# OCR (Optical Character Recognition)

> Optical character recognition (OCR) is technology that converts images of text, such as scanned documents, photos of receipts and image-based PDFs, into machine-readable text. Traditional OCR outputs characters and their positions on the page. Many current vision-capable language models can read document images directly and also interpret layout, tables and handwriting, which blurs the line between OCR and document understanding.

## Why it matters for your business

A lot of business paperwork still arrives as scans, faxes and phone photos, and none of it can be searched or automated until the text is extracted. OCR quality depends heavily on the input: skewed photos, low resolution, stamps and handwriting all reduce accuracy. OCR alone gives you text, not meaning, so a separate step is needed to decide which number is the invoice total. Modern pipelines pair OCR or a vision model with validation rules and a review queue for low-confidence fields.

## Example

A medical billing company receives explanation of benefits forms by fax. An automation converts each fax to an image, runs OCR and passes the text to a language model that extracts claim number, patient, allowed amount and denial codes. Fields that fail validation, such as a claim number not found in the billing system, go to a specialist for review.

Related terms: https://www.lumeor.studio/glossary/intelligent-document-processing/, https://www.lumeor.studio/glossary/structured-outputs/, https://www.lumeor.studio/glossary/human-in-the-loop/, https://www.lumeor.studio/glossary/rpa-robotic-process-automation/

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Source: https://www.lumeor.studio/glossary/ocr-optical-character-recognition/