

How much time have you already wasted sorting through documentation? Most likely, there are many who can relate. According to PWC, the United States alone has roughly 4 trillion paper documents, and that number still continues to grow at a rate of 22% per year. Now add emails, images and PDF files to the equation.
It doesn’t matter where you look, any industry deals with similar issues. With so many unstructured document formats that cannot be automatically read or processed by standard software, it feels like there’s no escape from data overload. And it’s not even the worst part if you think about the amount of mistakes that can go unnoticed in such chaos.
Luckily, the more frustrations there are, the more remedies appear. Intelligent Document Processing is one of those cutting-edge solutions to make your life simpler. It’s meant to not only speed up the flow with automated document processing but also make it error-free.
Read on to discover more about Intelligent Document Processing, its benefits, and the most common use cases. Enter the world where mundane tasks are automatically completed while you focus on business growth.
What is Intelligent Document Processing (IDP)?
Intelligent Document Processing (IDP) is a type of document processing automation that employs data science to assist computers in understanding unstructured data.
Have you ever seen a sophisticated technology that can understand what a document is, what information it contains, extract that information, and then deliver it to where it’s needed? Well, that’s Intelligent Document Processing (IDP) in a nutshell.


It can convert document contents into machine-readable formats like CSV, JSON, and XLSM, classify or verify them and send extracted data to databases or ERP (Enterprise Resource Planning) systems.
With intelligent document processing solutions, in just seconds documents go through the whole processing cycle. Can you already envision how life-changing it is?
How Do IDP Solutions Differ from RPA and OCR
To get a better grasp of what IDP is, let’s compare it to the two contenders which are frequently misunderstood for Intelligent Document Processing. Meet RPA (Robotic Process Automation) and OCR (Optical Character Recognition).
IDP vs RPA
In the context of document processing, Robotic Process Automation and Intelligent Document Processing both aim to automate processes like data extraction.
RPA depends on rule-based automation and uses bots to complete routine tasks. IDP technologies, on the other hand, make use of machine learning and AI algorithms to not only manage complex data, but also improve accuracy over time.
As a result, IDP can handle both structured and unstructured data (such as PDF documents or business letters), whereas RPA is best suited to process structured document formats (think of machine-readable databases).
IDP vs RPA vs OCR
Optical Character Recognition is the underlying technology that transforms images into readable text to eliminate the need for manual data entry. Hence, neither IDP nor RPA can extract data without the use of OCR.
Furthermore, like RPA, OCR lacks intelligence and can only recognise text based on predefined patterns. Therefore, OCR is a rather limited tool on its own.
This is where IDP comes into play. By combining OCR and RPA with AI capabilities, Intelligent Document Processing allows for more sophisticated and context-aware data extraction from documents.
How Does Intelligent Document Processing Work?
Now that you know how IDP technologies stand out among others, we’ll explore how it attains what it’s set to achieve. Simply said, in order to accomplish document processing automation, Intelligent Document software uses a number of different technological components:
- Optical Character Recognition (OCR)
- Artificial Intelligence (AI)
- Computer Vision (CV)
- Natural Language Processing (NLP)
- Robotic Process Automation (RPA)
Let’s take a look at the roles each of these technologies play.
Optical Character Recognition (OCR)
With its capacity to detect individual characters, OCR is able to extract data from images or scanned documents. Integrated into the IDP system, this component empowers the conversion of extracted text into structured, machine-readable formats like JSON.
Artificial Intelligence (AI)
AI extracts meaning from images, documents or handwritten texts, detects both patterns and anomalies and makes predictions based on algorithms. For instance, its capabilities are essential when it comes to fraud detection. Moreover, AI document processing allows an IDP tool to continuously learn and improve in terms of accuracy.
Computer Vision
Computer Vision allows IDP solutions to view, observe, and perform object detection. For example, it can recognise things such as price tags, license plates, utility meters, and so on.
Natural Language Processing (NLP)
NLP allows IDP solutions to comprehend data more quickly and intelligently. Named Entity Recognition (NER) is a frequently used technique within NLP that involves identifying and categorizing particular words or phrases in documents. For example, it allows IDP to recognise that “Jane” is a female name and “Amsterdam” is a location.
Another example of NLP would be Fuzzy Matching. It enables Intelligent Document Processing software to recognise and extract data that may not be an exact match due to document mistakes or typos, resulting in a more flexible and accurate method of data extraction.


Robotic Process Automation (RPA)
The role of RPA in an Intelligent Document Processing is to make it more scalable by automating the processing flow. With the help of RPA, an IDP tool can automatically complete relevant tasks or communicate with other digital systems.
Top 7 Processes to Automate with Intelligent Document Processing Software
We’ve established that, in order to achieve advanced automation of document workflows, Intelligent Document Processing software effectively employs AI, OCR and other technologies. But what exactly can it do? Let’s dive into the functions that IDP frequently provides:
- Data Capture
- Data Extraction
- File Conversion
- Classification
- Data Anonymization
- Verification
- Delivery & Integration
Data Capture
With the help of OCR, IDP solutions capture data from various sources into a computer system for further processing, often with a mobile device. It can be used to scan and capture data from various documents such as receipts, invoices, ID cards, passports, driving licenses and many other documents.


