In the business world today, data is the real power. It is the solid foundation for nearly every decision-making within a business. To build a valuable database, a company needs to master the first step – data extraction.
Facebook, Amazon, Google, and Apple are all modern-day tech titans worth an estimated $4 trillion. But they weren’t always this size or this valuable. How did they grow to become so powerful? The answer is data.
Facebook has enough data on its average user to fill a 400,000-word document. Meanwhile, Google has more than seven times that amount or the equivalent of roughly three million-word paper per user. These giant tech companies can collect every data right down to what stickers we use in posts and messages.
In this article, we’ll define data extraction and its role in finance and management, as well as show you the simplest way to to extract data from one of your most frequently used documents – expense receipts.
What is data extraction?
So what exactly does it mean to extract data?
Data extraction is the process of getting data from a source for further data processing, storage, or analysis elsewhere. Data extraction is the first step in a data ingestion process named ETL, standing for Extract, Transform, and Load. The purpose of the ETL process is to move, transform and optimize data for analytics.
Data is typically analyzed and then crawled through to get relevant information from the sources such as customer databases or documents. There are many reasons, uses, and examples of how the technology is used, including receipt scanning and data extraction, which we’ll get to later.
A great example of data extraction is scanning job application forms. Let’s say you’re a tech company looking to hire new software developers. But you require specific qualifications, skills, or even hobbies. It’s a high-paying job, so your company receives thousands of applicants.
Going through these job applications can be time-consuming to determine which candidate meets the necessary criteria and who doesn’t.
Data extraction comes in and helps us resolve the trouble of combing through a vast amount of forms. Data extraction technology goes through the applications, sees who matches the company’s specific needs, and discards the rest, saving valuable time, money and person-hours.
Why do businesses need data extraction?
Data extraction is a vital process to automate data collection for analysis. The process provides necessary data from various sources like invoices, emails, or contracts. These data help automate processes and provide valuable insights and analytics for decision-making.
Data extraction is also a fundamental part of many complex and technical procedures, such as improving legacy databases, consolidating resources following a merger or acquisition, or smoothening internal operations by combining data from different divisions and departments.
Below, we’ve listed five significant benefits of data extraction for your business.
Improves accuracy & reduces human error
By automating data entry processes for repetitive tasks, data extraction tools can help improve the accuracy of your data inputs by reducing human errors. If your staff is entering large amounts of data day in and day out, the likelihood of errors and inaccuracies rises. These can include incomplete records, missing/incorrect information, and duplicates.
With an automated process for data extraction, you can remove these errors and get more accurate data overall which is great for your business as you can make better decisions based on actual data.
Increases employee productivity
Employee productivity is a crucial component of a successful business. Removing the need for manual data entry means your staff can spend more time on essential tasks that add more value to your business.
Your employees will have a more positive outlook because they are using their skill sets to complete more meaningful tasks instead of monotonous data entry. Allowing employees to have time and energy to be creative and innovative results in higher job satisfaction, increased productivity, and a better working environment.
Using data extraction allows your team to get their hands on data faster. The simple process of extracting and storing data in a cloud or a database means it is more visible and accessible to anyone in your business that needs it.
Saves you & your business time
Time is money, as they say. Wasted time can prove costly for businesses. According to a study, automating tasks could save up to 2 hours for employees and 3 hours for business leaders per day. Business owners should consider using tools that help improve processes and save time. When used correctly, data extraction tools can save your business time, giving staff time to concentrate on more critical tasks.
Helps reduce costs
By automating long and repetitive tasks where possible, businesses can save money in both the short and long term. In the day-to-day running of your businesses and as it grows, you don’t need to worry about scaling and investing in a large team to handle your data needs. In conclusion, regardless of your business type, extracting data is an essential tool in both financial and managerial aspects.
What is data extraction for receipts?
As we all know, a receipt shows relevant details of a given financial transaction. Data extraction for receipts is an automated process of extracting and organizing critical data such as the date of purchase, quantity, and total payment from a receipt for further usage. Below is an example of extracting critical data from a receipt.
Thanks to advanced modern technology, businesses have been experiencing an automating system of data extractions from receipts using AI. In particular, OCR (Optical Character Recognition) technology can read your receipts almost as perfectly as a human being by scanning data through handwritten or electronic receipts. Not only that, but it can also convert data into digital text so that we can store and analyze that information.
