How to extract data from receipts?

As businesses grow, processing numerous receipts becomes challenging. Receipts vary in templates, styles, and formats. Manual data extraction consumes several hours and also the rate of errors is very high. This slows down operations and wastes resources, reducing efficiency. 

Opting for automated data extraction via an Automated Receipt Processing Software offers a solution. It accelerates receipt processing, minimizes errors, and improves efficiency. Upload a receipt and instruct the system to extract it. The system will extract all the data with significant accuracy and this will streamline your workflow, boosting overall productivity.

This blog will help you understand the receipt data extraction process and the advantages of opting for automation. You will also have a step-by-step guide to automate data extraction from scratch.

What is Receipt Data Extraction?

Receipt data extraction involves entering all relevant information from the receipts into the system for additional processing. This can be accomplished manually or through the use of receipt data extraction software or tools.

Document processing of receipts becomes essential as the extracted data from receipts is valuable for accounting, financial analysis, and reporting purposes. Structured data simplifies these tasks. Automated data extraction efficiently gathers information from various receipt formats, whether they are unstructured or semi-structured. Hence, many organizations favor this method for its efficiency and streamlined operations.

Manual Receipt Data Extraction vs Automated Receipt Data Extraction

Manual Receipt Data Extraction

It is manually entering the document’s relevant data into the system. It’s a tedious and time-consuming method. It leads to errors, further complicating receipts’ reconciliation with purchase orders and bank statements. All of these issues result in delays and inaccuracies in financial reporting.

Automated Receipt Data Extraction

Automated receipt data extraction is the process of extracting data from documents using advanced technologies such as Artificial Intelligence (AI), Machine Learning (ML), and Optical Character Recognition (OCR). You can extract data from any document format, including PDFs, emails, and printed copies. This process ensures better accuracy, faster processing, minimal human intervention, and a much lesser scope of errors.

How Does Receipt Data Extraction Software or Tools Work?

Automated data extraction captures information from receipts by leveraging OCR technology. KlearStack is a leading solution for extracting data from receipts. This automated software converts details such as names, dates, and amounts into structured data. It also allows integration of this information into accounting and Enterprise Resource Planning (ERP) systems.

Understanding how Receipt OCR works provides insight into its seamless data extraction process.

Pre-processing

Pre-processing prepares the scanned or photographed receipt image for further analysis. This step includes reducing noise, enhancing the image, and aligning it to ensure clarity and uniformity. These improvements facilitate accurate character recognition and data extraction in later stages.

Document Classification

Document classification determines and categorizes the type of document being processed, such as differentiating a receipt from invoices or purchase orders. Machine learning algorithms are often used to identify patterns and features specific to each document type. Correct classification ensures that the appropriate extraction rules and templates are applied.

Automated Capture & Digitization

Automated capture and digitization is a process where the physical receipt is converted into digital format using OCR technology. The document gets scanned in this process, producing a machine-readable text version. This can further be stored and managed electronically. The digitized data forms the basis for further processing and analysis.

Intelligent Data Extraction and Analysis

Intelligent data extraction is identifying and extracting key information from the digitized format of the receipt. Advanced algorithms and machine learning techniques accurately identify and interpret the information. This extracted data is then analyzed to ensure that it is complete and correct.

Validation & Integration

Validation and integration is a process that ensures that the extracted data is ready and accurate for use in other systems. In this process, the data is verified by cross-checking it with existing databases. It also includes identifying the errors and confirming that the information complies with the predefined rules. After validation, this data is integrated into ERP systems, accounting software, or other relevant systems.

RESTful API Integration

RESTful API (Application Programming Interface) integration allows the receipt OCR system to interact and exchange data with other software applications over the internet. APIs offer a standard method for connecting different systems, enabling smooth integration of OCR capabilities into existing workflows. Because of this, data can be transferred automatically, and the need for human intervention is reduced considerably.

Benefits of Using Automated Data Extraction from Receipts

Cost Reduction

Automated data extraction considerably reduces the need for manual data entry, which leads to lower labor costs. It also eliminates the occurrence of errors to a great extent, which ensures that there are no additional expenditures incurred due to errors. All of this results in financial savings for the organization.

Superior Accuracy and Error Detection

AI and ML algorithms, combined with OCR technology, ensure high accuracy in data extraction. These systems can identify and correct errors more effectively than manual processes, improving the reliability of financial data.

Immediate Data Availability

Automated systems provide real-time access to receipt data, enabling businesses to track financial transactions as they occur. This immediate availability supports better cash flow management and timely financial insights.

Decreased Paperwork and Creation of an Audit Trail

By digitizing receipt data, businesses can significantly reduce the volume of paperwork that is usually required in maintaining receipt databases. This saves physical storage space and creates a comprehensive audit trail for easy retrieval and regulatory compliance. 

