Invoices and receipts facilitate trade among companies. Even today, much of the receipt information exists on paper or in semi-structured formats like PDFs & images of hard copies.
In the absence of an automated expense reporting tool, the traditional way to handle receipt data has been its manual extraction, verification, structuring, editing and then storage, without any guarantee of data integrity and correctness. This is not only super slow but inefficient as well.
Even if a traditional OCR scanner is used, it is not smart enough to discern, & contextualize, relatable fields in the receipts, not to mention its slowness & inaccuracy.
This is precisely where an ML based expense management software surpasses the traditional way of expense resolution.
Receipt data extraction by ML (machine learning) based OCR
A crucial element of an effective expense management automation is its machine learning (ML) technology based OCR (optical character recognition or optical character reader).
It electronically converts receipt data (from receipt hardcopy scans and images) character by character into machine-encoded text using software.
As opposed to the traditional, error prone & inefficient manual way of expense management, ML based expense management solutions empower the employees to simply scan the receipt/invoice through their smartphone camera and upload it. Based on a confidence factor assigned to every character scanned, the ML based OCR extracts user deemed relevant data from the uploaded scan copy of the receipt and auto-populates the expense submission form accurately in a very short time. Then, the employee has to just review and submit it.
It harnesses & unifies the power of tech advancements in:
- Cognitive computing
- Key data mining
- Text mining
- Artificial Intelligence (AI)
- Computer vision
- Pattern recognition
- Machine translation etc.
Efficient archiving, fast indexing & effortless document analytics are achieved through ML based receipt digitization.
It allows speedy scanning and reporting of expenses by the employee while he/she is on-the-go. This quickens the employee expense reimbursement cycle.
The regular not-so-smart OCR is unreliable for it requires manual cross-checks and edits of the incorrectly extracted receipt data.
On the other hand, an ML based expense management solution maps the receipt’s content with expense form’s fields (like currency, amount, tax name, tax rate, vendor name, GST number etc.) correctly and within seconds.
The more receipts it scans and maps, the more expeditious it becomes, eliminating risks of mismatches & inefficiency.
In addition to these powerful features, an ML based expense tool is also capable of matching your credit card transactions with an expense created as soon as it has extracted the data. The most important aspect of tools like Zento is that they don’t frustrate the employees with expense resolution!
Receipt data extraction & privacy of information
Privacy and safety of your information is of paramount importance, more so when the expense management is handled by a third party to which your company has outsourced the expense resolution process.
It depends on the implementation of data extraction as done by that third party. The third party’s workforce will be privy to your data if there is human involvement at any stage of the expense processing.
However, ML based expense automation tools like Zento provide information storage over secure Cloud with regulated access, without any unauthorized intervention.
Data privacy is ensured and none of the data is outsourced or visible to any external entity if you have an ML based expense software like Zento at the helm.
Difficulties in receipt data extraction
Here is a list of some of the challenges in receipt scanning which traditional OCR scanners can’t cope with today.
- Handwritten text on the receipt
- Faded text of receipt’s content (e.g. unclear difference between ‘5’ and ‘S’, or ‘0’ and ‘O’)
- Faded images (e.g. hazy logo/name of the brand/company)
- Unreadable minute fonts of receipt’s text
- Characters/words in the text from multiple languages
- Blurry receipt scan owing to camera motion and shaking
- Receipt’s improper orientation while scanning
- Wrinkled/torn receipt
- Smudged receipt text
An ML based expense management automation tool, while doing its job, also trains itself continuously to recognize the receipt’s contents accurately and quickly even if the receipt is crumpled or the text is faded or the fonts are too minute. It is able to contextualize the receipt data with high degree of accuracy over time.
Impact of inefficient receipt data extraction
- Inaccurate or incorrect receipt data extraction curtails the benefits of automated expense reporting by forcing the employees to manually correct all mistakes in the expense reporting form.This is obviously more time consuming and even frustrating. What’s more, it discourages timely submission of expenses by the employees in future.
- Some expense management solutions still take an inordinate amount of time (from several minutes to half an hour) to complete a receipt scanning.
Today, businesses deal with hundreds and thousands of invoices and receipts; a slow receipt data extraction affects the bottom line significantly as expense resolution is not prompt.
- Extracting only basic data from the receipt (like currency, total amount etc.) is not enough today. Your expense management software should classify & vibe with the receipt data.
For instance, it could be:
- Vendor/merchant details (like name, phone, fax, email, website, GST number etc.)
- Values (like discount rate, tip, rounding, currency exchange rate, GST, cashback, total etc.)
- Dates (like order date, ship date, delivery date, invoice date, due date, check-in & check-out dates etc.).
ML based extraction of receipt data classifies it to accurately auto-populate fields of the expense submission form, facilitating expeditious expense recording and resolution.
Tallying the expense records later on becomes facile & quick.
Seamless data extraction from filed receipts: 24 X 7 X 365
- Worried about the piling paper receipts/invoices on business trips? Mobile apps of automated expense reporting solutions like Zento, being incredibly user friendly & intuitive, allow the employees to click snaps of their receipts and upload it to the system from anywhere, anytime, throughout the year. The system extracts receipt data, auto-populates the expense form with it (in compliance with the set policies, of course) and finally the employee submits it for processing.
- Employees can submit expense documents in bulk as well and the ML based receipt data extraction takes care of everything within seconds, something which is unimaginable with the traditional & tiresome manual expense management.
- The expense management software has provision of dragging and dropping of scans of receipts/invoices in its web app for those employees who prefer the web app version of the software.
ML based receipt data extraction provides a multitude of benefits and boosts financial productivity of the company. It eliminates issues like error in invoice processing, fraudulent claim submission, duplicate reimbursements, expense policy non-compliance, delayed resolution of valid claims etc. and strengthens company’s audit readiness.
Empower your employees with Zento
Zento is a Cloud-based automated expense reporting solution for organizations of any size, with embedded ML based OCR for receipt scanning. It can also be customized as per the workflows of every individual organization.
- Although automation makes life easier, it doesn’t snatch away your control from the expense submission. With Zento, You can make certain fields in the expense form mandatory, or capture additional data from the receipts easily without scrambling for clarification from employees every now and then.
- Duplicate expenses are an indication of possible fraud and may lead to compliance issues, but not with Zento at control. It can detect duplicates in real time, right when the employees are scanning their receipts. If the total receipt amount & date of spend are detected as repetitive, the employee gets notified of it.
- Zento checks fraudulent activities & overspending by allowing the company’s management to set up policies at different levels for the employees. In other words, instant audits of expenses can be enforced through policies, however complex they might be.
- If you wish that certain fields in the expense form be auto-populated with some default values based on your previous expense submissions, you can do that by enabling ‘auto-fill’ feature. Thanks to its self-training, Zento learns from your expense pattern and speeds up the expense submission process for you.
In addition to the features discussed hereby, Zento facilitates advance reconciliation of expenses, setting up multiple approver levels, integration of pre-paid corporate debit cards Enkash cards, real time data backup, easy integration with major ERPs, automated expense reports and much more.
For an exhaustive account of how Zento is an all-in-one solution to bring entire expense reporting & resolution process of your organization on a single platform, feel free to contact us for a 3 month free trial of Zento.