Automated data extraction from Purchase Orders

Automated data extraction from Purchase Orders

Digitization is a term that is being heard almost every day. Digitize this, digitize that. All companies want to go paperless and be completely digital. But what does digitization actually mean in the business world and which companies are more suitable for it?

In this blog, we are going to guide you through the case of a Logistics company moving towards a paperless office, and what they are gaining from that.

Case study of a Logistics company

A large portion of purchases are now being done by the Internet, so logistics companies find themselves vulnerable to the number of incoming purchase orders. What used to be only a B2B model for Logistics has nowadays broken into B2B2C, also called B2BC. What does this mean in practice? An increased amount of incoming purchasing orders with way more details over the document to be taken into consideration.

The problem and its descendants

As you may have guessed it right, by now, the physical paper flow is the most problematic touchpoint of the aforementioned process. Of course, it is not an issue that just appeared recently, but a continuous loop of problems and patches instead of problems and solutions. Simply, many Logistic companies have temporarily, and not hired personnel to manually enter all the information of the physical purchase order into the operating ERP system. Why is that really a problem? By now the problem should speak for itself. Processing time for the entry is too high, prone to human error and the cost is not exponentially scalable. To put it more simply, too much money is being spent, too much effort is being made and the results are not 100% perfect, so this scheme can not serve as a long term solution.

How to overcome the hurdle

The existence of a hurdle is not terminal for a race, however, it does play a role in how effortless the race will be. In order to make the race to development free of hurdles as a company the technology, Optical Character Recognition has been invented. All in all, OCR contains specially crafted engines that recognize the text from any given photograph or PDF. Of course, the quality of the photo or the scanned PDF has to meet certain criteria, but when those are met, all the information contained in the document is being automatically extracted. The functionality of that solution can tackle all the aforementioned problems at once. Allow me to break it down to you. The average speed of the extraction is being counted in seconds, compared to dozens of minutes in the manual entry. The money investment is in most cases a one-time fee, and if it would be simplified to the core, it is much lower compared to the hourly wage of an employee doing exactly the same task. Moreover, the engines made for OCR are based on confidence intervals, so you can have a clear overview of the errors that will be made, if there are any, compared to the volatility of a human work. Finally, it is absolutely scalable and can be custom-fit to any unique demands of the workflow.

The Hurdle Remover

Also known as Klippa, it has been long-time specialized in automated data extraction from documents (OCR). Starting in 2014 with a simple OCR solution for extracting data from receipts, Klippa has now expanded into extraction of data from many types of documents. Invoices capturing, ID card parsing and Passports OCR are just some examples. Most significantly the extraction of data from Purchase orders that arrive in Logistics companies. In an automated process that takes less than 3 seconds, all relevant details of a Purchase Order can be extracted. Details such as ID, Number, Address, Items, Amount, Total Amount, Vat, Vat Amount, etc. And if there is a certain field that is essential for your workflow and has to be extracted as well, we are always willing and able to work on it and provide the most tailor-made solution you will be in need of.

Automated data extraction is already being used by many companies for multiple purposes. One of them is the one we have explained in this blog, the extraction of data from a Purchase Order document. We would love to demonstrate to you how fast, easy and reliable this solution is. You can book yourself a free online demo for 30 minutes where we dive deeper into the specifications of our OCR engine and discover together if it is a good fit for your unique case.

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