Data Extraction
Upon receiving a scanned or captured image of a document, IDP solutions intelligently extract relevant data using OCR and AI algorithms. The more advanced the algorithms, the more precise the data extraction.
File Conversion
At the same time, IDP software converts documents, images or scans into machine-readable formats like JSON, making the data usable to be further integrated into ERP software or company databases.
Classification
Simultaneously, IDP uses AI algorithms combined with NLP to identify document types. It matches unknown documents to existing categories and then calculates a similarity score. The similarity score is then used to determine the most accurate category for document classification. For example, it can recognize whether the document is an invoice or a receipt based on the location of information.
Data Anonymization
A few Intelligent Document Processing solutions can automatically anonymize sensitive information from documents. What it entails is the removal or encryption of sensitive data, such as social security numbers for GDPR compliance and other privacy regulations.
Verification
In addition, Intelligent Document Processing software can verify the document. It can do it by analyzing data integrity, comparing documents to the existing database using two-way matching, or utilizing fraud detection algorithms.


Delivery & Integration
After the processing is complete, IDP technologies deliver the machine-readable output to the desired destination. This very much depends on which types of integrations the Intelligent Document Processing solution provides.
Ready for more? It’s time to learn about the key benefits of implementing such software into your workflow.
How Can You Benefit from Using Intelligent Document Processing Solutions?
IDP solutions are very effective when it comes to increasing the overall efficiency of all document-related processes. From increasing your workplace engagement to scalability, there are numerous advantages you can look forward to.
- Increase workplace engagement. With a simple click of a button, IDP can capture, convert, classify, verify and deliver data to the right endpoint. Think about it, automation empowers your employees to do more worthwhile tasks.
- Reduce processing time by 90%. Instead of 2-3 minutes per document when processing manually, IDP can take one document through a full processing cycle in up to 10 seconds.
- Achieve up to 99% data extraction accuracy. Manual document processing is unlikely to reach more than 95% accuracy. In comparison, an IDP solution can help you achieve near 100% data extraction accuracy while lowering your costs.
- Improve security & compliance. IDP technologies can define fields with sensitive information and use data masking to redact or anonymize them, making you GDPR or HIPAA compliant. Next to that, IDP solutions use various techniques to detect fraud, allowing for precise Know Your Customer (KYC) checks.
- Scale your business. Intelligent Document Processing workflow falls under scalable processes. That is, if your company grows and the volume of documents increases, using an IDP tool will ensure that you don’t need to recruit more people or spend more money.
- Save up to 80% in operational costs. On average, processing one document manually can cost anywhere from €4-6. With IDP, this cost goes to less than €0.50. Give our ROI calculator a try to see how much you can save up!


What Are the Use Cases for Intelligent Document Processing?
It should be clear by now that organizations deploying IDP to automate their document workflows can significantly benefit from it. But how can you use it in your business case?
There are endless applications for intelligent document automation. Below, we have listed the use cases that we often encounter:
- Data entry automation for simplified and error-free workflow
- Data masking for GDPR, HIPAA, and other data privacy regulations compliance
- Streamlined purchase order processing
- Automated invoice processing for accounts payable process
- Receipt processing for expense claims
- Automated document fraud prevention
- Automated receipt clearing for loyalty campaigns
- Capturing product data from price tags for market analysis
- Scanning menu cards for menu optimization
- Effortless ID verification to prevent identity fraud
- Reliable Age Verification for industries with age-related restrictions
- Automated KYC process for AML (Anti-Money Laundering) and CDD (Customer Due Diligence) compliance in finance
- Secure 24/7 digital onboarding
Want to learn more? Explore our blog about Intelligent Document Processing use cases. If your use case is not mentioned, no worries! IDP is very versatile. In most cases, with time and determination these solutions can be trained to process any document or language. The world is your oyster!
Intelligent Document Automation with Klippa DocHorizon
Are you excited about all the possibilities that will open up after you implement Intelligent Document Processing? We are as well! Klippa is passionate about empowering our clients and partners to focus on what matters most rather than get lost in a rut of tedious repetitive tasks.


With our intelligent document automation software Klippa DocHorizon, you can confidently automate your document workflows at scale. It will take your data extraction, classification, document conversion, masking, and verification to the next level.
Plus, you can easily implement it into your existing software or application via API or SDK. The best part? With our onboarding team and well-structured documentation, it won’t take you more than a day to get started! Book a demo below or contact our team to start your journey and become a document processing champion!