What Is Document Automation? A Guide for Business Leaders

What Is Document Automation?

Document automation is a process of using document automation technology to create, process, and manage documents with minimal human intervention.

It streamlines tasks like data entry, automated document generation, approvals, and archiving by automating repetitive steps. Such automation helps save time, reduce the likelihood of errors, enhance data accuracy, and ensure compliance and regulatory standards.

Modern document automation software relies on the use of artificial intelligence, machine learning, and natural language processing to handle complex tasks such as:

• Extracting data from unstructured formats
• Validating information from various types of digital documents
• Integrating with other business systems

AI can automate everything from invoice processing and contract management to customer onboarding and compliance reporting.

An Example of Document Automation: Banking

The banking industry heavily relies on document processing, making it ripe for document automation.

For example, AI Agents can extract data directly from submitted legal documents, validate it against pre-defined criteria, and flag discrepancies for review. They can also automatically categorize the files and assign them to the appropriate workflows.

Here’s an example of what the automated process may look like:

1. Data extraction: AI Agents scan and extract critical data, such as income details, credit history, and identification information, from the submitted forms.
2. Verification: AI Agents cross-check the extracted data with internal records or third-party databases for validation, such as verifying income against tax filings.
3. Risk assessment: AI Agents analyze the extracted information to provide preliminary risk scores or eligibility recommendations.
4. Approval workflow: Verified and structured data is routed to the relevant department or decision-makers for final review or automated approval.

Result: Loan approvals that previously took days or weeks can now be processed in hours, enabling banks to respond quickly to customer needs while reducing operational costs.

Such document automation can also help with account opening, compliance reporting, fraud detection, and customer onboarding.

See how Direct Mortgage Corp. uses our AI Agents to automate mortgage document workflows. Read the customer story.

An Example of Document Automation: Insurance

Document automation can also streamline insurance processes, like claims and compliance report handling.

Here’s an example of how AI Agents can automate claims processing, while maintaining accuracy and compliance:

1. Document intake and categorization: AI Agents ingest submitted documents from various sources to categorize them into relevant types, such as forms, invoices, photos, or reports, without any human intervention.
2. Data extraction and structuring: Agents extract key details like claim numbers, policyholder information, damage description, and expense amount from unstructured formats to structure them into a format ready for processing.
3. Verification and fraud detection: Agents cross-check extracted data to verify claim details, such as validating receipts, and flag anomalies or inconsistencies to reduce the risk of fraudulent claims.
4. Workflow automation: Agents route verified claims to the appropriate department based on predefined rules, while approving minor claimswithout human involvement.
5. Customer communication: Agents send real-time updates to customers about claim status.

Results: An insurance company speeds up processing, improves customer satisfaction, and reduces operational costs. It also generates more revenue thanks to being able to handle a larger volume of claims.

Who Is Document Automation For?

Document automation is a game-changer for any organization managing large volumes of documents. It’s also ideal for industries where accuracy, compliance, and efficiency are critical.

Automation is also a good fit for every organization that wants to automate repetitive and time-consuming tasks, improve accuracy, free up employees of labor-intensive tasks, and achieve better growth by handling more work without adding more staff.

Here are just a few of many that would benefit from document automation:

• Enterprises managing high document volumes
• Highly regulated industries
• Small and medium-sized businesses (SMB)
• Legal teams
• Finance and accounting departments
• Government and public sector organizations
• Startups and tech-driven companies

What Are the Benefits of Document Automation

Benefit #1: Increased Efficiency

Document automation reduces the time spent on manual processes like data entry, filling, and approvals. This enables teams to focus more on strategic work.

Benefit #2: Cost Savings

By streamlining workflows and minimizing errors, automation reduces labor costs and operational inefficiencies. This helps organizations save substantial resources.

Benefit #3: Improved Accuracy

AI Agents help minimize human error and ensure greater accuracy in data extraction, processing, and reporting. This is very important for highly regulated industries like insurance and banking.

