“We’re drowning in documents from every tool we’re using and vendors we’re working with.”

That’s one of the most common things we hear from operations and finance leaders. It’s not that they lack digitization tools. The problem is that the tools they use can’t handle the reality of today’s document chaos.

If you’re still scanning and storing PDFs in the name of digitization, you’re likely drowning in document chaos too. It might feel like you’re doing everything right, but critical data stays stuck in static files and your teams can’t use it.

In this guide, we’ll show you what document digitization should look like and how to make it work for your business.

What is document digitization?

Document digitization is the process of converting physical documents into digital formats that can be stored, accessed, and managed electronically. At its simplest, it starts with scanning paper files into PDFs or images, making them easy to store and share. 

For example, manufacturing and logistics team leaders can digitize purchase orders, shipping manifests, and compliance documents, turning paper into searchable files. This reduces storage costs, speeds audits, and improves operational accuracy.

Document digitization vs intelligent document digitization

Document digitization is often mistaken for simply scanning documents and saving them as PDFs. While that approach removes paper, it leaves you with static files that are pretty much a digital version of the document. You don’t have full access to the data within the document—so it’s hard to turn it into something useful for your team. 

And because document digitization doesn’t do much for a business beyond storage, you need to focus on AI-based document digitization. It builds on basic digitization by using technologies like optical character recognition (OCR) and artificial intelligence (AI) to pull out data, make it searchable, and link it to the tools your teams already use.

And since intelligent document digitization does more than storing information, it’s an approach your business can aim for. It keeps documents from staying static and opens the doors to actually working with them in ways that impact daily operations.

Why basic digitization doesn’t work anymore

“As a finance leader working with numerous manufacturing clients, I’ve seen the absolute mess that basic document digitization creates,” says Andrew Lokenauth, a finance leader for 15+ years. He adds, “Just scanning invoices and storing them as PDFs is like putting a band-aid on a broken arm.”

You might not notice the issues with basic document digitization right away, but over time they build up and turn into a bigger mess. We’ve outlined some of the most common problems that arise when businesses stop at basic digitization:

1. You pay too much for manual work

One of the biggest hidden costs of basic document digitization is the manual effort it leaves behind. Teams still spend hours pulling information from scanned PDFs and typing it into systems.

As Lokenauth explains, 

“Basic digitization actually created more work for my finance teams. We’d have staff manually typing data from scanned PDFs into our ERP system, which was not only mind-numbingly slow but led to tons of errors. I calculated we were losing about $50K annually just on labor costs for manual data entry.”

Lokenauth isn’t the only one who’s seen this. If your teams are spending hours re-entering data from static PDFs, you’re likely feeling the same drain. Basic digitization often keeps manual processes—and with them, high labor costs and slow workflows.

And the impact doesn’t stop there. 

When data is locked in static files, it can’t support automated workflows. There’s no way to push extracted invoice details directly into an ERP or set up approval chains that run in the background. Instead of enabling automation, basic digitization creates a bottleneck that limits scalability across processes.

2. You can’t deal with multiple document types

In real-world operations, documents rarely arrive in neat, uniform formats. As Elmo Taddeo, CEO of Parachute, puts it:

“A significant percentage of documents don’t fit standard templates. Forms with handwritten notes, unique customer requests, or industry-specific compliance documents often require manual processing.”

Taddeo’s observation reflects a common frustration. When documents don’t fit rigid templates, teams are forced to step in manually—slowing workflows and increasing the risk of errors.

He continues, “From speaking with business leaders, I’d estimate 20-40% of documents fall outside standard formats.”

As document volumes grow and formats keep changing, these gaps in basic digitization systems only widen, leaving teams stuck in an endless cycle of workarounds.

3. You deal with cash flow bottlenecks

When documents aren’t processed intelligently, teams have to  stop working with the system—and start working around it.

Accounts receivable spends days chasing down details buried in static PDFs. Accounts payable struggles with late approvals and vendor payments because files aren’t searchable or linked to their workflows. 

And it’s not rare. 77% of AR teams say they experience delays processing invoices.

