OCR and Accounts Payable Setup

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.

TABLE OF CONTENTS

• How to Set Up OCR in Precoro
• How to Process Attachments with OCR

  • Recognizing Suppliers

  • Processing Time

• Statuses of the Processed Documents

• How to create Invoices with Processed Documents

• Invoice Matching Process

  • Additional Matching Rules

• How to Add Taxes Through the Document

• How to Add Multiple Credit Notes to An Invoice Through OCR

• Manage OCR Email Flow

How to Set Up OCR in Precoro

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 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.

• Enter Tax as a line item — that way, if taxes are turned off in your company’s Basic Settings, but the document includes the tax amount, it will be recorded as a separate line item. The created item’s name will be TAX {tax rate}, with the recorded tax amount indicated in the document.

To activate the setting, please contact our Support Team, and we will gladly assist you with that.

 

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. 

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.

When working with the OCR feature you can resize the split screen with the attachment to your needs:

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.

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.

• 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.

When you hover over the Canceled status, you will see the first and last name of the user who has canceled it:

• 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 AP 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 Document Custom Fields that were not entered automatically and press Create.

2. Make sure to fill in the required Item 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 Document Custom Fields that were not entered automatically and press Create.

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

You can proceed to the Invoice and Purchase Order on the AP 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.

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.

You can also select the needed type of Invoice to Order Mapping Rules:

• Selective Mapping — documents must match at least one of the set rules. 

• Complete Mapping — documents must fully comply with all the set rules without exception.

Please note that the Invoice to Order Mapping Rules are only available if you have previously selected the PO-based Invoices in the Invoice Type for Auto Creation field.

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.

How to Add Taxes Through the Document

You can add Taxes directly through the document without having to go to the settings, add a new tax, and then return to the document to apply the newly created tax. This shortcut tax creation process will reduce the time spent processing documents in your AP Inbox.

To add the new tax through the document:

1. Click the Taxes field and press the Add New Tax button on top of the drop-down list of options. 

2. Enter the needed Tax information and press the Save button below.

3. Now, you can see the added option available for selection in the list.

Another OCR feature, with regard to Taxes, is the automatic fill-out of the Tax Rate field in the document. We will map the tax values recognized by OCR with your existing Rates and record this data in your document. This process will speed up document autocomplete and help reduce manual errors.

How to Add Multiple Credit Notes to An Invoice Through OCR

You can add several Credit Notes to the Invoice with OCR. This functionality can be really useful when one CN does not cover the Invoice Total, and you need to add another to cover the difference.

Follow the steps below to do that:

1. Proceed to the AP Inbox page, select the needed document from the list, and press the Create Document action button.

2. Select the Credit Note type and go on to select the Invoice. Please note that you can additionally see the Items Custom Fields from Invoice when you create a Credit Note with OCR. This way, you will have more complete information to help you keep track of the needed data and save time.

3. Select the item for which you wish to create a Credit Note and fill out the needed information.

4. Go to the AP Inbox page, select another document from the list, and press the action button to create another Credit Note document.

5. In the Select the Invoice list, you will see the previous Invoice, where you can still add the new Credit Note for the item left.

Manage OCR Email Flow

You can manage the OCR email flow by turning on or off the inbox notifications regarding the attachment processing status. The settings to manage those letters can be found in the Email Preferences → MISC → Document has been processed with OCR checkbox.

Also, you can track all the documents that were unprocessed for one of the reasons listed below. You can activate this notification in Email Preferences → Misc → Notification with the List of OCR Unprocessed Documents:

With this option activated, users with OCR Roles will receive emails once a week with the list of all the OCR unprocessed documents from Precoro.

Please consider the reasons why the attachment might not get processed:

1. Check that the document type sent is an Invoice.

2. Ensure your document format is either pdf, jpeg, png, or tiff.

3. Make sure the document is not password-protected or encrypted.