
Plate IQ (YC S15) Turns Paper Invoices into Predictive Insights - twakefield
http://techcrunch.com/2015/08/08/plate-iq/
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enraged_camel
My company currently does this using enterprise-grade software, and I'm deeply
familiar with the problem area. The article quotes the guy as hearing the
problem and saying:

\--“My instant solution was, ok we have these big devices nowadays… why can’t
we use them to capture these invoices, use technology to convert that image
into text and extract information out of these invoices,” he adds. “It was
pretty much a bottoms up approach.”--

Yeah... no. I'm afraid it is much, much more challenging than he realizes.
Here's a quick, non-exhaustive summary:

1\. Most paper invoices are printed and then either mailed or faxed. Sometimes
the vendor's accounting staff manually annotate (e.g. hand-writing) the
printed paper with additional information that didn't exist on their
accounting system (e.g. purchase order number). By the time the invoice
arrives at the AP department, the quality of writing on it can be atrocious,
which greatly affects the accuracy of OCR. So you need to use complex image
processing on the invoice first, and then OCR it. You may also need ICR to
read hand-written information.

2\. A lot of vendors change their invoice formats on a regular basis (e.g. by
changing to a different template on QuickBooks). This means that whatever
machine-learning you use to process a vendor's invoices will be invalidated
when the format changes.

3\. Smaller vendors, such as mom-and-pop shops that restaurants sometimes deal
with, are very undisciplined about their invoicing, and can forget to put key
pieces of information on the invoice, or make typos.

Over the years, I've come to realize that the only way to efficiently deal
with invoices is to make sure they never become paper-based. We have been
pushing our customers and their vendors to use EDI instead, which is a LOT
easier to control and standardize.

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radicalbyte
I think that's just marketing speak. They'll be manually checking those
invoices. But OCR greatly reduces the work compared to data entry.

Also, with scale, you have the option of getting the suppliers to move over to
EDI.

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radicalbyte
There are loads of companies that do that. I designed and implemented a system
around 2009/2010 which did exactly the same thing for the energy market.

Certain subsets of the medical market have embedded players offering similar
services.

To make real money from this you need marketshare; with that you can look for
points ripe for arbitrage..

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biot
Why not just eliminate the paper to begin with? It's obviously a bit tougher
as you need to tackle both sides of the market at once, but not having to mail
invoices means the benefit of faster payments for suppliers (maybe not a
benefit to the restaurant however) and could enable just-in-time ordering from
the restaurant.

It might even flip the invoicing on its head. When the restaurant orders, it
creates a transaction. The supplier delivers and the restaurant completes the
transaction, generating a payment. Now the restaurant can order only what it
needs, faster, and the supplier receives its payment faster.

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walterbell
Could this be applied to consumer billing, e.g. in industries with a history
of complex charges, e.g. telecom and healthcare?

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bhavukQ
Yes. Absolutely.

This solution works best for industries where multiple raw materials are used
and are transformed to something completely different. Manufacturing,
healthcare and hotels is something can leverage a solution like this.

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misiti3780
cool idea! i actually had this idea a few years ago and went around to a few
restaurants asking if they would use it - most of the chefs i approached
seemed luke warm to the idea so i never went forward - glad to see they are
finally coming around!