The underlying issue is that static files don’t support automation. With data locked inside PDFs, systems cannot automatically match invoices to purchase orders, schedule payments, or send reminders to vendors and customers. 

Finance teams are left managing these steps manually, which slows operations and makes it harder to scale processes as the business grows.

4. You experience delayed payments or vendor communications

“When customers called about invoice or shipping queries, service reps had to put them on hold while they dug through digital folders trying to find relevant documents.” This was Lokenauth’s first-hand experience. And he goes on to say, “Average response times went from minutes to hours. Not good for business relationships.”

This issue originates from the challenge of scalability. Without intelligent digitization systems, your internal teams can’t automate routine queries or ensure consistent access to critical data across touchpoints. 

As customer and vendor demands grow, businesses relying on static PDFs and fragmented folders struggle to keep up. Ultimately leading to delays similar to the ones Lokenauth was facing. 

These delays chip away at confidence in your business. Vendors begin questioning your reliability. Customers lose patience when every query feels like a drawn-out process. And while a vendor might give you another chance, your customers won’t. Especially when 83% of customers trust a company more if they provide an excellent customer service experience.

3 ways to digitize your documents 

There are multiple ways to digitize documents. Your approach can depend on your business needs, the volume of documents, and how you plan to use them once digitized. Here are some of the methods to do this:

1. Intelligent data extraction

Basic digitization creates common problems—static files, manual data entry, and disconnected workflows. Intelligent data extraction helps avoid the problems by turning documents into structured, usable data that can flow directly into your business systems.

Unlike basic scanning, intelligent systems read and interpret documents to pull key information. This means your business can move beyond digital storage and start working with data that’s ready for validation and integration.

This is where Docxster comes in. Docxster is a no-code automated document processing platform designed to reduce document processing time by up to 80% and automate workflows in seconds. 

At Docxster, the goal is to help your teams avoid hours of manual document chasing and instead build consistent, flexible workflows that adapt to your business needs, no rigid templates or one-size-fits-all processes.

Here’s how an invoice moves through Docxster:

• Workflow builder: Finance teams set up a workflow to automatically route invoices through approvals, validation, and posting without relying on IT. 
• Real-time data extraction: When a vendor invoice arrives, Docxster scans it instantly, even if it is handwritten or low-quality, and pulls out critical details like vendor name, PO number, line items, and totals.
• Auto-extraction of key fields: It identifies fields like tax codes, payment terms, and due dates, aligning them with your ERP’s required format.
• Data validation: With this feature your invoice totals are cross checked against purchase orders and good received notes (GRNs). Any mismatches like overbilling or missing POs are flagged for review.
• Integrations with your favorite tools: Once verified, the invoice data flows into your ERP (like QuickBooks or Zoho), updating records in real time.
• Manual and automated reviews: If there’s a confidence drop, finance teams get a notification to check flagged invoices directly within Docxster.
• Secure, intelligent storage: Finally, invoices are auto-tagged, indexed, and stored in Docxster Drive. Teams can retrieve them instantly using search filters like vendor name or date range.

This flow helps finance teams handle high volumes of invoices daily without delays, errors, or back-and-forth emails.

2. Scanner based workflows

Scanner-based digitization is one of the most common and foundational ways businesses go paperless. Using flatbed or automatic document feeder (ADF) scanners, they convert physical documents into digital formats. Some scanners also include basic OCR capabilities, making text in scanned files searchable.

This approach is popular because it:

• Helps preserve physical documents in a digital format
• Requires minimal technical expertise to get started
• Works with existing office hardware for small-scale needs

But while scanning preserves documents digitally, it stops there. The files remain static and unstructured. Teams still have to manually name, sort, and enter data from these scanned PDFs into their systems. 

Without built-in intelligence, it’s essentially a digital version of a paper filing cabinet. You can search the files based on their metadata but not based on the content it holds, which makes it an inefficient option with the tools available today.

3. Image capture

Image capture offers a more mobile and flexible way of digitizing documents. 