Benefit #4: Scalability

As businesses grow, document automation scales effortlessly, handling increased volumes of documents without additional manpower.

Benefit #5: Regulatory Compliance

Document automation ensures documents are processed according to industry standards and regulations. This helps maintain audit trails and reduce compliance risks.

Benefit #6: Improved Customer Experience

Faster document processing leads to quicker responses and resolutions, which improves customer satisfaction and loyalty.

Benefit #7: Better Data Accessibility

AI Agents like Unstructured AI can also make unstructured data easier to retrieve and analyze.

Benefit #8: Competitive Advantage

Organizations that embrace data automation can operate more efficiently and respond faster to market demands. This gives them a competitive edge over competitors.

What Are the Challenges of Document Automation

While document automation brings many benefits, it also comes with a few challenges businesses should be aware of.

Challenge #1: High Initial Investment

Implementing automation can require significant upfront software, hardware, and training costs. But with a proper AI ROI calculation and the selection of a reliable vendor, it can be more than a solid investment.

Challenge #2: Integration Complexities

Integrating automation solutions with legacy systems or diverse platforms may pose technical challenges. We highly recommend choosing vendors that use an API-first approach to implement the AI solutions without replacing the existing system.

Also, we recommend combining more than one AI Agent from the same vendor, as this helps reduce integration complexities.

Challenge #3: Data Quality Issues

Automation relies on clean and well-organized data. Poor-quality data or inconsistencies can hinder the effectiveness of the document automation process.

If you need help preparing your data for AI, we recommend using AI Agents like Unstructured AI.

Challenge #4: Regulatory and Compliance Risks

Automating document processes in regulated industries requires careful attention to compliance, as errors can lead to fines and legal issues. That’s why it’s important to partner up with a vendor that takes regulation and compliance seriously.

How to Automate Documentation Using AI Agents

Automating documentation using AI Agents can be split into 7 steps:

1. Identify Processes to Automate

The first step is pinpointing repetitive document tasks within your organization.

This can include data entry, categorization, or verification. You can also focus on workflows with unstructured documents like contracts, invoices, or scanned forms.

2. Prepare and Organize Your Data

When you identify processes to automate, you need to gather, digitize, and clean your documents to ensure they’re ready for processing.

This step involves organizing folders and ensuring high-quality scans for accurate processing.

Our AI Agent, Unstructured AI, is a great fit for this step as it helps convert unstructured data into machine-readable formats.

For example, you can upload a document such as an invoice, and Unstructured AI will turn it into structured and organized data.

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3. Automate Data Extraction and Entry

When you have clean and structured data, you need to extract critical information like names, dates, amounts, and others, to enter it into your system.

This step can also be automated using an AI Agent such as Document AI, which helps extract, validate, and categorize data automatically.

For example, Document AI can extract policyholder details from claims forms or information from transcripts and auto-populate your database.

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4. Set Up Intelligent Data Retrieval

When you have digitized data that’s organized and extracted information in your database, setting up data retrieval is important to ensure efficient information retrieval for validation purposes.

Conversational AI can automate this process by interacting with your database to retrieve data when needed. It’s ideal for combining it with Document AI, which ensures integration with your CRM, ERP, and other platforms for data lookups.

For example, Conversational AI and Document AI can work together to automatically retrieve customers’ past claims history for underwriting decisions.

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5. Verify Data and Make Decisions

The next step of the process is checking the extracted data for accuracy and validating it against rules or policies before decision-making.

This step of the process is best automated with Decision AI. This AI Agent applies business logic to validate the extracted data and trigger automated actions.

For example, it can help you automate invoice verification against purchase orders before approval.

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6. Generate and Deliver Documents

When you have verified data that helps you make decisions faster, you can also automate the generation of documents like reports, summaries, or approvals.

Report AI is an AI Agent that helps automatically create documents from structured data.

For example, it can generate a claim settlement report for both internal records and customer communication.

