If you're like me, you're probably not too sure what to do with a scanned document, right? And if you’re like me, you likely get these things all the time - contracts, brochures, quotes, invoices. Oftentimes you save them to a shared folder and pat yourself on the pat for being so environmentally conscious.
But what if the document is an invoice from your supplier? Like like most accounting departments you'll print it out so someone can key it into your accounting system. So much for being environmentally conscious.
You and I need to stop doing that. That's because there's a bunch of software applications that are able to actually read and extract that information from a scanned document. I know, it sounds like dark magic. But it's not. It's called Optical Character Recognition - or OCR - and it's not only changing the way accounting departments are getting information into their system, but saving companies hundreds of hours every year.
This is not exactly new. The more established companies offering up this kind of technologies have been around for a few years. But most of the time these applications were geared towards middle market and larger companies. Now, some of these companies are turning their sights on small business. It’s about time.
For example, just this week Bill.com has released an updated service particularly aimed at small businesses that promises to reduce data entry time, eliminate human error and save up to 5.5 hours of time each week.
“Bill.com has focused on developing new technologies that help SMBs grow. Automating the back office is a huge industry-wide need,” René Lacerte, the company’s CEO and Founder said in a press release. “Our new intelligent platform, which is the most significant update to Bill.com since its inception, is built on ten years of experience managing business payments and hundreds of millions of bills and invoices to train the AI. Increasing the speed and ease of payments will help businesses get ahead.”
The applications generally work like as follows:
You tell your vendors and suppliers that, instead of mailing you manual invoices they instead (if they want to get paid) email their invoices to an address provided by the automation platform. That, by the way, is the most time consuming part. But once it’s done, the software takes over. The platform receives the email, scans the attachment, extracts the information and puts it into a format for your accounting staff to review. The information is then imported into most accounting systems, like QuickBooks or Quicken.
“Any company that’s still making bill payments the old-fashioned way really needs to innovate their back office,” says Gary Hornbeek, VP of Finance for Quicken. “The Bill.com Intelligent Virtual Assistant saves a great deal of time for our finance department. When invoices come in, IVA automatically processes and codes the invoices in the system with vendor name, invoice number, amount and due date. This can drastically reduce hours spent on manual entry.”
The benefits are significant. Manual data entry time is significantly reduced. Human errors are minimized. Approval processes are streamlined. Business rules are followed. Payments can be automated.
Like I mentioned above, Bill.com is not the only game in town. Their competitors like EntryLess and Receipt Bank do similar stuff. And applications like Expensify and SAP Concur use OCR to automate the collection of your travelling employee's airline, dinner, taxi and hotel charges into a timesheet that can be quickly reviewed, approved, imported into your accounting system and paid.
My prediction is that many smart businesses owners will be using technologies like these in the not-so-distant future. Why? Because these applications eliminate man-hours. They cut costs. They reduce fixed overhead. And one day that will also be in the not-so-distant future the economy will turn downwards, sales will dry up and the companies with the lowest cost structures will be in a better position to navigate and survive. Those are the companies that are right now automating their back offices while the going is good.
No, this is not dark magic. It's common sense.