Document processing refers to the automated conversion of unstructured or semi-structured business documents into structured, usable data. It uses technologies such as OCR, machine learning, and integration platforms to extract data from documents (like invoices, contracts, and forms) and integrate it into databases and applications.
Traditionally, employees process documents manually, but the cost of inefficiency is pushing an increasing number of businesses to adopt automation. After all, no one likes to type data for hours and then deal with delays in workflows.
Modern document processing helps you eliminate manual work, improve accuracy, and streamline workflows. In this guide, you’ll learn how document processing works, the technologies that power it, its key benefits, how to choose the right solution, and how you can streamline your workflows by implementing it.
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What Is Document Processing?
Document processing is the automated method of extracting, organizing, validating, and transferring data from business documents into structured systems. It converts unstructured or semi-structured documents, from PDF to scanned images, emails, and forms, into structured data.
Instead of manually typing information into spreadsheets or business applications, document processing software captures key data points (like invoice numbers, customer details, totals, or shipment IDs) and sends them directly to systems such as CRMs, ERPs, accounting platforms, or databases.
How does document processing work?
Document processing solutions generally follow this process:
- Pre-processing. The solution applies techniques like cropping, noise reduction, and deskewing to improve the quality of documents before their processing starts.
- Data classification. Documents are classified by type or structure based on patterns and contents.
- Data extraction. The solution uses OCR, ICR (Intelligent Character Recognition), and other technologies to extract data according to the rules set by the user.
- Data validation. RPA bots check and validate the processed data. Any unvalidated data is sent to a human user for review.
- Data storage and integration. The validated data is stored within the solution and integrated with downstream applications.
What documents can you process?
You can process virtually any document that is received or created routinely, whether it’s structured or not. For example, you can process invoices, contact forms, bank statements, bills of lading, loan applications, and a whole lot more.
What are the technologies used in document processing?
Document processing relies on several technologies to convert documents into structured data. Let’s take a brief look at the most commonly used technologies:
- OCR (Optical Character Recognition): OCR scans documents to identify text in scanned documents or images and convert it into machine-readable data. To learn more, read our blog post “What is OCR?”.
- ICR (Intelligent Character Recognition): ICR is a more advanced version of OCR that can identify handwritten characters with higher precision.
- RPA (Robotic Process Automation): RPA refers to the use of bots to perform repetitive tasks, specifically the extraction of data from documents with similar structure according to pre-set rules.
- ML (Machine Learning): a branch of AI that aims to imitate human intelligence. Simply put, algorithms are trained to independently improve their ability to execute tasks based on data. Machine Learning has broad applications, like chatbots and YouTube video recommendations, and is used in OCR as well.
- NLP (Natural Language Processing): a subset of Machine Learning that analyzes language to understand its meaning and derive insights.
The ongoing evolution of AI technologies has given rise to a new form of document processing: intelligent document processing.
What is intelligent document processing?
Intelligent document processing, or IDP for short, refers to the implementation of AI technologies to enhance document processing. IDP can extract data from documents, whether structured or not, with higher accuracy and speed.
But that’s not all. IDP can also:
- Understand context
- Learn from patterns
- Handle documents with varying layouts
- Process low-quality scans
- Recognize handwritten text
- Classify documents
Further reading: A Complete Guide to Intelligent Document Processing
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What Are The Benefits of Document Processing?
Document processing saves time and resources, reduces errors, streamlines workflows, enables scalable growth, and improves security and compliance.
1. Save time
Document processing eliminates manual data entry. Instead of typing information into spreadsheets or business apps, data is automatically extracted and sent where it belongs. Employees can reclaim several if not dozens of hours per week and dedicate them to higher-value work.
2. Save costs
Take a little bit of time to calculate the potential ROI of automating your document processing workflows. Multiply the hourly cost of processing a document by the total weekly or monthly hours spent on that task across your company, and chances are you will get a pretty large figure. Automation helps you significantly reduce that cost.
3. Improve data accuracy
Manual processing leads to human error, especially at high volumes. Automation, on the other hand, is proven to reduce mistakes and improve data accuracy. This means your business won’t incur extra costs from errors or make decisions based on incorrect information.
4. Streamline workflows
Smooth processes are critical in industries like healthcare, finance, and logistics. Document processing removes bottlenecks by seamlessly moving data from documents to systems. Teams access accurate information faster, processes involve fewer steps, and operations move more efficiently, thus giving a competitive edge to your company.
5. Scale easier
Automation allows businesses to handle higher document volumes without hiring additional staff. As workloads increase, the automated system processes more data without slowing operations.
6. Improve security and compliance
Processed data is stored in secure databases accessible to only authorized personnel. This protects sensitive information from unintended exposure and lowers the risk of fraud.
Furthermore, the higher data accuracy allows for better regulatory reporting and better compliance. Audits will be much less stressful and you will avoid fines and lawsuits.
How to Choose the Right Document Processing Software for Your Business
Choosing the right document processing software for your business is key to realizing the benefits we’ve just discussed. You should review capabilities, usability, integrations, security, and pricing to ensure accurate and efficient data workflows.
1. Processing capabilities
Choose a solution that accurately extracts data from typed or handwritten documents, including low-quality scans. Make sure its features match your use cases and that support is available to help you with specific requests.