If it may sound too good to be true, let’s look at this real-life experience of the data extraction process for receipts!
The image above is a shared example from one customer using Shoeboxed software to extract data from her receipt. As you can see from Esther’s receipt, AI technology has scanned and automatically filled in a report with all of the essential information, including date, currency, total amount, tax, etc. Additionally, a digital version of the receipt is on the phone, laptop, or PC.
Why do businesses need to extract data from receipts?
In the past, most employees (especially accountants) had to manually read every single receipt to find the required information for expense reports or bookkeeping purposes. This procedure was not only time-consuming and tiring but was also the cause of many human errors which impacted the chain of work and productivity of the whole business.
More and more businesses have eliminated that manual process to switch to automated receipt data extraction system because of its numerous advantages. Here are just a few benefits that data extraction from receipts brings:
Effectively tracking expenses
Losing or forgetting about receipts is commonplace in business. Employees can now just take a photo of the receipt and have all data recorded immediately, with no worries of losing or forgetting the evidence of expense. Accordingly, it loosens the burden for the accounting department and helps accountants keep track of expenses more productively.
A receipt is usually tagged along with an expense export. The purpose of the report is to list the items you’ve made a payment on behalf of the company and to request a reimbursement. Hence, a company could receive hundreds of expense reports every month. To avoid inconsistencies, receipt data must be processed properly. That’s why receipt data extraction software is essential for managing these receipts and quickening payments.
Reduction of accounting errors
Many organizations still rely on their accountant to manually input information held in papers in their systems. This leads to incomplete records, missing/incorrect information, and duplication. By automating the data extraction process, structured data gathered will include fewer mistakes, and business reports will be more accurate.
Efficient supply chain
A company cannot focus on improving the quality of its products or services unless it has proper supply chain planning. To ensure the supply chain runs smoothly, the flow of information relating to worker deployment, inventory, delivery, demand and supply analytics, and so on must be simplified.
One way to do that is to digitize receipt data processing. Receipts and invoices include important supply chain information. Unnecessary delays can be eliminated by automating the extraction and intelligent processing of this data. All deliveries will then be on time, and overall efficiency will improve substantially.
By extracting data to keep track of your business’s receipts can help business owners understand and control the company’s cash flow and spending budget better. As great as it sounds, there’re still some issues relating to this approach because no-AI system is perfect (or maybe not yet!).
Fortunately, we have a perfect solution for it – human-verified data extraction!
Shoeboxed human-verified data extraction feature
AI tools tend to be highly accurate, but errors can occur. Many external factors can impact the performance of OCR technology, such as:
- Poor handwritten text
- Faded text
- Small fonts
- Noisy or blurred images
- Camera motion and shake
- Crumpled paper
If you have encountered one of those situations, don’t worry! Shoeboxed’s got it covered for you!
Our team is well aware of all the troubles that customers might have during their experience using automated data extraction for receipts. That’s why we came up with this unique service to provide the best quality data for you: human-verified data extraction. Let’s simplify how Shoeboxed’s data extraction system works in the following four steps:
- A customer can send receipts to us physically through which we call Magic Envelope or upload them digitally.
- Our AI technology scans and collects data from your receipts.
- A team of data entry experts goes through each receipt to check, correct errors, and verify the accuracy of the extracted data.
- You then can find your neatly extracted data directly on your Shoeboxed account.
Choosing our service ensures the best quality of your data extraction with the most accurate results. No more risk of missing information as your data extracted is corrected and verified by humans. The verification process is also super speedy when it can take only a few hours to 1-5 days, depending on your submission method and Shoeboxed subscription plans.
Shoeboxed integrates with many popular accounting applications. It can also automatically import receipts from Gmail into your Shoeboxed account. Because of the excellent integration feature that Shoeboxed has to offer, you can say goodbye to manual entry, missing inbox receipts, and headaches!
How businesses control and manage receipts significantly impacts their performances. As important as it is, this process sometimes is not taken care of well enough due to its bulky nature.
Automation of data extraction is an innovative and beneficial choice for businesses. Shoeboxed ensures every single receipt goes through a systematic and thorough data extraction process. More importantly, the data is examined and verified by our data experts.
We care about our customers and their business, even down to a single receipt!