OCR and Accounts Payable Setup

Optical Character Recognition (OCR) is a process that converts an image of text into a machine-readable format. For example, if you scan an invoice, your computer saves the scan as an image file. With the OCR, you can transform the image into data and create an Invoice in Precoro automatically or with some manual edits.

OCR feature can automate purchasing processes and allows you to:
  • Get efficient document management sent to the AP inbox.
  • Avoid manual data entry and subsequently save time.
  • Reduce the number of manual errors.

In Precoro, you can use the OCR for standardized Invoice creation.


How to Set Up OCR in Precoro

To enable the OCR feature, please contact our Customer Success Team, who will provide you with all the necessary assistance.

Give your Users the Necessary Roles

To be able to work with OCR functionality in Precoro, your users should have several Roles:

  • Invoice Creator — the ability to create and edit Invoices.
  • OCR — allowing the interactions with the AP inbox and operating with the recognized documents.

You can customize the settings listed below to automate your working process with the help of our Customer Success Manager:

  • Inbox email for documents — this is the email where suppliers or clients send you the Invoice documents. Precoro takes those documents from the email, processes them, and adds them to your AP inbox, where you can continue working with them.

The first part of the email name up to the @email.precoro.com domain can be changed. If you want to change it, please contact our CS team. 

Please note if you prefer not to utilize an email associated with the Precoro domain, you can establish an automated forwarding system from your inbox to a predefined AP (Accounts Payable) inbox.

The created email can then be shared with your suppliers.

  • Enable Invoice Auto Creation — activating this setting will allow you to set the initiator and select the Invoice type you want for automatic creation. 
    • Initiator of Auto-Created Invoices — the email of the person who will be set as an initiator of the Invoice in Precoro.
  • Select one of the Invoice Types for Auto Creation:

    • Only Purchase Order (PO) based Invoices — invoices will be automatically created only if they match Purchase Order.  
    • PO-based Invoices and Standalone Invoices — all the invoices will be created automatically. The Invoice will be created as a PO-based Invoice if there is a match. 
    • Only Standalone Invoices — the invoice will be automatically created only if there are no POs for this case.
  • Enter Invoice as one line — your Invoice will be entered in Precoro as one line with the summed-up Total invoice amount. It will be matched to the first Purchase Order item if any is available for Invoice creation. If this option is not activated, you will not be able to create Credit Note documents with OCR.

How to Process Attachments with OCR

To begin processing the Invoices, ensure the OCR is set up and your users have the necessary roles. If the OCR is set, you will see the new section in the right-side menu called AP Inbox, where you will be able to:

  • Upload new attachments through Precoro.
  • See the attachments from the email and their processing statuses.
  • Create the Invoices based on the processed document. 

Please note that OCR can only work with the following formats: pdf, jpeg, png, and tiff

New documents can be added to the AP Inbox in these three ways:

1. Supplier or other user sends the Invoice to the Inbox email for documents provided by Precoro. The document will automatically be sent for recognition. In addition, you can track the document progress on the AP Inbox page by Statuses.

2. Manually upload the document directly through the AP Inbox page using the Upload Attachment button.

3. Manually upload documents directly through the Invoices page using the Create with OCR. Enter the required DCF information, add the attachment you want to get processed, and press the Create button below.

You can check the document queue and statuses by clicking the OCR Attachments button on the Invoices page top panel. You can also use the advanced set of filters on that page to quickly find the necessary information.

    Recognizing Suppliers

    When you add a new Supplier manually, through import, or by invitation form, the Enter Invoice as one line setting will be automatically activated for them if you have previously activated this setting in the OCR configuration.

    You can also match the Supplier in the Identified Supplier column on the AP Inbox page. The system will prompt you for confirmation, and your choice will be remembered and entered automatically in future documents.

    You can add a new Supplier through this field by clicking the corresponding button:

    Processing Time

    The processing time for your documents can vary depending on the OCR provider you select, ranging from as quick as 30 seconds to a maximum of two working days. Rest assured, we are diligently working on streamlining the process to automate your documents, aiming to make it as efficient and seamless as possible for you.

    Adding the same document multiple times will simply queue them up, potentially prolonging the waiting time for processing.

