Optical Character Recognition versus Amazon Textract: Which is better for Invoice Automation?

Invoice Automation is a boon to Accounts Payable (AP) departments. However, it quickly becomes a bane if your solution fails to deliver lightning-fast processing and approvals, cost savings, and fewer errors as promised.

If you have already implemented invoice automation and things aren’t going as planned, your current platform might be to blame. While automation is lightyears ahead of traditional, paper-based processing, outdated invoice automation technology still poses many challenges staff must overcome.

How does Invoice Automation Work?

Invoice automation streamlines processing and approvals, guaranteeing a more efficient process. Once an AP department receives an invoice from a vendor, invoice automation utilizes technology to extract and analyze invoice data before inputting it into your accounting system.

Invoices are ingested via email, fax, or document uploads through an automated system. Then, Artificial Intelligence (AI) technology scans the invoice and pulls out the relevant data in seconds. Invoice details are then summarized for staff to review, modify G/L coding, add comments, and approve or reject the invoice. Finally, information is posted to the General Ledger, where a detailed document history is available on demand.

Traditional OCR versus Amazon Textract:

Two standard tools used for automated data extraction are traditional Optical Character Recognition (OCR) and Amazon Web Services (AWS) Textract. While they perform similarly, there are distinctive differences between the two.


Traditional Optical character recognition (OCR) is sometimes referred to as text recognition. An OCR program extracts and repurposes data from scanned documents, camera images and image-only pdfs. OCR software singles out letters on the image, puts them into words and then puts the words into sentences, thus enabling access to and editing of the original content. It also eliminates the need for manual data entry1.

OCR was once considered the pinnacle of electronic invoicing because of its ability to pull data from PDF files. Still, it has yet to evolve as quickly as other invoice-ingesting technologies. Even with automation implemented, those using solutions powered by OCR may still have lots of manual work. When OCR technology fails, staff must intervene and rekey invoice data to fix errors. All efficiency gained from automation is lost, and the chances of human error are increased again. Paper invoicing costs companies an average of $53.502. While automation drastically lowers that price, the chances of making a mistake are always possible when a person is involved.

Amazon Textract:

Award-winning invoice automation providers have leveraged cutting-edge technology like Amazon Textract to help users expedite invoice approvals while improving accuracy and visibility.

Amazon Textract is a machine learning (ML) service that automatically extracts text, handwriting, and data from scanned documents. It goes beyond simple optical character recognition (OCR) to identify, understand, and extract data from tables and forms3.

This powerful technology combines traditional OCR with advanced machine learning to read and process any document, accurately extracting text and data, handwriting, tables, and other data. Best-in-class solutions read each invoice line by line and leverage the technology further by building invoice-specific rules within their systems. The result is a fully automated invoice process, free of limitations and manual headaches. Also, the risk of error is significantly reduced as the AI used for Textract clocks in with 85%- 90% accuracy, whereas OCR is an estimated 75%.

Additionally, Textract helps users go the extra mile to safeguard sensitive information with the help of data privacy, encryption, security controls, and support compliance standards such as HIPAA, which puts features in place to secure and protect patient or resident information.  


Best-in-class invoice automation solutions are powered by advanced technology and seamlessly integrate with your existing accounting software. With a touchless AP experience, finance teams benefit from greater efficiency, enhanced visibility, improved timeliness, and better accuracy.

To learn more about Paymerang’s Invoice Automation platform, schedule a demo to learn how your team can focus on what they do best with automation’s help.


1IBM: What is Optical Character Recognition?

2Industry Week

3Amazon Textract

Erroll Amacker

Erroll Amacker

Erroll Amacker is the Account Executive for Paymerang's Invoice Automation software within our Education vertical. Erroll was the first to move into the Account Executive role for our Invoice Automation solution which Paymerang brought to market in 2019 and ramped up sales and marketing for in 2020. He has enjoyed the fast pace and variety that blitz scaling a new product to market has brought to the company and continues to focus on the product's growth focusing on both Lower and Higher Education.