Most organizations, no matter how successful, have to deal with a rather large amount of not-so-glamorous document processing tasks. In fact, a study done by Xerox revealed that 46% of the employees from small and midsize businesses waste time on inefficient paper processes each day.
These include typing data for hours on end, scrolling endlessly through emails, or even worse, manually filing thousands of paper documents from old, dusty archives. Not only is manual document processing error-prone, time-consuming, and expensive, but it is also quite redundant.
To get rid of this burdening, outdated process once and for all, businesses have started to look into automating document processing. The automated variant of document processing involves employing Optical Character Recognition (OCR) and new-age technologies, such as Machine Learning (ML), Natural Language Processing (NLP), and other AI technologies to improve the existing process.
If you’re curious about how your business can also automate document processing, keep reading! In this blog, you will get valuable insights into what automating document processing entails, how it can be implemented, and what benefits it brings. Let’s start!
Document processing allows you to convert physical documents into digital formats by extracting the data and making it machine-readable so it can be further processed.
Automated document processing replaces manual data entry with AI-powered technologies like OCR, Machine Learning, and Natural Language Processing. This shift increases accuracy, reduces processing time, and decreases operational costs.
With Klippa DocHorizon, document automation is easy: upload any document and let the platform handle extraction, validation, conversion, and secure delivery. Output formats like JSON, XML, CSV, or PDF integrate seamlessly with your existing systems.
Whether it’s invoice processing, payroll automation, fraud detection, or identity verification, DocHorizon empowers businesses across industries to scale faster, work smarter, and streamline their document workflows.
What is Document Processing?
Document processing involves analyzing physical documents, PDFs, and images to extract key information and convert it into machine-readable formats, enabling easier storage, retrieval, and system integration.
Before, manual document processing was the norm. A person would read through files, retype information into spreadsheets or systems, and print, scan, and store hard copies.
But, with time, automated data processing emerged, with technologies like Optical Character Recognition (OCR) converting printed or scanned text into digital formats.
And, lately, the latest stage in this evolution: Intelligent document processing (IDP). IDP makes use of OCR and several intelligent technologies, such as machine learning, natural language processing, computer vision, and even deep learning, to intelligently extract, classify, validate, and integrate document data into systems.
While automation streamlines repetitive tasks, IDP understands your documents, learns from patterns, and adapts over time. It doesn’t just scan and extract – it makes decisions, verifies accuracy, and flags inconsistencies based on rules and learned behavior.
An IDP solution that involves all of these technologies is slowly but surely becoming the standard. Simple data extraction is not a current practice anymore, as businesses are constantly looking to elevate their business document processing systems.
With an automated document processing solution, there are only a few steps required to transform this process from an administrative nightmare to a smooth and effective task.
How Does Document Processing Work?
Automated business document processing involves AI technologies like OCR, NLP and Computer Vision to transform unstructured data into structured data. Examples of unstructured data include images, PDFs, scanned documents, emails or other documents, whereas structured data include CSV, XLSX, XML, JSON, UBL and other machine-readable formats. The benefit of structured data is that computers and software solutions are better at processing them.
Some document processing options are based on a specific set of rules. Therefore, it is mandatory to first create a set of rules, as they pave the way for an accurate data extraction process. Document processing software embedded with AI often has the capability to classify a document type. It reads through the document and its content, analyzing the structure type and identifying the occurring patterns in the file layout.
Moreover, when dealing with unstructured data formats such as images, scanned documents or PDF files, a document processing solution is also responsible for cropping them, reducing noise or deskewing the files. This step is essential in improving the quality of the document, and preparing it for the data extraction process.
Information Extraction from Documents
Information extraction from documents happens when OCR technologies are employed. Optical character recognition is responsible for turning images into text, extracting information, and converting it into machine-readable formats such as JSON, CSV, and XML.
The same can be said about ICR, or intelligent character recognition. This technology is used especially in detecting and extracting handwriting, which cannot always be extracted just by making use of an OCR solution.