7. Monitor and Optimize the Workflow

When you automate each step of the process, you’ll have end-to-end automation that can help save you time, cut costs, and scale without having documents slowing you down ever again.

The last step of the process is monitoring the performance metrics like processing speed, error rates, cost savings, and others. This information is valuable for optimizing the workflow and gaining better performance.

Our dashboard provides real-time insights into the performance of your document workflows, powered by all AI Agents working together.

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Benefits of Using Our AI Agents for Document Processing

Our suite of AI Agents offers an advanced, API-first solution that seamlessly integrates into existing systems. This ensures smooth documentation automation across your workflows.

You can also combine our AI Agents to handle all aspects of document processing, from data extraction to report generation.

Some additional benefits of using our AI Agents for document processing include:

• Complete automation for your document workflows from start to finish
• No disruption to current document systems - our AI Agents fit right in
• Easy scalability as your business grows
• Faster document processing for complex file formats
• Improved accuracy in data handling across different formats
• Faster decision-making with real-time access to relevant data
• Improved productivity by eliminating manual data processes
• Faster approvals with automated decision-making processes
• Consistent compliance with internal and external regulations
• Professional, error-free reports

How to Choose the Right Document Automation Tools

When choosing the right document automation tools, it’s important to consider factors like business needs, workflow complexity, integration, scalability, accuracy, capabilities, and ease of use.

1. Understand Your Business Needs and Workflow Complexity

Start by assessing your specific business needs and the complexity of your document workflows.

Different tools cater to different levels of complexity. Understanding your process will guide you to the best solution.

Questions to consider:

• What types of documents do you handle?
• How many documents do you process daily?
• What are the key main points in your current processes?

Choosing the right solution that matches your needs will lead to a smoother implementation, faster ROI, and better outcomes.

2. Prioritize Integration With Existing Systems

The effectiveness of a chosen document automation solution depends on how well it integrates with your systems such as CRMs, ERPs, and cloud storage solutions.

API-first solutions like our AI Agents allow seamless integration with existing infrastructures.

Questions to consider:

• Does the tool offer an API-first approach?
• What systems and platforms do you currently use?
• Does it support cloud and on-premise storage?

A solution that integrates within your existing systems will reduce implementation time, minimize disruptions, and make your overall workflow more efficient.

3. Look for Scalability and Flexibility

As your business grows, your document automation work needs will evolve.

The right solution should be scalable, allowing you to handle larger volumes of documents and adapt to new document types or workflows as they arise.

Questions to consider:

• Can the tool scale as your business grows?
• Is the solution flexible enough to handle different types of documents?
• Does it support multiple languages or regions?

Flexible solutions such as our AI Agents can be combined to handle diverse document types and workflows across industries.

4. Focus on Accuracy and AI Capabilities

Accuracy is one of the main reasons businesses choose document automation.

Look for tools with strong AI capabilities, such as OCR, NLP, and machine learning. These can improve data extraction, categorization, and document accuracy.

Questions to consider:

• How accurate is the tool in extracting and categorizing data?
• Does the tool offer advanced AI capabilities?
• Can it handle a variety of document formats?

A highly accurate document automation solution will reduce errors in your documents, and ensure your business processes are efficient and reliable.

Document AI is a great example of such a solution as it can extract key data from a variety of formats, ensuring high levels of accuracy.

5. Evaluate User Experience and Ease of Use

Even the most advanced document automation tool will fail if it’s difficult for your team to use.

Therefore, ensure the tool has an intuitive interface that makes it easy for your team to adopt and work with.

Questions to consider:

• Is the tool user-friendly?
• Does it offer customization options?
• What kind of support and training does the provider offer?

An easy-to-use tool reduces the learning curve and ensures your team can adapt to the technology quickly.

6. Ensure Compliance and Security

Document automation tools often deal with sensitive data, so it’s important to choose a solution that meets compliance standards and offers robust security features.

This is especially true in industries like healthcare, finance, and insurance.

