Extracting data from invoices is a tedious yet mission-critical task for organizations. Having a central location for all this information, such as a spreadsheet or database, simplifies invoice processing and payment, but manually processing large volumes of invoices is extremely time-consuming, costly, and prone to errors.
While vendor portals have attempted to standardize invoice processing by using templates, in practice, large numbers of invoices do not adhere to templates.
AI provides a better and automated way to extract data from invoices, reducing errors, streamlining this process, and saving time, money, and stress. Instabase AI Hub provides a user-friendly solution that enables organizations to use generative AI for invoice data extraction at scale, without any engineering required. What’s more, it can be easily integrated with existing vendor portals or Accounts Receivable (AR) systems. Let’s take a look at some of the challenges that make programmatically extracting data from invoices difficult and how you can start automating your own invoice processing workflows.
Challenges of Data Extraction From Invoices
Extracting data from invoices, especially at scale, consumes an inordinate amount of human effort. The challenge is compounded when you have to deal with large volumes of documents in different formats and languages. Finance teams lose hours on complex manual invoice data extraction processes that could be spent on value-added, strategic tasks instead. However, simply automating this process isn’t so simple. Here are some of the hurdles that make it difficult for most invoice data extraction tools to succeed.
Semi-Structured and Unstructured Documents
While invoices generally follow a template, every company uses a different structure. With infinite variations, this makes it challenging to automate data extraction. Rule- or template-based systems are unable to accurately extract data when invoices don’t match the rules or template that the system has been trained on.
Varying Formats and Handwritten Text
Invoices often arrive to finance departments in a variety of file types: PDFs, images, Word documents, emails, and more. Your finance team may even receive handwritten paper invoices or scanned invoices with handwritten notes or signatures. Due to the diversity of handwriting styles, invoice extraction tools that use traditional technologies like optical character recognition struggle to accurately recognize and extract handwriting.
Different Languages and Currencies
With global businesses, working with international companies, vendors, or suppliers adds another layer of complexity. Invoices that are issued in various languages require a solution that can translate the information into your company’s official language. Further, foreign currencies need to be converted in order to be compatible with your accounts, processes, and internal tools.
Large Volumes of Data
As organizations scale, the number of invoices they have to deal with can quickly multiply into the thousands or even millions per year. Manually extracting data requires scaling headcount as the number of invoices increases, which becomes extremely costly and time-consuming.
To extract data from invoices at scale, companies need a solution that can not only process large volumes of data in a certain timeframe, but also has the ability to run multiple workflows at once. This is the most efficient way to extract data from invoices, but not all solutions are capable of doing so.
How to Automate Invoice Data Extraction With Instabase AI Hub
Instabase AI Hub is an AI platform for unstructured data that helps individuals and companies easily automate how they work with the data in their documents without any coding. Within AI Hub, the Build app helps you build automated workflows for data extraction and other processing needs. Specify the data points you’d like to extract from your invoices, execute that task across the rest of your invoices, and then download the extracted data or set up a third-party integration to push the data to its final destination.
To build your own automated workflow for invoice data extraction with Instabase AI Hub, follow the steps below.
- Go to aihub.instabase.com and open the Build app. If you’re a new Instabase user, you’ll need to create a free account. Otherwise, log in to your existing account.
- Create a new project.
- Upload an invoice by clicking on the “Upload files,” “Upload folders,” or “Browse external drives” option. You can also drag and drop files onto the page to upload them.
- In the right-hand panel, click on the label icon to classify your document. We suggest using a classification that describes the document type, such as “Invoice.”
To tell Build exactly what data you’d like to extract, select the “Create field” button.
- Create a field that corresponds to the data field that you’d like to extract, such as “Date” or “Total.” Hit “Enter” on your keyboard to confirm the field name. Fields must be added one at a time.
- You should now see the data that Build has identified for that field. If it’s correct, click “Save fields” in the bottom-right corner. If it’s not correct, you can click “Cancel” at the bottom and try again with a different field name. You can also select the “Reasoning” prompt to provide a more specific natural language prompt. Repeat this step until you have all the fields you need.
- Hover your mouse over a field to bring up options to copy the extracted value of a field, edit the field, reorder the field, or delete a field.
- Once you have all the fields you want and they look correct, click the “Create app” button in the top-right corner to save your app. If you later realize that you’ve forgotten some necessary fields, you can always come back and edit your app.
- Give your app a descriptive name. Optionally, add a description and icon.
- Choose the appropriate release state and add optional release notes.
- You’ll see a confirmation message once your app has been saved. Click “Open app” to open it and start using it to extract data from multiple invoices at once.
- Click “Run app.”
- Upload all of the invoices that you’d like to extract data from.
- Once the upload has completed, click on the name of the run.
- You’ll see a list of the uploaded invoices in the left panel and the extracted data in the right panel. If there’s no data found for a field, this is noted. Hover over each field and click on the overlapping squares icon to copy the extracted value. To download all of the extracted data, click on “Export results” in the upper-right corner. You can further automate your new app by using the auto-generated API and link your app to a downstream system.
Since the custom app that you created is saved in your Instabase account, you can return to it for future batches of invoices that need extraction — no matter their file type, language, or currency. Note that if you’d like to convert invoices into a different language or currency, you’ll need to modify your app to incorporate these additional steps.
Advantages of Using Instabase for Invoice Data Extraction
Instabase AI Hub is a powerful solution that overcomes the common challenges of invoice data extraction and sets itself apart from other AI solutions in several ways.
Accurate Data Classification and Extraction
Build, as well as other apps in the Instabase AI Hub, leverages generative AI and machine learning models that excel at accurately recognizing, extracting, and classifying data from semi-structured and unstructured documents. Unlike template- or rule-based technology, Instabase can handle variations in layouts, formats, languages, and currencies.
No Technical Skills Needed
Because Instabase is built on large language models, users can simply use natural language to prompt the AI to extract exactly the data they need — no coding or machine learning expertise required. The user-friendly interface empowers teams to work with unstructured data themselves without relying on engineers.
Immediate Results
Unlike other AI solutions that require engineering resources and lengthy implementations, you can start using Instabase right away and see immediate results. Creating a custom app with Build that extracts the specific data you need from invoices only takes a few minutes, allowing you to start automating the processing of any volume of invoices.
Easy Integration With Third-Party Systems
Instabase enables companies to create automated end-to-end data workflows by integrating with their existing tech stacks and third-party data sources via API. Validate extracted invoice data against third-party data, enrich it with supplemental information from other systems, and seamlessly feed processed data into ERPs, analytics tools, and more.
Secure and Compliant
Major financial services and insurance companies like NatWest, AXA, and Gusto already rely on Instabase for enterprise-grade AI solutions with robust security and compliance. If you work with sensitive data containing personally identifiable information (PII) or financial information, you can be confident that your data is secure with Instabase.
Applicable Across Multiple Use Cases
Instabase doesn’t just provide an AI tool for invoice data extraction. Its AI Hub is filled with a variety of applications for all types of data and document processing needs, such as performing calculations, analyzing extracted data for insights, and more.
Free to Get Started
Start using Instabase AI Hub with free consumption units for new users, so you can automate your invoice data extraction process at no initial cost. Once you’ve run out of consumption units, just buy more as needed.
Use Instabase to Automate Invoice Data Extraction
Accurately extract invoice data at scale, resulting in less manual work, time savings, and faster payment.