    Statuses of the Processed Documents

    You can always see the document progress guided by their Status:

    • Processing — the file is being processed with OCR. It may take a couple of hours. At this stage, you can either Delete the attachment or Reject it. If you proceed with Rejection, the system will ask you to provide a comment stating the reason. After the Rejection, you can still find the document with the Canceled Status, whereas if you Delete it, the attachment will be removed completely.
    • Draft — the document has been processed and is ready for further work. Users will receive email notifications that the document is ready. At this stage, the user can:
      • Create the Invoice or Invoice on PO documents.
      • Reject the attachment, which will give it the Canceled Status.
      • Delete the attachment completely.

    • Completed — the user has created either type of Invoice for the document. You can proceed to the Invoice by following the Related Documents # field link.

    Monosnap screencast 2024-01-05 19-55-44

    • Canceled — the user has canceled the document. At this stage, the user can still Resend the document for another OCR recognition or Delete the attachment.

    • Unable to process — there was a processing error when recognizing the document. Potentially, the error may occur due to duplicate values, password protection, damaged files, wrong format, and so on. The only action available for these documents is Deletion.

    • Paid Limit Exceeded — this status means that you no longer have any paid documents for processing. To continue processing documents, please proceed to Billing and replenish your balance. If you do not have access to Billing, please contact your administrator.

    How to create Invoices with Processed Documents

    In the OCR Inbox, when the document is in Draft Status, you can press the checkmark action button and select the type of Invoice you want:

    • Create Invoice 

    1. Fill in the required Documents Custom Fields that were not entered automatically and press Create.

    2. Make sure to fill in the required Items Custom Fields by Editing the Invoice:

    • Create from PO

    1. Select a Purchase Order from the list of existing ones for the new Invoice.

    2. Check and fill in the required Documents Custom Fields that were not entered automatically and press Create.

    3. Make sure to fill in the required Items Custom Fields by Editing the Invoice.

    You can proceed to the Invoice and Purchase Order on the OCR Inbox page by following the link in the Related Documents # field.

    You can use the OCR functionality to recognize the Credit Note documents as well.

    Please note that the functionality is available only for users with the Invoice as One Line option enabled. If this option is not activated, you will not see the button to create a Credit Note with OCR Attachment.

    Invoice Matching Process

    Precoro automatically matches documents with existing Purchase Orders to speed up the document processing.

    We have rules that determine whether documents are a match. For example, we compare the SKU or the Item code to make sure that this Invoice, in fact, corresponds to the previously created Purchase Order. The system will create a standalone Invoice without a related Purchase Order if the parameters do not match. Items from Invoices that have been matched will affect the budget and be displayed within the budgeting information.

    The rules below demonstrate the current matching process:

    • SKU or Code Matching: The SKU or code on the invoice line is compared with the SKU or code on the corresponding PO line.
    • Name or Description Matching: The name or description on the invoice line is compared with the name or description on the corresponding PO line.
    • Rate Matching: The rate specified on the invoice line matches the price specified on the corresponding PO line.
    • Amount Matching (Net Total): The amount on the invoice line is compared with the net total amount on the corresponding PO line.
    • Amount Matching (Gross Total): The amount on the invoice line is compared with the gross total amount on the corresponding PO line.
    • Total Invoice Amount Matching: The total amount on the Invoice is compared with the gross total amount on the PO.
    • Line Count Matching: The number of lines on the Invoice should match the number on the PO.

    If the system fails to recognize the Supplier, Tax Rate, and Location initially, once you input this information manually, it will remember your choice and apply it for future use.

    Additional Matching Rules

    We have added more matching rules for Invoices to Purchase Order documents with OCR to increase the number of documents created automatically.

    Here is the list of new matching rules that you can additionally select for your OCR processing:

    • Invoice line SKU or code matched to the PO line SKU.

    • Invoice line Name or Description matched to the PO line Name.

    • Invoice line rate matched to the PO line Price.

    • Invoice line amount matched to the PO line Net Total.

    • Invoice line amount matched to the PO line Gross Total.

    • Invoice amount matched to the PO Gross Total.

    • Count of the Invoice lines should match the PO line count.

    These are the default matching rules that are automatically selected and cannot be deleted:

    • PO number on the Invoice matched to the PO IDN or custom number.

    • Invoice match to the PO if there is only one PO available.

    You can select additional matching rules only after activating the automatic Invoice processing.

    To adopt the new rules, please contact our Support Team, who will gladly help with the settings.