Today, many prefer to use AI rather than hand-enter supplier invoices into their POS System. If you are ready to scan these invoices, let us know.
Many people have questions about doing this, so here are some questions I have received over the past few months.
What is AI supplier invoice processing?
AI supplier invoice processing is when your POS Software reads supplier bills that are sent to you. It uses AI to extract information from the invoice and enter it into your POS system, so you don't have to type everything manually. AI processed supplier invoices, reducing manual entry and speeding up data entry. People do report saving hours. Its accuracy is equivalent to manual data entry. Since you get a check at the end, the accuracy is rarely a significant problem.
Speed and Accuracy of a typist vs AI?
Here are some observations that I worked out for a single-page invoice, admittedly on a run of invoices.
When humans process an invoice, they do not just read words; they must scan, find specific fields, verify totals, and manually key data into the POS software. Humans take about 12 minutes per invoice. This includes locating vendor details, invoice numbers, and line items, and manually retyping them into the POS System. Interestingly, when I tested a trained typist, she took 4 minutes to type an invoice, mainly because she did not have to look at the keyboard as often, and she typed much faster.
An AI OCR invoice processing took 2 seconds per invoice, as it reads the whole document and then extracts the figures.
So the AI OCR processes invoices 60-360 times faster than a human, depending on your training. Its accuracy was much higher.
Where humans will win is with handwritten or complex invoices, like what we sometimes see coming from places like India.
Here are some questions people have asked me about these AI invoices.
Frequently Asked Questions
Q: Will the ATO accept digital copies of receipts and invoices?
A: Well, now you are getting the invoices electronically and entering them manually. As for the invoice, you still have the digital version sent by email or the paper one sent with the goods.
Caution: The AI can often process barely readable, blurry invoices. You should ask for a fresh copy, even if the AI can read it, because ATO inspectors require readable copies.
Q: How do OCR tools handle multi-currency invoices from AliExpress or eBay?
A: Double-check it, as I have seen it confuse US and Australian dollars and go wild with the invoice in Indian rupees.
Q: Do AI tools understand line items?
A: It understands line items; with line credit notes, people have reported mixed success.
Q: How do you stop ABN errors?
A: It's not doing any checks on the ABN number. Again, you need to do it manually.
Q: How does it handle duplicate invoices?
A: It is a very real problem with AI. The supplier sends an invoice by email, so people enter it in. When the goods arrive, they OCR the invoice and use AI to process it. Because it is so much faster than manual typing, it happens much more often with AI.
Info: Your POS System should have rules set to reduce the duplicate invoice problem. You are not going to get out of verifying your information.
Q: Why does your AI tool say VAT instead of GST?
A: People are importing British invoices that have VAT.
Q: Can AI handle all suppliers' invoices with OCR?
A: Almost all, but I have seen some problem ones. Most suppliers today use accounting software to issue invoices, and they can send them to you electronically. At first, you'll need to monitor each supplier to see how it goes.
Q: Does it have a cost?
A: AI is not free; it's very cheap, but it's not free.
Q: What is the break-even point for switching to AI processing invoices?
A: I have asked several people that question with mixed results; one of my clients can type at 65 words a minute, I assume her answer would be very different to mine. It depends on how many invoices you process, how quickly your typist works, and the condition of the invoices.
Written by:
Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.
