Is Automated Invoice Handling with Machine Learning and OCR Really All That?

Invoice processing is a completely different beast than it was ten years ago, and today's solutions are powered by cutting-edge neural networks and intense machine learning. Here's why it matters.
February 3, 2023
9 minutes
Automated invoice handling with machine learning and OCR can transform the mood at the office.
Automated invoice handling with machine learning and OCR can transform the mood at the office.

Table of Contents

You’ve heard all the talk about automated invoice handling with machine learning and OCR, but you’re not one to be taken in by empty words. Is it all hype pushed by someone with a product to sell, or is there something going on here worth paying attention to?

As it turns out, automated invoice handling with machine learning and OCR is so much more than just hype, and may just be the most exciting thing happening since the printing press. AI is reimagining invoice processing even as we speak, and the best technology for automated invoice handling right now is brand new from the press. When we say brand new, we mean brand new: if the AP automation solution you’re using now is three years old, it’s too old to take advantage of some key advances in document processing. 

 What AI-based Automated Invoice Handling Can Do for You

Implementing an automated invoice handling system can make a night and day difference for your AP department. It’s not just about saving time and eliminating bottlenecks, although that is one big benefit. Here are a few more benefits of automated invoice handling and invoice processing software:

  • Higher office morale

When your office staff doesn’t have to spend their time on brain-numbing data entry they’ll be more cheerful, more available, and more on top of all the important work that was running by the wayside. 

  • Higher accuracy

Manual data entry is prone to a high rate of errors, and these are often very hard to catch. With high-quality automated invoice handling software, you’ll get accurate results as well as an easy-check interface and helpful confidence level ratings on every invoice.

  • Consistent early-bird bonuses

It’s great when invoices are paid in a timely manner and your firm can take advantage of early bird bonuses, but when you’re relying on someone to input all the data by hand that tends to happen very seldom. With automated invoice processing, you get the best payment terms every single time.

  • Money saved with every invoice

Manually processed invoices take an average of 17 days to get through the fulfillment process and cost between $12 and $30 an invoice, according to research firm Sterling Commerce. When you use automated invoice processing, that cost goes down to cents.

You'll see the office morale go straight up when you implement automated invoice handling.

AI-Based Invoice Data Capture in the Past

AI-based invoice data capture today is a far cry from the error-prone data extraction programs of yesterday. Invoice processing used to be template based, which means it was able to elucidate desired fields in invoices by comparing them with key fields in an invoice template. 

I’m sure you can see where the problem is there. When your supplier produces an invoice based on the invoice template in your system, everything is fine and dandy. When he produces a very similar invoice, you’ll still be just fine. But what happens when you’ve got a supplier who decides to use different invoice generation software? Suddenly, your invoice processing system isn’t worth the space it takes on your hard drive.

When it comes down to it, there are no hard and fast rules for invoice generation, and each of your suppliers has 100% freedom to format and write them exactly as they please. When you’re getting hundreds of different invoices a day, you need a better way to make sense of the unstructured data and extract the key fields that matter to you.

How Automated invoice Handling Works Today

Modern AI solutions like Affinda’s invoice extractor have completely scrapped the template approach and built a completely new way of handling invoices; a method that takes into account the unavoidable variance any larger enterprise will find in the invoices it receives.

The process begins with intelligent OCR, which cleans up your scans and transforms the scanned images into text. After deskewing, despeckling, binarizing and removing stray lines, the OCR software analyzes the layout and breaks things down into zones. Then the software uses pattern recognition and named entity recognition to transform the remaining marks on the page to computer-readable words, numbers, and symbols.  This is a dynamic, AI-based process that has become incredibly accurate in recent years.

