OCR text recognition: Optical Character Recognition for increased productivity.

With OCR, you’ll never waste time typing out information again. The OCR software optimises the handling of large volumes of paper documents, helping companies in sectors as diverse as healthcare, public administration, logistics and finance.

07 March 2025 – Frank von Orlikowski

A woman is taking a photo of a document with her mobile phone.

Avoid those pesky mountains of paperwork with OCR

Optical Character Recognition (OCR) is an automatic text recognition program. With OCR, the computer filters text from an image and creates a text document from the characters by recognising letters, words and numbers. The programme uses technologies that convert typed, handwritten or printed text from images into binary-coded text.

How does OCR work?

The four stages of OCR text recognition: layout analysis, character recognition, pattern analysis and text generation.

1. Layout analysis

First, text is scanned or photographed. The software examines the page layout, separates the text from the image files, and notes the number of paragraphs and pages.

2. Character recognition

OCR breaks the text down into paragraphs, then into sentences, then into words and finally into characters such as letters, punctuation marks or numbers.

3. Pattern analysis

To identify letters, the software compares predefined patterns with the scanned characters. It uses several methods to do this:

Feature matching, where the software analyses letters and characters based on their features (e.g. ‘H’ = two vertical lines and a shorter horizontal line).
Pattern recognition, where OCR accesses its own database and compares letters to known characters.

4. Text creation

In the final step, OCR reassembles the recognised characters. This creates words, which are then sorted back into their place in the sentence. In addition, a grammar check in the software ensures that the sentences are correct. OCR stores the text in a document that can then be further processed. When invoices are scanned, OCR recognises this and automatically enters the correct values into the fields in the invoice file or the input mask of the incoming invoice processing software.

Better document management with OCR

OCR helps businesses in a wide range of industries with document management. It relieves companies of the burden of archiving old paper files and makes it easier to process invoices and contracts by digitising documents using optical character recognition, thus enabling automated document processing.

OCR in your business: opportunities and challenges

Using OCR in your business will improve document-centric processes and make life much easier for many departments. However, there are challenges to implementing OCR in your organisation. If you keep in mind what it means to implement OCR, your business will quickly reap the benefits.

Benefits of OCR text recognition software

It takes at least three steps out of the process by automatically analysing, formatting and storing scanned documents in a separate file. It supports document control and contract management, and is used to search large volumes of files. OCR simplifies your workflow by capturing and cataloguing documents in the digital files and folders you specify. Automatic selection of customer-related data reduces the burden on your accounting department, and the ability to post-process documents ensures that they are accurate and up-to-date.

What should your company be aware of when using OCR?

Manually entered data can contain gaps that challenge OCR coding. It is therefore important that certain requirements are met in advance:

The document should be undamaged and easy to read
Complex layouts and unusual fonts make text recognition with OCR difficult
In the case of handwritten documents, consistent fonts support the accuracy of text capture
To use the technology effectively, the OCR system must be integrated with the existing IT infrastructure

Productivity boost through software solutions with OCR

Software solutions with OCR digitise processes, capture data and generate real-time forecasts for decision-making. Applications range from invoice processing and customer relationship management (CRM) to enterprise content management (ECM) and other common or specific tasks.

Even faster processes with AI

Software solutions that also use artificial intelligence work even faster than pure OCR applications. Using programmed learning models, they automate manual tasks, analyse data and optimise communication. One example is Shareflex ECM Online. This alternative to traditional ECM systems uses the Microsoft 365 platform to provide users with complex, cloud-based business applications.

Shareflex^® Invoice

Digital invoice processing with SharePoint and Microsoft 365

Shareflex Invoice supports your financial accounting throughout the entire process chain, from invoice entry and processing to archiving.

✯ Keep track of all your deadlines dates
✯ Workflow-based invoice review and approval
✯ Integrates easily with your existing ERP

Book a free live demo

Screenshot of the user interface of Shareflex Invoice, the software for incoming invoice processing with SharePoint and Microsoft 365.

OCR in practice – how you can benefit from optical character recognition

What does OCR mean in practice? A huge reduction in workload. Automatically capturing documents with OCR text recognition reduces manual work and gives your team more time to do the things that really drive your business forward.

Use OCR when …

… you need to segment and read invoices in a time-efficient manner. OCR scans analogue and digital invoices and automatically identifies relevant fields. Staff only need to check for accuracy before OCR saves them to the correct files and folders.
… you want to use software solutions to search documents. OCR standardises unstructured data and makes it searchable. It prepares documents for further processing in other software solutions, such as a DMS (Document Management System) with AI.
… you want to archive your data in a structured way. The OCR software categorises your documents and organises your archive. Documents that the computer identifies as image files are recognised as text documents after OCR processing, allowing further processing.
… you want to identify and prevent risks. OCR automatically identifies customers based on their data. The software captures the document and recognises data fields such as names, dates of birth or addresses by segmenting the characters. This helps to identify and select high-risk customers.

OCR, the basis for future-proof processes

OCR links the analogue and digital worlds and has made rapid progress in recent years. The technology helps to digitise analogue documents and prepare them for further processing in other applications. Combined with AI, it not only recognises characters, but also understands and interprets the content. Artificial neural networks and intelligent AI algorithms simplify layout analysis and evaluate data faster. Experts agree that because of the increased efficiency, in the future OCR programmes will only be used in combination with AI.