How OCR technology adds value to ERP software - Photo by ThisIsEngineering from PexelsMost companies are moving towards digital transformation. This also goes for ERP software firms. These companies are always trying to find ways to add value and increase their customers’ efficiency. Embedding an Optical Character Recognition (OCR) engine is one way to achieve this goal.

Are you curious how this works? This blog will explain how OCR adds value to ERP software and how ERP software companies can benefit from it.

The problem with traditional invoice processing

Traditionally, users of ERP software providers process their purchase invoices manually. Accountants, for example, receive invoices and input them into the system. You can imagine how much time it would take to insert hundreds to thousands of invoices into the ERP system every month. There must be a smarter, more efficient way.

OCR can be used to speed up invoice processing. However, most companies have not included OCR in their system yet. This is unfortunate since this technology can speed up the entire purchase invoice process.

How OCR can help

Embedding OCR technology into the ERP system eliminates the manual data entry process, without removing any of the invoice management elements of the software. Once an invoice is scanned into the OCR technology, it automatically recognizes all data from the document. This process is done within a matter of seconds.

Often, OCR is powered by machine learning. This means that the system continuously keeps improving itself. It will begin to recognise anomalies or changing layouts that will assure a high level of reliability and accuracy. Besides that, there are multiple benefits of including OCR within the ERP system.

What are the benefits?

An OCR engine speeds up the entire process. At the same time, it maintains a very high level of reliability and accuracy. The benefits of including an OCR technology for both customers and ERP vendors are:

  • Shortens time-to-market
  • Empowers scalability
  • Cost reduction
  • Available in the cloud

Shortens time-to-market

There are two options for ERP vendors to deploy OCR technology within their ERP solution.
They can develop the solution themselves, but this will cost, needs maintaining, and will start as a minimum viable product. Usually, the knowledge and expertise to develop an AI-powered OCR engine is not something that business software providers have in-house. Hence, new employees need to be hired and new structures need to be developed. Developing an OCR technology takes a long time. Time that ERP vendors don’t necessarily have.

Instead, the ERP vendor can embed an existing OCR engine onto its platform. For example, an integration can be done via an OCR API. Integration via an API is very easy, and therefore, the time-to-market is extremely short. It also means updates are more frequent and do not divert resources from the core ERP team.

Accordingly, most business software companies choose to integrate an already developed OCR technology into their own software.

Empowers scalability

As soon as a company grows, so does the amount of invoices incoming. If the data entry is still done manually, the amount of invoices that require processing will pile up. To overcome this, customers need to hire more staff. Thus, making the switch to OCR empowers the scalability of the company.

Cost reduction

Adding OCR to the ERP software reduces the cost for the ERP software vendor’s customers dramatically. Replacing manual data entry with OCR will lead to a saving up to 70% of processing costs.

Developing the OCR technology yourself takes a lot of time, cost and expertise. All that development time, cost and expertise can be avoided by investing in an already existing OCR engine.

Available in the cloud

Most OCR engines are available in the cloud, instead of on-premise (installed and running on computers). The benefit of an OCR engine in the cloud for customers, is that employees can gain access to important information at any time, anywhere.

The availability in the cloud leads to a significant advantage over on-premise software. Due to the current situation around Covid, many employees are forced to work remotely. Furthermore, a cloud based OCR engine will update itself, whereas on-premise systems need to be updated.

ERP software vendors benefit from the scalability of a cloud-based OCR engine, which is priced accordingly. Upgrades are not performed by individual customers. Therefore, support costs will reduce significantly.

In conclusion

In conclusion, OCR helps ERP software companies to stand out from their competitors. Choosing to add OCR helps to add value for their customers.

Integrating such a system is very simple and can be done via an API. Klippa provides a cloud-based OCR engine that ERP vendors can quickly add to their solution using APIs. It is a mature solution, powered by AI that enables ERP vendors to enhance their solution cost effectively and can deliver a competitive advantage and significant value to their customers.


KlippaFounded in 2015, Klippa’s goal is to digitize & automate administrative processes with modern technologies. We help clients enhance the effectiveness of their organization by using machine learning and OCR. Since 2015, more than a thousand happy clients have used Klippa’s software solutions. Klippa currently has an international team of 50 people, with offices in Groningen, Amsterdam and Brasov.

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