Invoice and receipt data entry is arguably one of the most time-consuming and costly business processes. Making sure data entry is as efficient as possible is crucial to optimising bookkeeping workflows, especially for companies who handle a large volume of documents.
Why companies need bookkeeping data entry services
Today, companies produce and receive a high volume of sales documents that, in most cases, aren’t always the same file format or list of elements. Typical documents include invoices, receipts, Purchase Orders, bank statements, etc., many of which must be recorded in the chart of accounts.
According to the Billentis E-invoicing Report for 2018, as many as 60-80% of invoices in Western Europe are issued on paper. And The Huffington Post reported that more than 11 billion receipts are printed in the UK each year.
Even if invoices are issued electronically, there aren’t many standards for what to include on these invoices, excluding EU VAT invoicing regulations. Consequently, these documents vary greatly depending on the country, or company, standards.
At the same time, human error in data entry is among the major causes of accounting issues. A Bloomberg study reported that as many as 27.5% of companies have incorrect data manually input into their systems, causing tax and accounting mistakes.
All these reasons make invoice and receipt data entry one of the business fields most in need of improvement.
- Manual data entry
Copying texts manually is a centuries-old practice, and one that is even today surprisingly common.
One of the reasons why data entry is not widely automated is simplicity—manual keying in data is a process that requires little effort to implement.
Another factor to consider is security for company documents. Employing an in-house manual keying team means that company invoices never leave the office to be processed.
Average typing speed for a professional typist is around 50-80 words per minute. However, today it may be difficult for companies to recruit data entry specialists and you may expect a high staff turnover for these roles. Accountants are expected to provide proactive business advice, and thus may be reluctant to spend the majority of their time rewriting texts from invoices.
Handling manual data entry works fine for companies who deal with few documents, and have employees specifically devoted to it. However, for a large volume of documents, automatic data capture may be a better fit.
- Automated data entry
Establishing an automated workflow for data entry requires an OCR software to extract data from documents. The level of automation depends on the accuracy of the OCR solution which may either return raw text captured from a file, or pre-selected elements required for bookkeeping purposes. The second option is, of course, the most desired as it requires the smallest amount of manual verification.
The most sophisticated solutions can analyse OCRed text in order to locate and return all elements required for bookkeeping purposes, including company details, dates, and amounts. It can be achieved by using a combination of techniques based on regexp rules, patterns, or algorithms, that adds weight to extracted keywords. When the scan is high quality, invoice data can be extracted in seconds using fully automated data capture.
Automated data entry is a perfect solution for companies who handle a lot of invoices and receipts. A good example is a cloud accounting solution that can offer clients a way to speed up how they record expense-related files. Another example is a company that deals with a lot of invoices and receipts internally, such as travel expenses.
The main worry for some businesses is security, given that documents are forwarded to an external company for extraction and verification. This can be solved by installing an on-premise data extraction service.
Technology can make data entry more efficient
Manual keying is still a viable option. Especially when there is only a small volume of documents to process.
However, it makes sense to look for an alternative. While fully automating all data entry may seem unlikely, with today’s technological advancements, and techniques to analyse OCRed content, it’s definitely worth a try.
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