How to Use OCR for Invoice Processing
OCR (Optical Character Recognition) is the technology that converts invoice images into text. This guide explains how OCR works for invoice processing, the difference between basic OCR and AI-enhanced extraction, and when each approach is appropriate.
How OCR works for invoice documents
OCR for invoice processing involves three steps. First, image preprocessing: the scan is enhanced, deskewed, and binarised for optimal character recognition. Second, character recognition: each character on the page is identified by comparing its shape to a trained character database. Third, layout analysis: characters are grouped into words, words into lines, and lines into blocks to reconstruct the document structure.
For invoices, layout analysis is critical: it must preserve the column structure of line item tables so each cell value is associated with the correct column.