OCR and ML applied to Accounts Payable and financial documents

Applying Optical Character Recognition (OCR) and Machine Learning (ML) to Accounts Payable and other financial documents can significantly increase accuracy and precision to streamline compliance processes. Here’s an overview of how these technologies can be used:

 

1. OCR

OCR technology converts different types of documents, such as scanned paper documents, PDF files, or images of documents captured by digital camera, into editable, indexed and searchable data.

In the accounting context, OCR can:

• Extract data from orders, invoices, receipts and delivery notes: automatically capturing, digitizing and indexing text from scans or photos of paper invoices, receipts, and other financial documents
• Reduce errors: reduce human error associated with manual data entry and time spent on manual matching and verification.
• Structure data: convert unstructured data into structured and indexed data to facilitate its processing, use, association and transfer.

 

2. Machine Learning (ML)

ML models can be trained to perform a variety of tasks to faciliate the processing of financial documents, including:

Automated data entry

Extract and classify data from key fields (e.g. vendor name and address, invoice number, date, item(s), amount) in invoices, receipts and other financial documents and associate it with other relevant documents in your accounting systems to improve accuracy and facilitate auditing and compliance.

Anomaly detection

Identify discrepancies, anomalies, and errors by analysing patterns in financial data and use that to improve financial processes, eliminate wasted expenditure, and optimize achievement of accounting objectives.

Invoice matching

Automatically match invoices to purchase orders and delivery notes or to vendors, cost centres and VAT codes, ensuring accuracy, accelerating the approval process, and streamlining compliance with auditing procedures.

Expense categorization

Rapidly and mechanically categorize and allocate expenses, transactions, cost centres and VAT codes based on historical data and learned patterns.

Predictive analytics

Forecast future outflows and inflows and various other financial metrics to generate predictions based on historical data for more realistic scenario planning and accurate budgeting.

 

Integrating OCR+ML into your accounting workflow

Combining OCR and ML allows you to create a seamless automated workflow for the entire accounts process:

1. The AP workflow begins with document capture, where OCR technology is already used to scan paper documents or photos of them so they can be handled, processed and stored electronically.
2. While being scanned, machine learning models extract the data from relevant fields in these documents.
3. This data is then cross-checked against existing records, such as purchase orders, delivery notes, service vendor statements, or ERP entries to ensure its accuracy.
4. At this point, the system also flags any anomalies or discrepancies for further review.
5. Following validation, the documents are routed automatically according to a company-defined roles- and rules-based approval process, to relevant managers to approve.
6. The validated data is automatically entered into the accounting system according to company rules and processes, updating records in real-time.
7. Finally, machine learning is used to generate historical analyses, future forecasts, and detailed reports based on the processed data, providing valuable insights into company performance and accurate information to support strategic decision-making.

 

By leveraging OCR with machine learning, organizations can significantly enhance the efficiency and accuracy of their accounts workflows and facilitate auditing and compliance.

 

Comply Platform: the digital solution for your accounting process

Transform your accounting processes with our cutting-edge platform that uses ML to leverage OCR for significant improvements in compliance, precision, accuracy, productivity and efficiency.

Our solution automates data entry, reduces human error, detects anomalies and discrepancies in financial documents, facilitates auditing procedures, and supports analysis and data-based decision making, ensuring a seamless and efficient workflow to help your finance team increase accuracy and compliance, save time, minimize costs, and advance strategic business performance.

Move your management of financial documents into the future and take your accounts payable to the next level with our innovative platform.