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Improving Accounts Payable Processing Efficiency Through OCR Technology


Even though Optical Character Recognition (OCR) technology has been readily available for several decades now, a significant number of the major companies in the world do not currently utilize it.  With the recent advances in this technology, which have increased its capabilities to correctly interpret and translate information to a digital format, OCR has become a key enabler to the increased efficiency of many Accounts Payable organizations. 

While Intelligent Character Recognition (ICR) technically is a subset of OCR software, the primary difference is that OCR is typically not set up to recognize handwriting.  For that reason, depending on the type of businesses supported by Shared Services, the enhanced ICR capability may be the preferred technology.

Company Experience

A recent Peeriosity PeercastTM featured a large global manufacturing and retail company with operations in 60 countries and over $17 Billion USD revenue, during which they shared their experiences in implementing and utilizing OCR in their Accounts Payable operation.  Originally having implemented OCR in 2009, they have since seen a significant improvement in the ability of the technology to recognize the key data fields on the incoming vendor invoices. 

Some of the reasons the company utilizes OCR in their AP operation include the following:

  • Quicker processing; no moving or storage of paper near AP employees
  • Reduced process costs by reducing data entry times between 50% and 80%
  • Scanning and recognition allow efficient management and planning for the rest of the processing workload
  • Reduced long-term storage requirements, paper documents could be destroyed after the initial scanning, recognition, and repair
  • Improved business process
  • Continuous improvement thru machine learning

With their wealth of experience with OCR over the past nine years, there are many lessons they have learned during that period.  Some of the top ones include the importance of investing the time to train the system via machine learning, being aware that the pricing models can vary significantly between OCR technology providers, and being cognizant of language barriers when applying this technology to source documents from different countries.

iPollingTM Results Review

A poll was recently generated using Peeriosity’s iPollingTM technology in support of this PeercastTM and the results provided some excellent insight regarding the use of OCR at major corporations located across the world.  The first poll question looked at the status of utilizing OCR technology in Accounts Payable, with 28% of the companies using it extensively, 24% using it on a moderate basis, and 6% on a limited basis. In total, 58% of the companies are using OCR to one extent or another.

iPolling: status at your company of using OCR technology

The second poll question asked about the biggest challenge companies have experienced related to implementing OCR in Accounts Payable.  Not surprisingly, the most prevalent response was related to companies getting the templates set up within OCR so that data fields are properly recognized, with 27% selecting that response option.  Other popular responses included training issues, vendor document changes, and the compatibility of the OCR software with existing technology, all at 13%.

iPolling: biggest challenge related to implementing OCR

Some related poll comments provided by Peeriosity members include the following:

Real Estate & Construction Member: Biggest challenge so far is getting the project approved and then the process to determine needs for our separate operating companies (lacking consistency).

Manufacturing Member: Software changes within the company somewhat affect the compatibility. This is still a challenge to work around.

Retail Member: We are in the process of implementing OCR. We have had to push our go-live date multiple times due to different complexities with our invoices. We did not standardize our invoices first, which has created more of a challenge with implementation.

Real Estate & Construction Member: OCR technology has been very useful where implemented, and we plan to eventually use it in others ways in our AP department. We have had some issues with our programs not capturing correct invoice information, but, overall, it has been a great investment.

Manufacturing Member: Getting exception workflow queues scripted is our biggest challenge.

Healthcare, Pharmaceuticals, Biotech Member: Implemented OCR in 2009.

Consumer Products Member: Terrible experiences within our global scope and, pretty much, every language on the planet. What was implemented simply didn’t deliver the results expected to justify the time and investment.  Since then, we have, in the last 6 months, evaluated two other solutions which present the same challenges. So right now, there is nothing in our portfolio to deliver data capture from paper or PDF invoices.

Closing Summary

While approximately two-thirds of companies are currently utilizing OCR as part of their Accounts Payable operation, just 29% are doing so on an extensive basis.  That leaves the majority of companies in a position to benefit even more through the use of this powerful technology which has significantly improved its level of effectiveness over the past decade.

What is the status at your company in regards to the implementation, or increased utilization, of OCR technology?  Is it time to take another look at this critical technology?

Who are your peers and how are you collaborating with them?


“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPollingTM.

Peeriosity members are invited to log into to join the discussion and connect with Peers.   Membership is for practitioners only, with no consultants or vendors permitted.  To learn more about Peeriosity, click here.

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