Error Detection and Correction
OCR technologies are rather sensitive to errors, especially if your document is structurally complex. This means it contains both text and images and is presented in an unstructured or semi-structured format.
To avoid any kind of post-extraction surprise, businesses have the option to implement human-in-the-loop or use software with human-in-the-loop functionality, a process where an employee reviews the data extraction output and, if needed, makes some necessary changes.
However, considering today’s status of rapid technology development, most OCR software found on the market has an accuracy rate of more than 90%. Therefore, with the right amount of training and employment of AI technologies to support OCR software, the output of the data extraction is rarely inaccurate.
File Conversion and Data Storage
In order to further process the extracted data, you first need to convert it into a machine-readable format. As soon as the information has been extracted, it is converted by default into a JSON format.
However, there is a variety of available formats you can convert documents into, such as TXT, CSV, XML, XLSX, and PDF. By doing so, you can make sure the information that has been captured is compatible with any existing application or platform your business might use.
Benefits of Using Automated Document Processing
Using an automated document processing solution is preferred over the classic, manual task. It gives a number of significant advantages, which make your business much more efficient, without affecting your core business processes:
Cost efficiency: Financial loss associated with post-processing documents or repairing human errors are completely eliminated. An automated document processing solution saves important amounts of money for your business.
Minimize human intervention: In data extraction processes, business document processing offers a significantly more accurate output from the get-go. There is no need to have back office employees go over the files themselves, reducing the amount of human errors as well.
Automate document archiving: A document processor analyzes the document type and recognizes the targeted data fields, based on the predefined rules or AI algorithms. Therefore, it is able to process multiple document types, such as invoices, receipts, identity documents and many more.
Scalability: Your business is able to gather all important business information using an automated document processing solution. Therefore, document processing is possible, regardless of the document type you need to process, or the format it comes in, be it images, PDF files, text, or emails.
Shortened turnaround time: An IDP solution processes documents within seconds, shortening the extraction workflow and freeing up the schedules of your employees from daily repetitive tasks.
Automate Document Processing: Process More in Less Time.
All of these benefits can be applied to businesses across multiple industries. As business document processing is a core task for the majority of companies, the use cases for automating it stretch far and wide.
Use Cases for Automated Document Processing
Automated document processing solutions, as mentioned before, can be applied in multiple situations. Some of these include, but are not limited to:
Payroll automation: Document processing solutions employing automation allow for an automated payroll system, as it reads through all existing and incoming pay stubs. It extracts the essential information and automates the manual task of going through all of the employee’s personal and financial information.
Business expenses reimbursement: This daily process can take up a large amount of time and might be one of the most error-prone tasks in an organization. An automated document processing solution helps prevent any type of fraud that might occur and makes the data extraction process smooth, while seamlessly integrating the captured data into your existing systems and applications.
Procurement automation: Invoice and purchase order processing are some of the most important, but also time-consuming activities in a business. Automating business document processing for these document types means fewer errors and faster processing times. In addition, business relationships are improved, as the mutual trust between vendors and organizations is enhanced.
Document fraud detection: Smart document processing solutions automatically detect any signs of document tampering and fraudulent activity. Employing these technologies ensures that your business not only stays compliant with legal requirements, but also keeps external fraud at bay, such as invoice fraud or identity theft.
Identity proofing: Automated document processing solutions don’t only limit themselves to data capture. In identity verification, an IDP solution helps organizations verify the identities of users, employees and business partners, abiding by AML and KYC regulations. It also helps streamline the process for digital onboarding, enhancing user experience and creating a safe and secure environment.
How to Choose the Right Document Processing Solution for Your Business?
Not all document automation platforms are created equal. Before delving right into the first intelligent document processing solution, take a step back and first consider some of the characteristics that you should look into before selecting and committing to a document processing solution:
Document coverage: Your business, like many others, doesn’t limit itself to processing only one or two document types. Therefore, you should opt for a document processing solution that is able to read and process a large variety of documents, such as invoices, receipts, or identity documents.
