These days, more and more business information and dealings are conducted online. Likewise, digital forms such as PDFs, emails, and photos of scanned documents are gradually replacing their paper predecessors. Invoice scanning refers to a wide variety of processes through which paper invoices may be digitised and their contents extracted.

Invoice scanning is often accomplished using invoice data capture technologies instead of traditional hardware scanners. How companies process and authenticate invoices with the help of invoice scanners is a prime example of the impact of the digital revolution (also receipt scanners).

What is an Invoice Scanner?

An invoice scanner is a software that reads invoices and extracts the relevant information, presenting it in a format that computers can read. When used with automated procedures, it allows for information to be sent without any hitches.

According to the study of Data Semantics, the use of Intelligent Document Processing Tools can reduce the risk of errors by 52% or more. Now, you can imagine the need and importance of invoice scanning software.

Accounts payable automation relies heavily on the efficiency and convenience of automated invoice scanning. It improves efficiency by doing away with time-consuming manual data input and accelerating the transfer of invoice information to an enterprise resource planning (ERP) or accounting system.

What is an Invoice Scanning?

The term “invoice scanning” describes collecting and retrieving invoice data ( such as the number of invoices, date of invoice, the total amount of invoices, the name of the vendor, barcodes and QR data, etc.) for use in subsequent business operations.

Optical character recognition (OCR) capabilities are often included in invoice scanning software to facilitate the extraction of data from invoices for import into an accounting system. While this may seem promising on the surface, there are many reasons why invoice scanning is only so useful for organisations.

The following is a typical sequence of events:

  • Put the invoices you need to scan into the invoice scanner.
  • After that, the invoice scanner will extract the pertinent data based on the guidelines set out by your company.
  • After that, the information is provided in the form of a structured output that is usable by machines (CSV, JSON, DOC)
  • Afterwards, the ERP software may take this information and use it for other tasks.

Why Do Small Business Owners Use Invoice Scanning Software?

The process of digitalizing the workplace is making progress toward achieving its goals. Paper file cabinets, which used to take up valuable office space and had the dimensions of a small warehouse, are no longer in use. Those days are gone.

Printing papers for use in business has become more of an exception than the norm, given the widespread digitization that has taken place in corporate operations in recent years.

In today’s world, most incoming bills are received in digital format (PDF, scanned image, picture, email, etc.). Even though this already simplifies the business process and eliminates the need for physical storage space, a significant challenge remains: how to use the invoice data concealed inside them. And how can essential data be easily accessed in invoices so that it may be moved to the appropriate location?

This is where the automated invoice capture software that automates the capture of invoices comes into play. Each invoice contains essential data required for resourcing, accounting, planning, and business intelligence. These systems cannot function properly without key invoice data. The information that is only accessible via invoices has to be moved into Accounting software or ERP, or data analytics systems.

Upgrade Your Small Business with Digital Invoicing

Moon Invoice helps small businesses to upgrade their invoicing by offering advanced invoicing module with other features like estimates, POs, and credit notes.

Start Your Trial Today!

An Invoice Processing Software, also known as Invoice Scanning Software or Invoice Recognition Software, is an automated data input solution suited to the use case of invoices. Other names for this software are Invoice Capture Software and Invoice Scanning Software.

It does its best to identify all important data fields in your invoices and then delivers structured data that is simple to work with. After the data from your PDF invoices has been translated into something comparable to an Excel spreadsheet, you will have no trouble using it in other apps. The days of manual data entry into your system by rekeying it from PDF are behind you.

Invoice Scanning is crucial to record crucial information. The whole accounts payable process may be digitised and automated for organisations. Optical character recognition (OCR) and similar technologies eliminate the need for human data entry.

After collecting vendor information digitally may be stored and used to automate the billing process. This encompasses everything from receiving the invoice to approving it and sending it out to be paid.

Benefits and Limitations of Automated Invoice Scanning

Automated invoice processing, like any other business solution, comes with advantages and drawbacks, much like any other business solution.

Paper-based systems and manual AP workflows may be replaced with invoice scanning software, which can boost productivity and improve how your company processes invoices.

Invoice scanning technologies, such as OCR and capture technology, may minimise the amount of human data input required, saving time and freeing up your accounts payable personnel to concentrate on higher-value duties for your business.

Benefits of Automated Invoice Scanning

Considering these benefits and limitations might assist companies in determining whether or not invoice scanning is a viable option for their internal procedures.

Savings in Time

When you and your business get free from paper based invoices – you save a lot of time and reduction in the amount of time spent processing invoices from days to only minutes, which may result in early payment discounts.

It helps to Extract Information

When there are hundreds or thousands of unique invoice layouts, it is impossible to train a computer system for each layout; therefore, an alternative technique must be used to have a scanned invoice.