Using smartphone cameras or tablet apps, teams can quickly scan receipts, delivery notes, or contracts on the go. This method is especially common in field operations, logistics, sales, and other remote environments where carrying a flatbed scanner isn’t practical.

[Let’s add a representative image here of the workflow if we can find one.]

Some widely used document scan apps include:

• Microsoft Lens
• Adobe Scan
• CamScanner

But this approach comes with its own set of challenges. Image quality often varies depending on lighting, angles, or shaky hands, which can affect OCR accuracy. 

Documents captured this way are also frequently stored in silos or manually uploaded to shared drives. Like scanner workflows, this method lacks intelligence—the image may be digital, but the data inside it isn’t yet usable.

Features to look for in a document digitization software

If you’re all set to find the best document digitization software for your business, here are some key features that you must look for:

1. High-accuracy OCR or LLMs

OCR and large language models (LLMs) help extract data from scanned or handwritten documents. High-accuracy systems handle low-quality scans and handwritten text without missing critical details like totals, invoice numbers, or vendor names.

Docxster tackles this head-on. Its OCR and LLMs accurately process everything from invoices and bills of lading to customs forms and handwritten quality reports. This ensures that your teams don’t waste time building new templates for every vendor. 

Instead, documents flow straight into your systems, clean, validated, and ready for tasks like purchase order matching or shipment approvals.

2. Field mapping

Field mapping aligns fields like dates, amounts, and text across document types to deliver clean, consistent data for ERP matching and compliance. 

With Docxster, this happens automatically once your operations team sets the validation rules. For example, a logistics company can validate supplier invoices against packing lists by pulling item details, quantities, and pricing from both documents to ensure accuracy and avoid delays.

3. Smart review and validation workflows

Choose a system that combines automated checks with human oversight to keep critical data accurate and avoid process bottlenecks. This is essential because fully automated systems can miss context in complex cases like high-value transactions or regulatory checks.

For example, automated validation in Docxster flags PO mismatches or duplicate invoices by cross-checking ERP data in real time. If confidence drops, human-in-the-loop (HITL) workflows let teams quickly review and approve flagged documents, ensuring nothing slips through which is ideal for compliance audits or validating supplier payments.

4. Workflow builder

A workflow builder helps operations and finance teams simplify complex processes. For example, a manufacturing company can set up a workflow where invoices move from approvals to finance, trigger payment requests, and update ERP records automatically.

With Docxster, your teams don’t have to wait on IT every time a workflow needs to change. They can create drag-and-drop workflows for multi-step approvals themselves, keeping operations moving without technical roadblocks.

5. Universal search

Universal search allows teams to quickly locate documents across all digitized files using keywords, fields, or even the content within the documents. It reduces time spent searching and eliminates the need to browse through multiple folders. 

Docxster comes with AI-powered search across all documents and Docxster Drive—a cloud based document storage platform. 

For example, your finance team can instantly pull up past invoices by vendor name, or your operations team can locate shipping records using item codes—no more sifting through endless static PDFs.

6. Export capabilities

Your teams need to move extracted data into ERPs, CRMs, and other tools without extra steps. With Docxster, your finance team can push invoice data into QuickBooks or Zoho instantly, while your operations team sends shipping records to ERPs for faster approvals.

7. AI chat

AI chat helps your teams ask natural-language questions and instantly pull answers from document data. It simplifies tasks like summarizing, extracting, and cross-referencing details. 

At Docxster, with the Leah AI Chat, even non-technical staff can query invoices, contracts, or shipping records and get the right information without having to talk to the technical team.

Why settle for basic document digitization when AI-powered digitization gives you more control? 

Enough of drowning in documents from vendors, tools, and teams. You’ve seen how rigid systems only make the chaos worse, leaving your teams buried in static files and endless manual checks.

Docxster helps you take a clean break because it is built to help you gradually transition from manual to automated processing while maintaining control. 

For finance and operations leaders, this means faster access to accurate data, reduced manual workloads, and workflows that align with your business processes instead of forcing rigid templates.

Are you ready to stop drowning in documents from everywhere and make the shift to intelligent document digitization?