August 14th, 2021
Contrary to popular belief, OCR and electronic processing solutions are far from being one and the same. When it comes to PDF conversion, OCR technology can provide a quick fix if automating PDF processing is your goal. In other words, OCR can be a good starting point, but it’s capabilities are limited—on the long-term, it’s neither scalable nor accurate. Electronic processing, on the other hand, is a realistic solution for organizations that need to translate PDF orders, invoices, and more, into various electronic formats but aren’t quite ready to migrate to a complete EDI solution.
Summary = Electronic Processing > OCR
Read on for a brief introduction to OCR and a helpful debunking of 3 common myths:
What is OCR?
Short for Optical Character Recognition, OCR technology is used for recognizing text characters inside of PDF files and converting them into searchable and readable data.
A few myths have led to the wide use of OCR technology in companies wishing to automate their accounts payable processes and eliminate the need for manual processing. This is because OCR is comparable to a fully automated electronic data processing solution, but in reality, it can only be considered a first step.
Myth #1: OCR Eliminates Human Intervention & Frees Up Resources
Debunked: In reality, even the most mature OCR solution cannot provide a hands-off approach. OCR can quickly extract data from PDFs, slightly reducing manual work associated with data entry. However, it cannot interpret data without human review, especially at the beginning of the implementation. This is because the system has to be trained.
For every order or invoice that comes with a new format, and for every change that is made within the PDF layout (new template, new font, etc.), manual input is needed to help OCR learn, or recognize the adjustments. For example, if you move the address field from the header level to the line level of a PDF, OCR technology must be trained to recognize that for accurate processing.
OCR vs. Electronic Processing: OCR alone does not fully eliminate manual processing. On the contrary, a true electronic data processing solution eliminates the need for human intervention thanks to intelligent character recognition, giving team members the time they need to focus on more important tasks.
Myth #2: OCR and Electronic Processing Are Equally Accurate
Debunked: While most OCR solutions work well with familiar documents and uncomplicated formatting, OCR always requires manual validation to ensure text recognition accuracy. Unclear text, poor image quality, and unknown fonts and layouts can all lead to readability issues. This causes errors that need to be manually edited and corrected.
OCR vs. Electronic Processing: Unlike OCR, which is based on data interpretation, electronic processing extracts the original data and is, therefore, 100% accurate in converting PDFs to the desired format—PDF to XML, PDF to EDI, and everything in between.
Myth #3: OCR is Cost-Effective
Debunked: At first glance, OCR solutions may appear to be a smaller investment than fully automated solutions, but there are a lot of hidden costs to consider. In other words, the more accurate you want OCR to be, the more you need to invest in it. PDF text recognition errors often lead to extensive editing and validation work that needs to be completed by a human. Depending on the quantity of errors, this can result in massive costs that first-time OCR users often underestimate. That being said, you should probably steer clear of free OCR software available online.
OCR vs. Electronic Processing: OCR isn’t always cost-effective. All things considered, a fully automated electronic data processing solution requires a small investment compared to traditional EDI solutions. If your organization isn’t ready to migrate to a complete EDI solution for EDI order processing and EDI invoicing, electronic processing may be your best bet.