Short answer
OCR (optical character recognition) is recognising text in an image or scanned document — it turns an image into text a computer can process. Today OCR is combined with AI, which not only reads the text but understands where the amount, date and supplier are, even if every invoice has a different layout.
OCR on its own vs OCR with AI
Classic OCR turns an image into text but doesn’t know what each number means. To extract data, templates used to be built for every document type — and they broke whenever a supplier changed its invoice layout.
OCR with AI understands the content of the document: it finds the invoice number, the amount before VAT, the VAT rate and the payment due date regardless of the layout. Some modern AI models “read” the document image directly.
Where it helps
- Invoice processing and receipt processing.
- Delivery notes, contracts, applications, forms.
- Digitising and searching archives.
Important
- The better the image quality, the more accurate the result.
- Important fields (amounts, accounts) need validation rules.
- If the document is already a structured e-invoice, OCR isn’t needed — the data is read directly from the XML.