2. Ease of Use
It’s essential that your software solution is user-friendly and ideally code-free. Plus, users should be able to start processing documents right quickly. Web-based solutions are great for this, as opposed to desktop software that every user must download and install on their computer.
3. Integration options
Your document processing software should integrate with your business systems, allowing processed data to flow automatically to cloud apps. Additionally, your solution should also make it easy to download your data as a file in formats like Excel or XML. Docparser excels in this regard, as it supports 1,500+ integrations, including Google Sheets, Zapier, and Microsoft Power Automate.
4. Security
It’s perfectly reasonable to be concerned about how secure a processing solution is. After all, your business data will go there. So you should choose a solution that follows the latest web security standards and keeps all of your data strictly confidential.
At Docparser, we use SSL encryption to protect login details. We also use firewalls and server hardening. Furthermore, data is deleted after a certain amount of time the user can set. You can learn more about how we handle security in our security statement.
5. Flexible pricing
Choose document processing software with tiered pricing so you only pay for what you need. As your document volume grows, you can upgrade to higher tiers to handle more data.
Capture Key Data from Your Documents Easily
Use Docparser to automate data entry, save time, and streamline your document-based workflows.
No credit card required.
How to Streamline Workflows With Document Processing
Document processing streamlines workflows by automatically extracting data from business documents and sending it directly into the systems that power your operations.
Automate invoice processing
It’s not uncommon for Accounts Payable teams to struggle with inefficient invoice processing. Hours are spent inputting invoice data manually, leading to errors and slow approvals and payments.
Document processing solves this issue by capturing data from emails or invoice files and sending it to accounting systems. New invoices are recorded there with no manual input and subsequent tasks can start without delays: invoice matching, validation, routing, and so on.
Automate shipping and delivery order processing
Shipping notes and delivery orders often require manual entry into inventory or ERP systems. With document processing, teams can automatically extract shipment IDs, item quantities, dates, and carrier details from scanned or emailed documents and then send it to logistics systems.
As a result, inventory records stay accurate, fulfillment speeds up, and teams can focus on resolving exceptions rather than typing data. This reduces operational bottlenecks across the supply chain, improving the business’ performance and bottom line.
Automate email-to-CRM lead processing
Scott, one of our users in the banking industry, streamlined his lead management process by automating how incoming email attachments are captured, parsed, and sent directly to his CRM. Here is what his workflows looks like:
- A new lead arrives via email and is automatically forwarded to Zapier.
- Zapier sends the attached PDF to Docparser for data extraction.
- Docparser extracts key lead details accurately, even when document layouts vary slightly.
- The structured data is sent back to Zapier and automatically uploaded to Salesforce.
- Salesforce creates the lead, triggers the follow-up campaign, and sends a notification to the manager.
The result is hundreds of leads are processed with consistent accuracy, zero manual data entry, and no need for ongoing adjustments.
“I’ve set Docparser up and have run 100s of leads through it with 100% accuracy and no need to tweak anything.”
– Scott K., Branch Manager
Frequently Asked Questions (FAQ) About Document Processing
What is document processing?
Document processing is the conversion of unstructured or semi-structured business documents (think PDFs, invoices, emails, etc.) into structured, machine-readable data. Once available, that data can be exported to databases, spreadsheets, or business applications like CRM or ERP platforms.
What types of documents can be processed automatically?
Most document processing solutions can handle a wide range of document types. Common examples include invoices, purchase orders, receipts, shipping labels, bank statements, insurance claims, legal contracts, and more.
How does document processing differ from OCR?
OCR converts images of text into machine-readable text. Document processing, on the other hand, encompasses a wider scope that captures, classifies, validates, and delivers data to downstream systems. So OCR is one component of document processing, not the entire solution.
What is the difference between document processing and intelligent document processing (IDP)?
Document processing relies on document templates and rules to extract data from documents with consistent layouts. Intelligent Document Processing (IDP) adds AI, machine learning, and even NLP to the mix to understand, classify, and extract data from documents. Capabilities of IDP include processing documents with varying formats, converting handwriting to text, summarizing content, and more. In short, IDP represents the evolution of document processing, providing higher accuracy and a wider range of use cases.
What are the benefits of document processing?
Automating document processing helps you save time, improve data accuracy, streamline workflows, reduce costs, improve productivity by reallocating staff to higher-value tasks, enhance compliance and security, and scale operations, without hiring additional staff.
Is document processing secure?
Yes, most document processing platforms use secure data centers, encryption (both in transit and at rest), secure data centers, and compliance with standards like GDPR. When evaluating a solution, you should verify what security certifications they hold and whether they offer features like access controls and audit logs.
Get Started Today
You can set up your own document parser in minutes and watch as Docparser processes your documents by itself. To get started, simply follow these steps:
- Sign up for a Docparser account
- Upload sample documents
- Create parsing rules
- Parse your documents
- Download your parsed data or export it to your preferred cloud app
If manual document processing is bogging down your workflows, it’s time to automate it and streamline your workflows. Upload one of your recurring documents and build your parser within minutes.
Capture Key Data from Your Documents Easily
Use Docparser to automate data entry, save time, and streamline your document-based workflows.
No credit card required.
