Document Capture in 2023: What it is & How it works (2023)

Most documents are not immediately machine-processable. Although template-based tools try to extract data from documents automatically, templates allow limited automation. Thus, document capture vendors started to build machine learning models using many sample documents for the last few years. As a result, these models can extract data from documents with high accuracy, and businesses can adopt this technology to many of their processes.

What is document capture?

Document capture is the process of scanning hard copy documents and capturing unstructured forms of electronic content to retrieve and turn the data into actionable information that serves a particular business function or intent. The process involves scanning or document imaging where the essential information that you need to capture is collected, categorized, processed, handled, and placed into databases. Wikipedia defines document capture tools as:

Applications that provide the ability and feature set to automate the process of scanning paper documents or importing electronic documents, often to feed advanced document classification and data collection processes.

How does it work?

Document capture is one of the main capabilities of document management systems. While documents constitute a critical part of business processes, document capture is the first step to manage the information in these documents effectively. Here is how a document capture tool works step by step:

1. Documents are imported to document capture software.
2. Document capture software transforms tevxt into a readable format. To enhance the image quality, it de-skews and cleans the image.
3. The software analyzes the document, whether it passes predefined tolerance levels. If a document fails, the software will automatically forward it for manual verification and correction. For example, blurred characters or missing fields in the document might cause this situation.
4. The software reads and filters documents automatically, based on their forms, like purchase orders, bills of lading, receipts, and more. While doing that, the unstructured data in documents are converted to structured data. With machine learning algorithms, document capture tools can improve themselves for accurate classification of input documents.
5. Metadata within documents is identified, and the software makes it possible to find documents by metadata through database searches.
6. Captured and validated records are transferred to the archive. Documents can also be used in automated workflows at this level.
7. If needed, the captured data can be processed for further tasks like document generation.

You can read more about this in our document automation guide.

Which processes involve document capture?

We listed the main processes and the documents involved in those processes.

Finance operations

Accounts Payable (A/P) or Procure-to-Pay (P2): Purchase orders, Invoices

Accounts payable processing is one of the most significant back-office operations in almost every organization. Document capture tools can provide invoice automation and process invoice data, including line item information, delivery dates, shipping costs, and discounts.

An aspect that facilitates invoice processing is the Purchase Order (PO) number. Using the PO number, a company can identify the order which includes all the relevant details about the order such as the supplier data and the ordered items.

While non-PO invoices are harder to be automated, these tools can also automate the posting of non-PO invoices. To learn more about accounts payable automation, you can also read our in-depth guide.

Order Management or Order to Cash: Offers, Order forms

Order management departments use a wide range of documents to carry out their activities. While handling different types of documents manually causes mistakes and prolong processes, document capture tools can rapidly extract accurate data and classify different document types accurately. If these teams need to look up historical transactions, document capture tools keep related information in the company database.

Auditing & Tax Compliance: Invoices, Tax Statements

VAT compliance of supplier invoices needs to be audited. It is one of the top priority agenda items, especially for complex international businesses. To identify risks in real-time and identify compliance issues, companies can benefit from document capture tools. With deep learning algorithms, these tools also enable automated checks of all documents and statements related to auditing and tax compliance.

Feel free to read more in our finance automation guide.

HR Operations

CV Screening

Especially for big companies, this process takes too much time, and HR teams can miss out on some highly skilled applicants. Human resources departments can use document capture tools for automated CV screening and accelerate their recruitment processes significantly.

You can read more about it from our in-depth guide.

Travel Expense Management (T&E): Receipts

Expense reports include checks on travel receipts for compliance with company expense requirements (like business class flights), VAT deduction regulations, and income tax legislation. However, travel expense management is a highly manual process in most companies, and it also carries compliance risks regarding fraud, VAT, and payroll taxation. With document capture tools, businesses can monitor these expenses by collecting travel receipts and check if they conform to related regulations.

Industry-specific Processes

Loan Applications: Application forms, Payslips, W2, etc.

Processing loan applications require manual checks of applicant information. As in all processes, this is open to errors and takes significant time. Document capture tools can provide automated examinations of payslips and bank statements of applicants to accelerate the processes.

Same applies for mortgage application forms processing. Considering that an mortgage file size can be ~500 pages, using document capture tools would have critical impact in these processes.

Claims Processing: Invoices, Medical records, etc.

Claims processing means an insurance company’s procedure of receiving insurer’s claim requests, checking them for adequate information, validating them, and acting accordingly. Especially while checking, going through all related invoices, medical records, and reports can take a long time. Using document capture tools can automate and accelerate these processes without any errors.

Record Retrieval for Legal Processes: Invoices, Medical records, etc.

Document capture tools can be useful to receive necessary records for legal contract generation. When creating legal documents, for example, for claims processing, collecting all related information from medical records, insurance reports, or receipts is a tiring task. Document capture tools can automate these processes and provide faster and errorless record retrieval.

Medical Prescription Processing: Prescriptions

In healthcare services, medical prescription processing is a critical process to capture doctor, patient, and pharmaceutical information. Document capture tools provide standardized and automated prescriptions for both doctors and patients, enabling reduction in errors and process times.

What are the main benefits?

The integration of a document capture tool would provide companies exponential benefits, including significantly improving the efficiency of document-based operations and reducing costs while improving process quality. A document capture tool can offer the following benefits to your business:

Faster processes

Manual processes take more time and are prone to errors. Using a document capture tool would help businesses to speed up these processes, and they can capture more data at the same amount of time. According to Kofax, Upromise can now process 22000 transactions per day, which is approximately 73 times more than previously, thanks to its document capture software.

Reduced costs

The US federal government uses more than 110,000 tons of paper annually. The cost of filing a single paper document is $20 while searching for a misfiled document costs $120, and reproducing a lost document is estimated to cost $220. This means the total cost of printing, copying, processing, and shipping is ten times the original purchase price of the document itself. While document capture tools can eliminate misfiled documents, it can also cut your company expenses significantly.

Reduced errors

Most companies still rely on their staff to manually enter the information contained in the documents in their systems. This situation results in errors due to incomplete data, missing/correct material, and duplicates. By using document capture tools, the relevant data obtained will contain fewer errors, which help the business reports to be more reliable.

Improved employee satisfaction

While companies will face a fourfold increase in the volume of incoming business information by 2021, according to a recent study by AIIM, manual data capture is a tiresome activity for employees. While this routine does not require any high-level expertise, it also demotivates workers. Document capture tools will save workers from this demotivating role and allow them to focus on their fundamental duties. This also increases their productivity by reducing distractions.

Improved security

Companies that perform their processes in paper form have lower visibility as it is more difficult to monitor these processes. Lower visibility makes these companies more vulnerable to fraudulent acts. By using document capture tools and digitization of data, businesses will have more secure and visible processes. They can reduce the risk of internal or supplier fraud to protect the client.

Better decision making

Document capture tools help users to retrieve useful information contained within unstructured data sources and transfer them to databases. Businesses can use captured data to make accurate analyses for better, data-driven decision making.

If you want to read more about document capture, these articles can also interest you:

• Data Extraction: In-depth guide for business users
• Optical Character Recognition (OCR): In-depth Guide
• Document Automation Guide for Businesses
• Invoice Capture: Guide to most firm’s first AI purchase

If you are ready to get started with document capture, we listed the top document capture vendors in a data driven, prioritized list.

If you have questions on document capture tools, feel free to contact us:

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