How to automatically extract data from a PDF invoice
Every PDF invoice that lands in your inbox hides the same trap: someone has to read the vendor, the amounts, the taxes and the number, then re-type them into the accounting system. It is slow, repetitive, and that is exactly where errors creep in. Automatic data extraction fixes the problem at the source: the software reads the invoice for you. Here is how it works, and why it beats keying by hand.
What is automatic invoice data extraction?
It is a software's ability to read an invoice (PDF, scanned image or paper) and pull out the useful information with no manual entry: vendor, date, invoice number, line items, amounts, taxes. Two technologies work together:
- OCR (optical character recognition) extracts the text from the invoice. It is a proven, stable technology, at the heart of Viridem's strength for years.
- Artificial intelligence does not do the extraction: it contextualizes the information OCR has already extracted. It understands that a number is a tax amount, a string is an invoice number, even when the layout changes from one vendor to the next.
That is exactly Viridem's strength: combining proven OCR technology, the technology that built our reputation, with recent AI-based innovations. OCR brings stability, AI brings flexibility, and preconfigured, industry-specific workflows speed up setup. Together they reach around 99% accuracy on structured invoices and stay reliable on unusual formats.
Why automatic extraction beats manual entry
This is not just about speed. Research on human error is clear: the moment a person re-keys data, an error rate sets in.
Barchard and Pace (2011) measure an error rate around 1% for single entry; Panko's work puts data entry errors between 1% and 5% depending on complexity.
The McKinsey Global Institute estimates administrative employees spend nearly 19% of their week searching for and gathering information.
By reading the invoice automatically, you remove the re-keying, the first source of errors, and free that time for real decisions.
How it works, step by step
- Intake. The invoice arrives by email, upload or scan. No manual sorting.
- Reading. OCR extracts the text from the invoice; AI then contextualizes each field (vendor, amounts, taxes, number, line items).
- Matching. The data is compared with the purchase order and the receipt (three-way matching). A mismatch is flagged.
- Validation by exception. People only look at doubtful cases, with an audit trail.
- Posting. The invoice is written to your accounting software with the right coding, no re-keying. Viridem integrates with more than 30 ERPs (Acomba, Maestro, Sage, QuickBooks and others).
A real example
At Chocolat Lamontagne (Sherbrooke), automatic extraction helped process 14,500 invoices in two years and reach 99% electronic invoices. The reading and keying work, once manual, is handled by the software.
Native PDF or scanned PDF: why it changes everything
Not all PDF invoices are equal. A "native" PDF, generated by billing software, already contains selectable text: the data is there, it just needs to be interpreted. A "scanned" PDF is only an image of the invoice: no usable text, it has to be rebuilt first. That is exactly where the hybrid approach matters. OCR rebuilds the text from the image, AI interprets both kinds of documents, and the whole thing adapts to whatever the vendor sends, without forcing you to sort formats by hand. The result: whether an invoice arrives as a clean PDF, a phone photo or scanned paper, it follows the same automated path.
In short
Automatically extracting data from a PDF invoice is not a gimmick: it removes the slowest and riskiest step in accounts payable. OCR reads, AI understands, matching checks, and your team validates by exception. All in proprietary, specialized software, built and hosted in Canada.
Frequently asked questions
How do you automatically extract data from a PDF invoice?
With software that combines OCR (to turn the image into text) and artificial intelligence (to understand which text is the vendor, the amount, the tax). The data is then matched to the purchase order and posted with no re-keying. Viridem reaches around 99% accuracy on structured invoices.
Does extraction work when every vendor has a different format?
Yes. That is exactly what the AI is for: it recognizes the vendor, amounts and taxes even when the layout changes. Unusual formats stay reliable, and doubtful cases are flagged for validation.
Is the extracted data sent to my accounting software?
Yes. After validation, the invoice is posted to your ERP with the right coding, no re-keying. Viridem integrates with more than 30 ERPs on the market.
Sources
- Barchard, K. A., & Pace, L. A. (2011). Preventing human error: The impact of data entry methods on data accuracy and statistical results. Computers in Human Behavior, 27(5), 1834-1839. Abstract (DOI 10.1016/j.chb.2011.04.004)
- Panko, R. R. Research on human error and data entry error rates. arXiv:0801.3114
- McKinsey Global Institute (2012). The social economy: Unlocking value and productivity through social technologies. Report
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