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What Is Intelligent Document Processing and How OCR Helps

IDC reports that over 80% of business data exists in unstructured or semi-structured formats like emails, PDFs, and scanned images. These include invoices, shipping documents, contracts, forms, and more. Processing this manually slows down operations, causes errors, and increases costs for every department.

  • Can large volumes of documents be handled without expanding headcount?
  • What tools can convert scanned documents into usable, structured data?
  • Is there a system that learns over time and improves without constant manual intervention?

This is where understanding what is intelligent document processing becomes important. IDP uses OCR, AI, and machine learning to extract data from documents automatically. It saves time, reduces manual effort, and gives businesses better control over their document workflows. This guide explains the basics of IDP, how it works, and how it fits with OCR.

What Is Intelligent Document Processing?

Intelligent Document Processing (IDP) refers to a set of technologies that capture, extract, and organize data from various types of documents without human intervention. It combines OCR with artificial intelligence to process both structured and unstructured information.

Most companies receive thousands of documents every month. These could be invoices, shipping labels, customer forms, or compliance papers. With IDP, the system reads the text, identifies key fields, and feeds the information into your business software. This makes daily tasks faster and less error-prone.

How OCR Technology Supports Intelligent Document Processing

Optical Character Recognition (OCR) is the engine that powers document reading. It’s the first step in converting paper or image-based content into machine-readable text.

Scanning and Text Conversion

OCR scans the document and identifies letters, numbers, and symbols. It works on both printed and handwritten content. With high-quality scans, OCR can reach over 99% accuracy in text recognition.

Layout Understanding

After OCR extracts the characters, IDP systems figure out what each piece of data means. For example, a number next to the label “Invoice Total” will be tagged as an amount. Advanced IDP tools understand layouts from multiple formats without custom rules.

Data Structuring

Once the data is identified, it is structured into usable formats like Excel, XML, or JSON. This makes integration with ERP systems, financial tools, and databases easier and automatic.

Explore this in more detail here: OCR technology

Components That Make Intelligent Document Processing Work

To function accurately and improve over time, IDP systems combine different technologies.

Document Classification

The system must first know what kind of document it is dealing with. Is it an invoice, a contract, or a letter of credit? Classification models help IDP tag and process documents correctly.

Named Entity Recognition (NER)

NER finds key fields and labels like dates, prices, names, or addresses. It does not rely on fixed positions. Even if the layout changes, the system finds the right data.

Machine Learning

With every document processed, the system improves. If a user corrects a mistake, the system learns and avoids the same error in the future.

Validation Rules

Business rules check the extracted data for correctness. For example, if a currency field contains a name, it will be flagged for review.

Benefits of Using IDP in Business Workflows

Businesses use IDP to remove friction from document-heavy processes across different industries.

Reduces Manual Workload

Most clerical staff spend hours copying data from one system to another. IDP reduces this time, allowing teams to focus on decision-making instead.

Speeds Up Operations

With automatic document handling, processes that took hours or days can now finish in minutes.

Improves Data Accuracy

Since machines don’t get tired or distracted, the number of errors from mistyped entries goes down drastically.

Lowers Processing Costs

By reducing the need for manual entry, companies cut payroll costs, reduce delays, and avoid late penalties from processing errors.

Common Use Cases of Intelligent Document Processing

IDP is used across sectors to automate common workflows involving documents.

Logistics and Shipping

Extracting shipping information from air waybills, bills of lading, and commercial invoices to improve cargo tracking and billing.

Banking and Finance

Pulling data from forms, KYC documents, and financial statements to speed up onboarding, compliance, and credit checks.

Healthcare

Reading lab reports, prescriptions, and insurance documents to help administrative staff manage patient records and claims.

Manufacturing and Retail

Handling purchase orders, inventory sheets, and supplier invoices without delays or missed entries.

How KlearStack Delivers Intelligent Document Processing

KlearStack provides an IDP platform that combines OCR technology, AI, and domain-specific models. It can handle a wide variety of documents with up to 99% accuracy, and it doesn’t need constant training or templates.

With what is intelligent document processing, businesses can:

  • Extract data from documents in seconds
  • Export it to ERP, CRM, or cloud storage
  • Set rules to automatically flag unusual entries
  • Monitor performance through dashboards

Whether it’s finance, shipping, or compliance, KlearStack simplifies how businesses handle documents every day.

Conclusion

Now that you know what is intelligent document processing, it’s clear that businesses don’t have to rely on manual effort for document handling anymore. IDP makes daily operations faster, more accurate, and easier to manage.

Here’s what you should remember:

  • IDP automates reading and organizing documents
  • OCR extracts raw text from scans and images
  • AI and ML structure and validate that data
  • KlearStack’s IDP can cut manual effort by 80% and improve operations by 5x

For any organization that deals with a large volume of documents, adopting IDP is not optional. It’s the logical next step.

FAQs

Is intelligent document processing the same as OCR?

No. OCR extracts text, while IDP uses OCR plus AI to interpret and structure it.

Can IDP work with different types of documents?

Yes, it works with invoices, contracts, forms, and more—even if the layouts vary.

Do I need to train IDP models for my documents?

Modern IDP systems come pre-trained and adapt with minimal user input.

Is IDP only for large enterprises?

No. Small and medium businesses also benefit from faster document handling and reduced errors.

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