In this article, you will learn exactly what OCR in contract management is and its benefits. We also share our 10 step OCR process for managing contracts. Read on to learn more.
OCR (Optical Character Recognition) in contract management is a technology that converts different types of documents, such as scanned paper contracts, PDF files, or images, into editable and searchable data. This technology helps in digitizing paper contracts, making the text searchable, and automating data extraction.
Example: A company using DocuSign's contract management system can leverage OCR to automatically extract dates, parties, and terms from uploaded PDFs which makes the documents searchable and reduces manual data entry errors.
OCR is important for a number of reasons, some of the most common reasons include:
1. Enhanced Searchability: OCR technology makes the text within scanned documents searchable, which allows for quick and efficient finding of specific terms, clauses, or dates within a large volume of contracts.
2. Automated Data Extraction: Extracting key information such as dates, names, contract values, and terms, which can then be automatically populated into a contract management system.
3. Improved Workflow Efficiency: Streamlining the process of managing contracts by reducing the need for manual data entry and enabling automated workflows.
4. Compliance and Accuracy: Reducing the risk of human error and ensuring that all contractual information is accurately captured and easily accessible for compliance and auditing purposes.
5. Digitizing Paper Contracts: Converting paper contracts into digital formats for easier storage, retrieval, and management.
Here are some of the most common OCR data that can be extracted from contracts:
Use our simple 5-step OCR process to effectively manage your contracts. Simply follow the steps below:
Scan your paper contracts using a high-quality scanner to create digital copies. Ensure that the scanned images are clear and legible.
Example: A law firm scans their physical contracts to create digital versions that can be easily stored and retrieved.
Enhance the scanned images by adjusting brightness, contrast, and removing any noise to improve OCR accuracy.
Example: A financial services company preprocesses their scanned documents to ensure all text is readable and clear for the OCR software.
Use OCR software to recognize and extract text from the preprocessed images. The software converts the text into an editable and searchable format.
Example: A real estate agency uses OCR software to extract key information such as property addresses and client names from scanned contracts.
Extract specific data fields such as dates, names, and contract values from the recognized text and populate them into a contract management system.
Example: A manufacturing company extracts contract expiration dates and payment terms to ensure timely renewals and payments.
Validate the extracted data to ensure accuracy and completeness. Correct any errors detected during the validation process.
Example: A healthcare organization validates the extracted patient information from contracts to ensure compliance with regulatory requirements.
We hope you now have a better understanding of what OCR in contract management is and how to use our simple OCR process. If you enjoyed this article, you might also like our article on automated contract data extraction or our article on legal OCR software.