Can your software handle supplier invoice OCR?

Your current software can handle supplier invoice OCR if it extracts the right fields, shows the reviewer the original and sends the approved data to the correct company file. A connector, a ready-made link between two tools, can help when the missing step is the transfer. I use a custom workflow when a check or transfer rule falls outside what those tools can do.

Imagine a construction company that receives an invoice for materials, a faint scan and an attachment with a page missing. Follow each invoice until your team reaches the point where it has to step in. If the invoice already reaches the correct company file and someone still has to find the purchase order and delivery note, matching those documents may be the next step to automate.

What steps are involved in reading supplier invoices?

First, the software reads text embedded in a PDF or recognizes letters and numbers in an image. The second method is called optical character recognition, or OCR. Extraction then assigns each value to the right field, such as the invoice number. Approval, posting to the accounts and payment are separate steps.

1. Read the text in the file or recognize the characters visible in a scan.
2. Extract the supplier, invoice number, dates, currency and relevant amounts.
3. Validate the data against the invoice and, where needed, the purchase order or delivery.
4. Post the entry in the accounting system according to your company's rules.
5. Approve and make the payment using the process your team has agreed on.

The software can read an amount correctly and still put it in the wrong field. Pennylane gives the example of an invoice with several amounts, where the first can be mistaken for the total. Pennylane guide to correcting extracted fields.

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What should you check before sending an invoice to accounting?

I keep the original next to the proposed fields. The reviewer needs to confirm the supplier and invoice number, read every page and check the currency, total and due date. Put an incomplete document on hold and record the reason so someone can get the correct copy.

Checks before sending an invoice

Amounts can add up correctly even if every figure is wrong. Doing the math helps spot a mismatch. Comparing the fields with the original catches a misread figure even when the numbers add up.

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What can a test with three fictional invoices show?

Running the same files through two methods shows which details each one can read. One pulls the text stored in the file. The other uses OCR on an image of the page. I check the invoice number, date and total separately, then look at where someone has to step in.

I ran three fictional invoices through two methods locally. The first pulled the text already in the PDF with pypdf. The second converted the page into an image and used Windows text recognition, set to French. Both methods received the same files. The results below apply to these test documents.

I made the poor-quality scan from the readable PDF by turning it into a low-resolution image. The OCR introduced the minus sign. On the third invoice, both methods read the amount before tax and the tax, but the total field stayed blank. I left it blank in the results. The tests covered how the files were read. They stopped before any use of accounting software or transfer of an accounting entry.

Include a hard-to-read document and one that should be put on hold in your own test. For each field, record what the original says, what the tool proposes and any correction. Then ask to see what actually arrives in the receiving software, using a test account with no real posting or payment.

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When should you use a built-in feature, a connector or a custom workflow?

I start with the feature in the software the team already uses. If reading and review work but someone still has to retype data from one tool to another, I check what the connector passes along. A custom workflow can help when a specific step is still missing, such as finding the matching purchase order in another tool and sending discrepancies to the right person.

How to test the three options

Dext documents how it extracts fields such as the invoice number, due date, currency and amounts. Pennylane says the Dext-to-Pennylane connection is available to accounting firms with a Pennylane firm account. Check that you can access the correct account for the invoice as well. These details come from the vendors' help centers. Fields Dext extracts and Pennylane's requirements for the connector.

Identify the missing step before adding a tool. If you're requesting pricing, my guide to automation quotes explains how to specify the tests you want before accepting delivery.

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How do you resume an export without creating a duplicate?

Give each document a tracking reference and record what the receiving tool confirms. After an interruption, look for the reference in the destination account before trying again. If you still can't tell whether the first attempt succeeded, put the invoice on hold so someone can check before retrying.

• Duplicates. Check the company receiving the invoice, the supplier and the invoice number together. Two suppliers can use the same reference.
• Recovery. Keep track of each transfer. Test what happens if the receiving tool gets the document just before a connection drops, before confirmation comes back.
• Permissions. Decide who can view, correct, approve and send invoices. Check that someone without permission to send can't bypass approval.
• Exports. Try retrieving the original file, the approved fields and the relevant history. Check that you can link each invoice to its original.

You should be able to confirm a 'sent' status in the account that receives the invoice. Pennylane advises checking transfer status if a document is in Dext but missing from the Pennylane account. Documentation for connecting Dext and Pennylane.

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Does OCR also apply to electronic invoicing in France?

If an electronic invoice already contains structured data, read that data first. The invoice number, date and total each have a dedicated field. When a scanned document arrives as an image, OCR can recover the visible text.

A supplier invoice covers a purchase your company made. For invoices you send to customers, my other guide explains how to check payment before sending a reminder.

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What should you ask before testing your software?

Watch what the tool does with the documents your team receives and when it asks someone to decide. Test which formats it accepts, which corrections you can make and what happens when a document or field is missing.

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What should you check before choosing?

Follow a small batch of invoices through your current software, from intake to the account where they should land. Note where your team retypes fields, corrects them or waits for confirmation. Those gaps show whether another connection is worth testing.

Three questions to help you decide

To plan an automated workflow across your tools, you can tell me how you handle supplier invoices. For a first conversation, I only need the name of the software, the step your team does by hand and who approves the invoices.