Once an invoice has been transformed into a machine-readable document through OCR, it’s time for the machine to read it! And that’s the next step. Natural language processing is used to actually ‘read’ the invoice in a way analogous to the way you’d read a text. Just as you’d take into account both the words you read and their placement on their page, so does the AI data extraction engine. Deep learning gets at the semantic meaning of each word on the page, and continuous learning loop means that the software gets smarter and more flexible with every cycle; i.e., with each invoice processed. It’s like a stellar employee that gets better at a task the more he does it and never slacks off.

How  Invoice Capture Software Can Work For You

Impressed yet? Automated invoice handling has morphed into an incredibly potent tool, and is the secret behind the efficiency you see in all the best AP departments today. But is it difficult to implement, and will you need to run a six-month onboarding course for all your employees?

Here’s the good news: invoice capture software is actually super easy to implement, and once it’s up and running, you’ll be able to teach your staff how to use it in as little as half an hour. Here’s how it works with Affinda’s invoice extractor, one of the best OCR invoice processing tools out there.

Affinda’s Invoice Extractor comes in two packages: either a web interface or an API. The API includes plug-and-play compatibility with Xero, Quickbooks, and Zapier, which itself connects to hundreds of apps. If you don’t use any of these programs or would like to integrate invoice processing into your custom accounting system, you can get your developer to do a quick and easy integration using the REST API and our ready-to-go custom libraries. 

Once the invoice extractor is integrated into your favorite software platform, you’ll be able to parse invoices with a click of a button and extract all data into appropriate fields. There’ll be nothing for your staff to do except oversee the process and provide final confirmation before a payment goes through.

Invoice Capture Software, the Three Minute Way 

What about the web interface? While it’s not quite as convenient as a full API integration, the web interface is also easy to use. The benefit here is that there’s no implementation to do whatsoever— you’ll just navigate to the invoice extractor in your browser, upload your invoice files and download a structured database with all of the key data nicely extracted. The tool also includes an easy-check interface and provides confidence levels for every invoice.

If you’re curious about how invoice extraction works but don’t want to commit, there’s a free tool that you can try without even providing your email address or creating a login. Simply navigate to, upload your invoice files, and download the database file of your choice. The free tool is limited to 25 invoices at a time and doesn’t include all the fancy features of the full version, but it’s a great way to take a peek at what automated invoice handling software can do for you.

Choosing Your Automated Invoice Handling Solution

When you’re ready to adopt a full-scale automated invoice handling solution, you’ll want to do some research to find out which tool is the best fit for your AP department and company. Once you come up with a shortlist, you’ll want to sign up for some free trials and see what kind of results you get with real-world invoices. Five or ten isn’t enough to get a feel for how invoices are handled: we recommend processing at least a hundred for starters.

Choose a solution that is well-tested and enterprise-ready, but new enough on the market to be truly AI-based and include all the newest advancements in document processing. Legacy software is not the direction you want to be going here. Read through the reviews and find out what the experience has been like for other companies like yours.  Great customer service is a must— if you ever need support, you’ll need it promptly, and playing phone tag with computers is the definition of disaster.

Affinda’s invoice extractor is the best option out there for most AP departments, and the good thing is— we’ve got an A+ support team. Built on all the latest AI developments, our invoice handler features responsive neural networks that can adapt smoothly to any use case. It’s easy to set up, and intuitive to use. Contact us if you’re ready to give it a try,  and we’ll set you up with a free trial. We’re excited about what we’ve accomplished with this AI software, and we’d love to get your team excited about it too. 

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The world’s most accurate AI data extraction for accounts payable.

Easily extract data from even the most complex invoices. Quickly and successfully process batch of invoices in PDFs, DOC, PNG, and JPG. Affinda Invoice Extractor recognises 50+ fields on the first go – and it only gets better from there.

Extract data from your receipts swiftly and with precision. Make reimbursement and expense tracking easy. Utilise an AI receipt scanning that understands formatting and layouts it has never been exposed to before.

Our team of skilled AI experts thrives on challenges. Feel free to send your unique document processing requirements our way and we can design a custom‑made solution for you.

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