Any business relies heavily on its Accounts Payable (AP) and Accounts Receivable (AR) departments to maintain meticulous records of every transaction, invoice, purchase order, and other documents. As companies grow, they often deal with 1000s of suppliers and customers, leading to the need to process thousands of supplier invoices, customer purchase orders, and other supporting financial documents. OCR helps in automating document processing but which OCR to choose, Template-based OCR vs AI-based OCR.
In this blog, we will look into 2 approaches for OCR i.e. Template-based OCR & AI-based OCR or Template-less OCR.
What is Template-based OCR?
Template-based OCR (Optical Character Recognition) is a method of extracting text and data from documents by using predefined templates.
These templates are designed to recognize specific fields and areas of a document, such as dates, names, invoice numbers, and other structured information. Each template corresponds to a particular document layout, meaning that the OCR system knows exactly where to look for data based on the document type.
Pros of Template-based OCR
- High Accuracy only for Standardized documents or Template-based documents
- Faster Implementation due to limited range of documents
- Cost-Effective for small scale business use
Cons of Template-based OCR
- Limited Flexibility [It struggles whenever there is a variation of document format]
- Time-Consuming Setup for multiple document formats
- Less Scalable
- Prone to mistakes as there is NO audit engine or rule engine
What is AI-Based OCR or Template-less OCR?
AI-Based OCR, also known as Template-less OCR, is a more advanced form of data extraction that uses artificial intelligence(AI) and machine learning(ML) algorithms to recognize and extract data from documents without relying on predefined templates.
Unlike template-based systems, AI-based OCR can adapt to different document layouts and formats easily. It identifies relevant data points based on context and content rather than fixed positions.
If you are looking to reduce your manual efforts then AI-based OCR is the best choice!
Pros of AI-based OCR or Template-less OCR
- High Flexibility, High Scalability for varied documents
- Reduced Manual Efforts
- Reduced Setup and Maintenance
- Improved Accuracy over time
Cons of AI-based OCR or Template-less OCR
- Higher Initial Costs
- Bit of Complexity in Initial Implementation
AI-based OCR vs Template-based OCR
AI-based OCR uses Intelligent OCR Technology to process documents. Intelligent OCR technology helps in processing invoices, bills, purchase orders, and all the documents with more accuracy and ease. Use AI-based OCR in your organization to reduce the manual efforts, increase operational efficiency and eventually reduce costs.
Now, after being convinced for AI-based OCR, you might be stuck in selecting the best AI-based OCR tool. Let’s make it easy for you!
Which is the best AI-based OCR tool?
KlearStack is the best AI-based OCR tool, with template-less solution for automating data extraction. KlearStack handles free-form invoices, avoiding common automation issues, cutting costs, and boosting your AP team’s productivity.
With KlearStack, there’s no need for templates or Regex. Using OCR, deep learning, and AI, it scans and recognizes text dynamically, ensuring accurate and fast information retrieval, regardless of typeface or text style.
Let’s have an in-depth look at each and every feature of KlearStack.
Bring your invoices and documents in the KlearStack Demo call and let’s take an accuracy test. Book KlearStack Demo today!
Conclusion:
It’s high time that organizations across all domains and irrespective of the organization size should adopt such AI-based template-less invoice extraction OCR solutions. These tools reduces the wastage of resources and leakages in the cash-flow.
