Narrowing Costs for Invoice Data Extraction via Automation
As reported by Billentis, in 2019 alone, the amount of invoices generated throughout the globe were approximately 550 billion in volume. Out of this, only 55 billion were paperless which meant the remaining 90% required some level of manual intervention.
Invoice data extraction is a common denominator between processing and approving invoices in logistics. It is essentially done to maintain healthy financial transactions and records, therefore, making it necessary for organizations to focus on it. While the weight of invoice extraction trumps multiple other ongoing processes, industries like logistics today are still seeking cost-effective ways to automate data extraction and verification of invoices.
Manual Invoice Extraction
Manual invoice extraction is the task of extracting data from an invoice with the help of a human data-entry operator. The operator would scan the entire invoice, pull out usable data, verify it with the existing database, and make entries into the final ledger for record keeping and further processing.
Why are Industries like Logistics Moving to Invoice Extraction Automation?
Any document including invoices comes from different geographies which includes multiple types such as commercial invoice, pro forma invoice, credit invoice, etc. It is especially the case with logistics.
It gives rise to multiple challenges of processing (data extraction and verification) different fonts, multiple formats, varied structures, tabular data, and even custom data entries, all at the same time. It makes the data to be processed a lot less discernible because it is unstructured. It is for the same reason, traditional data extraction systems can’t tackle these challenges as they don’t have the capacity to distinguish data like humans. On the contrary, with modern-day cognitive platforms like intelligent document processing, it is achievable and can be automated.
Why is the Cost of Invoice Extraction such a Big Issue?
Invoice extraction is a critical part that helps accounts payable to function properly. Accounts payable requires data from invoices at each level to further process payments and save money with timely operations. However, it is not the only task that needs attention. It leads multiple companies dealing with heavy document processing to outsource invoice extraction to a third party or hire a dedicated team of data-entry specialists.
As per a 2020 report by the U.S. Bureau of labor statistics, hourly wages of a data entry operator ranges from $11.77 to $24.25 for multiple industries including logistics. Also, the wage rate varies depending upon the state. For example, New York’s average hourly rate is $19.40 while it is $18.98 for New Jersey.
Even for organizations that hire freelancers, the cost of hiring a data-entry specialist can range from $10-$20 per hour (as suggested by Upwork).
If we aggregate the entire cost of hiring a data entry operator, the annual cost for a single employee can range from $26,000 to $50,000 annually. It means a team of ten data-entry specialists will cost between $260k to $500K annually.
The entire cost of running this operation is a lot higher than deploying an automation solution that can take up the entire invoice data extraction and verification work. It ends up creating an alarming situation for organizations that are heavily reliant on document processing.
Want to learn about different cost associated with invoice extraction, possible solutions, and how can VisionERA IDP help, click on the link to the original article below.