scales effortlessly to handle large volumes of documents without compromising on accuracy or speed. This ensures consistent and reliable processing even during periods of high demand.


Unleashing Strategic Insights

The data locked within documents holds valuable insights that can drive informed decision-making. IDP not only extracts data but also organizes and presents it in a structured manner. This enables businesses to perform deeper analysis and gain insights that were previously inaccessible.


Enhancing Customer Experience

Swift and error-free document processing directly translates to improved customer experiences. For instance, in sectors like insurance or loan processing, customers expect quick turnarounds. IDP accelerates these processes, leading to higher customer satisfaction and loyalty.


Adapting to Modern Workflows

Traditional document processing methods often clash with modern, digitally driven workflows. IDP seamlessly integrates into digital environments, allowing for automated document handling in cloud-based applications and collaborative platforms.


Future-Proofing Operations

The technology landscape is evolving rapidly, and businesses need to embrace innovations to stay competitive. IDP represents a step toward future-proofing operations by harnessing AI and automation to improve efficiency and accuracy.

Explore more: Top 10 Reasons to Choose Intelligent Document Processing



In an era where data is abundant and business operations are becoming increasingly complex, Intelligent Document Processing emerges as a transformative solution. By leveraging the power of AI, machine learning, and automation, IDP offers unparalleled accuracy, efficiency, and scalability in document processing. The benefits it brings, from enhanced accuracy and time savings to improved compliance and strategic insights, make it a must-have for businesses across industries. As organizations continue to navigate the challenges of the digital age, embracing Intelligent Document Processing is not just a choice but a strategic imperative.


FAQs on How does IDP work


1. How does Intelligent Document Processing (IDP) differ from traditional OCR?

While traditional OCR focuses on converting scanned text into machine-readable text, IDP goes beyond by incorporating AI and contextual understanding. IDP not only extracts data but comprehends the document's context, enabling it to accurately interpret relationships between data points and their significance.


2. How does IDP ensure data accuracy?

IDP employs machine learning algorithms to extract and validate data from documents. These algorithms can be trained to recognize specific fields and patterns, reducing errors. Additionally, the system learns from user interactions, continually improving accuracy over time.


3. Can IDP handle various document types?

Yes, IDP is versatile and can handle a wide range of document types, including structured forms like invoices and unstructured documents like contracts and emails. Its ability to understand context allows it to adapt to diverse document formats and extract relevant information accurately. is an AI research company that builds Intelligent Document Processing software to solve real world problems using advanced technology such as Computer Vision, Machine Learning and Natural Language Processing. Using proprietary AI technology with zero third-party dependency,’s products are set to revolutionize document heavy business processes by streamlining multiple channels so as to deliver end-to-end process automation. They aim to move towards a paper free, efficient and intelligent process. In addition, whether you're looking for a custom AI IDP application or seeking to integrate IDP solutions into your existing systems, has the experience and expertise to help you achieve your goals.

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