Questions to consider:

• Does the tool comply with industry regulations?
• What security measures are in place?
• Can the tool handle audit trails?

Ensuring compliance with regulations and security standards is critical to protect your business and maintain trust with customers.

7. Consider Cost and ROI

You should also consider the cost of the document automation tool and the return on investment. While automation can have upfront costs, it often leads to significant long-term savings through increased productivity, reduced errors, and lower operational costs.

Questions to consider:

• What is the total cost of ownership?
• What is the expected ROI?
• Are there hidden costs?

Choosing a solution that provides clear cost savings and high ROI is essential for justifying the investment.

To assess the potential ROI of our AI Agents, use our simple AI ROI calculator.

8. Seek a Provider with Proven Experience and Support

Choosing a provider with a strong track record and excellent customer support can make all the difference in a successful implementation.

Look for providers with experience in your industry and a proven ability to deliver high-quality solutions.

Questions to consider:

• Does the provider have experience in your industry?
• What kind of customer support do they offer?
• Can they offer case studies or references?

A trusted provider with industry experience and strong support will help ensure smooth implementation, as well as long-term success.

Tips for Implementing Document Automation

1. Start with a Clear Understanding of Your Objectives

Before diving into document automation, define your goals as this will guide your tool selection and implementation strategy.

‍Things to consider:

• Figure out specific problems you want to solve, such as reducing manual errors, speeding up processing, or improving compliance.
• Define key performance indicators (KPIs) to track your results, such as time saved per document processed, reduction in error rates, or faster customer response times.

2. Choose the Right Tools

Not all document automation tools are the same. Ensure your solution fits your business needs, workflow complexity, and document types.

Things to consider:

• Choose a solution that supports both structured and unstructured documents, especially if you handle diverse formats.
• Ensure that the tool can integrate into existing systems and scale with your business.

3. Start With a Pilot Program or a PoC

A pilot or a PoC lets you test document automation without fully committing to a large-scale implementation.

Pick a specific department or document type to start and find a vendor that allows modular implementation.

‍Things to consider:

• Identify a specific document workflow that is time-consuming or error-prone that’s ideal for automation with the selected tool.
• Monitor KPIs like time saved, accuracy improvements, and user satisfaction.

4. Train Your Team and Promote Adoption

Successful automation depends on how well your team adapts to the new system. Ensure that your employees are trained and ready to use new tools efficiently.

Things to consider:

• Offer your team comprehensive training sessions on how to use the automation tools effectively.
• Provide resources like FAQs, user guides, and video tutorials for ongoing support.
• Involve employees in the implementation process to foster a sense of ownership and ensure they understand the benefits of the automation tool.

5. Monitor Performance and Make Adjustments

Document automation requires ongoing monitoring and adjustment to ensure expected results.

Things to consider:

• Regularly track KPIs and use the data to identify areas for improvement or potential bottlenecks in the automation process.
• Continuously refine workflows based on feedback from users and performance metrics.

6. Measure the ROI

One of the most important aspects of implementing document automation is measuring the investment returns.

By understanding the financial impact, you can justify the initial investment and continuously improve the system for better results.

Things to consider:

• You can measure time savings, error reduction, productivity increase, cost reduction, and scalability and growth.

These can provide tangible evidence of the value of automation.

7. Ensure Compliance and Security Standards

As you automate document workflows, ensure that the tool you choose complies with industry regulations and maintains robust security standards.

Things to consider:

• Make sure the tool adheres to legal and regulatory standards such as GDPR, HIPAA, or financial regulations.
• Ensure the data is stored securely with encryption and access controls to protect sensitive information.
• Maintain audit trails and logs to track document processing and ensure transparency.

Automate Your Documents With AI

Looking for document automation solutions that can reduce your operational costs by up to 80% and help you generate more revenue? Please schedule a free 30-minute call with our experts.

We’ll show you how our AI Agents work live and explain how you can combine them for compounding gains.