System Integration and Enhanced Vendor Relations

Automated receipt extraction tools seamlessly integrate with accounting and Enterprise Resource Planning (ERP) systems. This integration streamlines workflows and enhances communication with vendors, fostering stronger relationships and more efficient supply chain management.

Access to Data Archival

Automated systems have robust data archival options, which allow businesses to store and access historical receipt data whenever they wish to. This ensures long-term data retention and compliance with legal requirements. Document archiving is essential for businesses and it saves the hassle in the future of finding the documents.

Analytical Insights and Data Interpretation

Valuable analytics and insights are provided by automated receipt processing software. Businesses get a better understanding of their financial health by analyzing transaction patterns and trends. This analysis can further help companies to identify opportunities for cost savings and efficiency improvements.

Security and Compliance

Advanced automated systems come with built-in security features to protect sensitive financial data. Compliance with industry standards and regulations is easier to achieve, as automated tools ensure consistent and accurate data handling.

Scalable Business Operations Without Additional Hiring

As businesses grow, automated data extraction systems can scale to handle increasing volumes of receipts without the need for additional staff. This scalability supports business expansion while maintaining efficient and accurate financial operations.

Step-by-Step Guide to Extract Data from Receipts Using KlearStack

Features of KlearStack’s Receipts OCR

Template-less Solution

KlearStack’s Receipt OCR provides a template-less solution. It can extract data from any new receipt layout without needing model retraining. Also, it can handle various receipt designs, adapting to new formats as required. This saves time and resources that would otherwise be spent on manual template creation.

Multi-lingual Support

KlearStack supports data extraction in 50 languages, including English, Hindi, Marathi, French, German, Chinese, Japanese, and more. This feature is essential for businesses operating in different locations and countries. It ensures the language barrier is reduced when it comes to accurate processing of the receipts.

Bulk Receipt Processing: 

With the batch processing feature of KlearStack’s Receipt OCR, multiple receipts can be processed at once. Because of this the speed of the process increases and it becomes possible to handle high volumes of receipts with improved efficiency.

Line-item Data Extraction: 

Lime-item data extraction allows all the vital line items to be accurately extracted in detail from the receipts. These items include product descriptions, quantities, unit prices, total amounts, etc. This detailed data extraction is important for making sure that there are no discrepancies between the goods received and the amount paid.

Multi-page Data Extraction: 

KlearStack’s Receipt OCR is compatible with multi-page receipts, ensuring that data is extracted with precision across all pages. This capability is particularly important for those transaction which have extensive itemized lists, ensuring that no critical information is overlooked.

Straight-through Processing (STP)

STP automates the entire receipt processing workflow, enhancing speed and cost-effectiveness. With STP, receipts can be processed from capture to payment without manual intervention, ensuring faster turnaround times and reducing error risk. This automation leads to more efficient financial operations and better cash flow management.

Seamless Integration

Due to the integration, extracted data directly flows into the financial management system. This ensures a reduced need for manual data entry, better business productivity, and more accuracy.

Document Classification: 

In this feature, document gets automatically categorized based on their content. It is trained in such a way that it identifies the documents as purchase orders, invoices, receipts, or other relevant categories. This helps to route documents to the appropriate departments for further processing.

Automated Document splitting:

This feature provides to separate a receipt from other documents that may be attached to it such as an invoice or purchase order. This is useful for tasks like document categorization, where the content on each page needs to be analyzed independently. 

Rich Document Audit Engine: 

In KlearStack’s feature audit engine, you can set up rules that the extracted data should comply with. All the extracted data will then be validated against these rules and if any discrepancies are found it will be flagged for review.

Rules-based workflows: 

Here you can define rules for various documents based on different criteria such as their total value, name of the supplier, or any such other. Based on these rules your document will be processed ahead and information will be sent to the particular team or members as per the rules workflow.

Self-learning AI:

Self-learning AI continuously keeps learning and adapting, which eliminates the need for programming and training. This continuous process of learning makes it possible to get better results over time, even from documents that are poorly formatted.

Schedule a demo with us to know more!

KlearStack offers an easy and efficient solution for your receipt data extraction needs. It ensures precise extraction of all your data, categorizing it appropriately for further use. Upload receipts in any format, whether semi-structured or unstructured and take advantage of KlearStack’s support for over 50 languages. Our expertly trained models will extract your data seamlessly.

Curious about how KlearStack achieves this? We invite you to test our system in a demo with any receipt format, structured or unstructured, and experience KlearStack’s exceptional information processing capabilities. Simplify data extraction from documents with ease. Yes, we’re ready to undertake this blind test.

Frequently Asked Questions (FAQs)