What is OCR?

Posted 28-08-2019

What is OCR?

OCR is an acronym for Optical Character Recognition. It is a popular technology that can read a machine-printed document. The more specific use case of OCR is in automated data capture solutions and document classification. Using OCR, you can reduce the time needed for manual data entry and document processing. These solutions can recognize images, photos, or documents and identify the data for extraction.

The introduction of the OCR technology dates back in the early 1990s. The technology has undergone various modifications since then. However, it remains to be one of the breakthroughs in the digitized world. The advanced OCR methods such as Zonal OCR ensure perfect OCR accuracy and automatic document workflows.

Types Of OCR

There are different types of OCR: 

  1. Intelligent Word Recognition – IWR captures cursive text or handwritten texts. Their algorithm works by recognizing an entire unconstrained handwritten word rather than picking up individual characters.
  2. Intelligent Character Recognition – ICR captures handwritten or cursive text. The engine works by identifying a single character at a time and evolves with its embedded machine learning.
  3. Optical Word Recognition – OWR Targets typewritten text wordwise and is sometimes referred to as OCR
  4. Optical Character Recognition – OCR captures typewritten text and goes one character at a time.
  5. Optical Mark Recognition – OMR is a technique of gathering human input data by recognizing marks or patterns on a document.

How does OCR Work?

1. Pre-Processing: Pre-Processing of the images is done to improve the OCR results. Here are some common techniques used based on the quality of image which needs to be processed for data extraction.

    1. De-skew: takes care of the alignment of the scanned images.
    2. Binarisation: converts an image from color to black and white. This helps in separating text from the background and makes data recognition much easier. 
    3. Despeckle: works by smoothing the edges by removing any spots whatsoever.
    4. Line removal: cleans up all the extra spaces and lines so that the optimized data is left with the system
    5. Zoning: separates different zones such as columns, captions, etc.
    6. Script recognition: Identifying different scripts in a document is necessary so that the right script is invoked by the OCR at the time of data capture.
    7. Segmentation: every character must be segmented before OCR runs on it. It divides every image artifacts into multiple characters.

2. Character Recognition:

    1. Matrix matching: This pattern recognition works by comparing a character image with the glyph stored. This type of character recognition works the best when fonts used in the document are not that fancy.
    2. Feature Extraction: This feature recognises the features such as lines, intersections, direction and loops which makes the entire character recognition an efficient system.

3. Post Processing

Once the data is processed, it’s accuracy can be increased. Lexicon plays an important role in increasing the quality of extracted data. Lexicons are the list of words that can occur in the document. Data processing can get a little tricky if the document does not contain Lexicons. There are other techniques like Natural Language Processing (NLP), Database Lookups which further improves the accuracy of data extraction process.

What is OCR used for?

The common use-case of OCR technology are:

  • Forms processing e.g. bills, receipts.
  • Account Payables (AP) automation which includes processing supplier invoices and purchase orders.
  • Remittance e.g., money transfers, online money transactions, etc.
  • Cheque Processing
  • Explanation of benefits processing like assembling benefits and incentives of employees.
  • Mortgage loan processing
  • Claims processing at customer and administrative levels.
  • Transcript processing for managing student credits and grades.

How can OCR Software benefit your organization

Adapting OCR solutions can transform many business processes. The Data Capture Software such as DocAcquire which uses OCR under the hood can benefit your company in the following ways:

Better processing speed: 

It minimizes the manual effort involved in the digitisation process which saves a lot of time thus improves processing as a whole.

Optimizes the workforce:

Minimizing manual work can enable the staff to do many higher-value tasks. Handling the redundant work automatically can boost productivity and customer satisfaction.

Reduced costs: 

It minimizes the labour cost incurred due to manual document sorting and data entry. When a business demands growth, using an OCR software can eliminate the need for additional workforce, hence cutting costs.

How DocAcquire uses OCR

Under the hood, DocAcquire uses Google Vision OCR API to extract data from documents. Google Vision is built on Machine Learning which can extract data virtually from any document coming from various sources like scanners, email inboxes (Gmail, Outlook), Dropbox, Google Drive, Box, Network Folders etc. 

After the data extraction is done by the OCR engine, DocAcquire’s intelligent data capture engine applies the intelligent extraction rules to identify the actionable(transactional) data from a document. The next steps format and validate the extracted data according to the rules specified to a document type.

Once the data extraction is done, the document is then ready for next stage of workflow for validation. Finally after the successful validation the document (data) can be seamlessly send to any Line of  Business application.

How DocAcquire can improve your day-to-day business processes?

DocAcquire helps businesses to streamline document intensive workflows by automating the process of capture, classification and extraction of key data. This results in employees can spend more time on things that are important to them, which results in;

  1. Eliminate manual processes
  2. Improvements in productivity
  3. customer satisfaction
  4. Accuracy of information
  5. Better governance and compliance


If you are struggling with processing high volume PDF documents or other formats which involves lot of manual keying of data into your back office systems, then DocAcquire is the right solution for you. Manually entering data can be tiresome and can result in error generation no matter how careful you are with your data entry. DocAcquire provides tailored solution for almost every use case that can help you in digitizing invoices, contracts, forms etc. 

If you want to get insight from your historical documents, DocAcquire is the solution for you to convert unstructured data sitting in documents to structured format so that you can extract valuable insight from them.

Please book a demo with us to discuss your use case.

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