Instead of using software based on OCR technology m using invoice capture software benefits based on the position of the data points, intelligent filters may be used to detect certain data fields in changeable locations.

These filters function by locating items, such as numbers, and then looking in the surrounding area for common keyword combinations. For instance, the phrase “Total Due” followed by a monetary value would be deemed the total of the invoice.

The technique of extracting information using keywords works well for most of the available fields, including the totals (net, tax, and total), the invoice date, and the number.

On the other hand, the extraction of line items that are provided in a table could be more reliable. This is because line item tables may be found in various forms and can store several kinds of data.

Higher Productivity

You need to agree that once a lot of time is saved from manual data entry and data extraction -accounts payable staff can now focus their efforts on activities that are more essential to the company.

When you receive a lot of recurring invoices from a select group of suppliers, vendors, etc.

Many companies’ suppliers are responsible for producing the vast bulk of their company’s invoices. There are circumstances where a small number of suppliers might result in a firm receiving hundreds of monthly invoices. This is particularly true for, online retailers, rick-and-mortar enterprises, the food sector, and wholesale and distribution firms.

If you are the owner of a company that generates hundreds of invoices on a recurring basis, automated invoice processing and invoice scanner are fantastic options that can help you optimise your workflow. It is easy to instruct invoice automation software that processes invoices, to reliably detect and extract data fields from a document format that is already familiar to it.

When an invoice’s format is established, it is possible to use methods such as OCR technology and keyword-based pattern matching, which lead to accurate and trustworthy parsing results. This technique of an invoice scanner makes extensive use of the geographical position of the data points included inside the documents.

Training an invoice OCR software entails you designating where the essential data fields are anticipated to be found.

Using this approach may also make retrieving line items from invoices feasible. This indicates that in addition to retrieving information like the invoice date, invoice number, and totals, you may also have specific data about the item included in an invoice. This is particularly relevant when you want to conduct sophisticated number crunching or input data with finer granularity into an enterprise resource planning system.

Scalability & Data Security

Once you are into automation solutions related to invoices and several other processes that are scalable and capable of swiftly accommodating increasing amounts of data, this software is highly secured, and you don’t have to worry about the data.

Fewer Errors in Work

Superior precision and throughput in contrast to manual procedures and far fewer mistakes. Collecting data from receipts and purchase orders makes it possible to automate verifications such as three-way matching.

Limitations of Automated Invoice Scanning

  • Invoice data extraction from tables and line items is unsatisfactory
  • Accuracy is not one hundred percent.
  • Unable to detect unidentified invoice forms
  • Data restrictions such as handwritten writing, blurred/unclear scans, low-resolution photos, unrecognizable/illegible typefaces, and skewed text may impact performance and accuracy.
  • Can’t collect unstructured data

Are There Alternatives to Automated Invoice Scanning?

Over three decades ago, a standard known as Electronic Data Interchange (EDI) was developed to solve the problems associated with AP automation and scanning invoices. The concept behind it was straightforward: rather than exchanging bills in a format understandable by humans, transactional data would be exchanged automatically from business A to company B in a format readable by machines.

When machines are allowed to communicate with one another directly, the need for human input in the form of manual validation or typing is removed. Although Electronic Data Interchange (EDI) succeeded in bigger companies, most small and medium-sized enterprises (SMEs) still get invoices in paper or PDF format. These businesses are searching urgently for alternatives to EDI.


Regarding handling invoices, invoice scanning enables businesses to advance towards accounts payable automation and simplify procedures. Automating a procedure that would otherwise require manually entering information into a system helps cut down on mistakes and boosts the overall productivity of the process of generating invoices throughout their lifespan.

Many automatic invoice scanners and even some of the older OCR programmes have the above mentioned drawbacks. The latest invoice automation solutions have used artificial intelligence and machine learning to lessen these drawbacks’ impact significantly.

These days, invoice scanners don’t rely on predefined templates. Document processing solutions with the ability to “learn” and improve their accuracy are now available.

Modern invoice scanner can function with fewer data because of advancements in Artificial Intelligence, Machine Learning, and Deep Learning. This makes it easy for them to deal with typical data restrictions, unidentified papers, and disorganised billing information.

Modern invoice scanners use constantly learning algorithms to address accuracy issues. Whenever new information is processed in the workflows, the invoice scanning algorithms retrain themselves.

You can easily extract tabular data and granular information around line items using advanced invoice scanners that use AI and OCR. Many online and open-source options exist, and this is especially true for table extraction.

In addition to these developments, contemporary invoice scanners have “data validation” interfaces as standard features. When an error is detected, the AP team may swiftly check the data and make sure it’s accurate. User-defined validation criteria that might raise warnings and alert users to possible errors are also available in invoice collection tools like Nanonets.