Language support: Needless to say, having the possibility to process documents in multiple languages can only aid your business in gaining a valuable competitive advantage. A global coverage in language support is ideal, especially for organizations conducting business across the borders.
OCR accuracy: An increased level of accuracy means an increased level of quality in all of your business ventures. The ideal IDP solution makes use of AI and ML technologies, which enhance the accuracy of your data extraction processes up to 99%.
Securityand compliance: The safety of your organization’s information, as well as your employees’, should be a top priority. By default, when searching for an IDP solution, you should choose the one that ensures the processed data is not sent to third parties or kept in private servers. Abiding by GDPR, HIPAA, ISO standards, or other data privacy regulations is a must in all circumstances.
Integration variety: Most of today’s businesses look for a smooth internal workflow when it comes to their data management. Having the ability to seamlessly integrate an IDP solution within existing applications, be it ERP systems, accounting platforms, or even email providers, can differentiate a good IDP solution from a great one.
Speed of data extraction: When deciding to automate document processing, one of the main key outcomes is cutting down on processing times. Therefore, it is advised to choose an IDP solution that is able to offer qualitative output in just a few seconds, giving you your desired output in an instant.
A great intelligent document processing solution doesn’t compromise, which is why your business shouldn’t either. Klippa DocHorizon, for instance, makes sure your business has access to all the necessary technology and features that truly innovate document processing.
How to Automatically Process Documents with Klippa DocHorizon
With Klippa DocHorizon, you can create your own workflow, tailoring it to your business needs. Have full control over the automation process and choose what documents you process in just 5 steps:
Step 1: Upload Your Documents
Start by uploading your documents – these could be invoices, receipts, contracts, ID cards, or any other business documents. DocHorizon allows you to upload files via multiple input channels, such as email inbox forwarding, direct API integration, cloud storage, ERP or accounting systems, and many more!
Step 2: Automatically Extract the Data
Once uploaded, Klippa’s AI-powered OCR engine instantly reads and extracts key fields from your documents, including invoice numbers, dates, totals, product line items, and personal or company details (e.g., names, addresses, VAT numbers).
Step 3: Validate and Enrich the Extracted Data
DocHorizon verifies documents for errors and improves data accuracy by performing two-way or three-way matching, detecting duplicates and anomalies, and enriching data by cross-referencing with internal systems or external sources. If you need extra precision, enable human-in-the-loop verification to manually check flagged cases or sensitive documents.
Step 4: Apply Compliance and Security Measures
Before data is routed to its final destination, DocHorizon applies built-in compliance and data protection features like GDPR-compliant anonymization of personal data, fraud detection algorithms, and data masking for sensitive fields. This way, it’s easy to comply with regulations like GDPR, HIPAA, and ISO 27001.
Step 5: Export and Forward the Structured Data
Processed and validated data is then converted and exported in your preferred format, such as JSON, XML, CSV, XLSX, or TXT, and then you can route this data to your ERP systems, accounting software, CRMs, or workflow automation tools.
Curious to try it out? To get started, you can book a demo to see how our solution works or sign up for the platform to test our document processing solution.
Automate any document processing workflow
Reduce operational costs. Save valuable time. Prevent fraud.
What types of documents can be processed automatically?
Automated document processing systems can handle a wide range of documents, including invoices, receipts, contracts, identity documents, and more. These systems are designed to extract and process data from both structured and unstructured documents.
How does automated document processing handle handwritten text?
Advanced systems utilize Intelligent Character Recognition (ICR) to interpret and extract handwritten information. This technology complements OCR (Optical Character Recognition) by focusing on handwritten inputs, enhancing the system’s ability to process diverse document types.
Does Klippa support multi-language document processing?
Yes, Klippa’s platform is capable of processing documents in multiple languages, making it suitable for international operations and diverse linguistic requirements.
How does Klippa ensure data privacy and compliance?
Klippa adheres to strict data protection standards, including GDPR and ISO certifications, ensuring that all processed data is handled securely and in compliance with relevant regulations.
