Did you know that an average of 4 weeks is lost each year on misfiled, mislabeled, untracked, or lost documents?

To make things worse, a typical office worker makes around 61 trips per week to the fax machine, printer, and copier.

All this time is wasted on documentation, management, and other office tasks that can be automated.

However, now that automation is replacing several activities in workspaces, firms have been able to reduce the time and costs of processing data and have seen improvement in the general operations of their organization. 

Which is why document automation is such an important concept.

If you’re wondering whether or not document automation is right for you, how it works more practically, or how you can adapt it to your workplace, here’s what we’ll cover:

  • What Is Document Automation?
  • How Does Document Automation Work? 3 Steps To Consider
  • Is Document Automation Right For You?
  • Is Document Automation Right For You? 5+ Industries That Benefit The Most
  • 5 Essential Factors To Consider When Implementing Document Automation In Your Business

Let’s take a look.

What Is Document Automation?

Instead of performing our normal routine task of manually drafting files, document automation engages smart fields in generating electronic documents. 

For example, when we engage document automation software to create invoices, it simply adds information to already existing templates and disperses it to the designated addresses.  

Some of the most common document templates for automated PDF generation include:

  • Invoices and bills.
  • Cash receipts.
  • Financial statements.
  • Medical test results and reports.
  • Patient information records.
  • Confirmation letters.
  • Request forms.
  • Terms and conditions.
  • Agreement forms.
  • And more.

All these documents, of course, would be generated automatically and instantly, based on the customer information (e.g. name, address, contact info, etc.).

After updating such templates in the document automation software, the fields are filled with the appropriate information, then emailed to the intended recipients. 

the process of document automation

That way, you do not waste time inputting data and then separately drafting emails to your clients or customers.

Though document automation might be more effective in some industries than others, there are still certain documents you can put on autopilot so that you waste no time creating them manually.

We’ll take a look at the industries in more detail below, so, keep on reading.

Now, let’s take a look at how document automation works more practically.

How Does Document Automation Work? 3 Steps To Consider

Document automation generally generates electronic documents in 3 steps:

  1. Classification: This is where the machine sorts out the different types of data available and separates them into their befitting categories. For example, when differentiating invoices from receipts, the machine learns to recognize the layout of the documents’ pages.   
  2. Extraction: After classifying the documents, the machine extracts and converts the sorted data into machine-readable form. The document automation system (DMS) then interprets the data and decides the best form to display it in the processed document. A new document is generated from the extracted information.
  3. Validation: Here, the machine ensures that the extracted information is correct and useful. It compares some of the data processed from the prototype document. The new document’s information must correlate with the old one to a certain extent. If the output does not reach a certain percentage, the machine notifies a human to check the generated document before dispersing it to intended sources. Note that the likelihood of errors in newly derived documents is low. There is usually no need for humans to get involved during a document automation procedure. 

If you need more practical information on the tech that makes document automation and generation possible, see our full guide to document generation APIs.

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Is Document Automation Right For You? 5+ Industries That Benefit The Most

Document automation is suitable for businesses that need to create, sort, and share information at any point in their business. 

That is to say, if your work involves utilizing transaction-based documents, you should consider automating the derivation and dispersing processes. 

Any organization that works with documents, customer information, and fillable forms could use document automation to a degree.

Though, some of the most common industries that benefit from document automation include:

  • The financial industry.
  • The legal industry.
  • Healthcare sectors and organizations.
  • Government and public sectors.

Let’s take a look at each industry in detail.

1. Finance industry

Banks and other financial institutions understand the need to keep upgrading digitally to enhance their efficiency and help them stay in competitive markets. 

During the 2020 pandemic for instance, when there was a magnitude of loan applications for the paycheck protection program, some banks had to hire more staff to increase their efficiency rate.

However, other banks invested and relied on document automation instead. 

That was a much better option than hiring more labor. Those banks could speed up the loan application processing, save extra costs, gain more trust from their customers, and secure new prospects and clients. 

What would have been processed for about a year if manually processed took them three months utilizing document automation.

Document automation made it possible for the banks to collect, track, process, and share files with their customers all in one place. 

From there, the managers in charge of loans could easily check each client’s status and approve appropriate ones. The possibility of frictions happening during the processing of loan applications manually was eliminated and customers were satisfied. 

With a document automation system in place, both the banks and their customers benefit from it greatly. 

The simplicity of document automation operations assists financial institutions in eradicating the extra cost of training personnel or going through rigorous processes to process transaction documents. It also helps them generate more revenues for their business in the short and long run. 

Customers on the other end can have their applications processed faster without going back and forth during their processing.

For more information and examples on this, see our full guide to automated PDF generation for the financial industry.

2.  Law industry

In past times, lawyers spent most of their time within and beyond working hours drafting and sorting through various documents, struggling to meet deadlines before court dates. 

However, now, they can easily use existing files to generate templates and produce new legal documents in a few seconds!

Instead of drafting forms like NDAs, trust deeds, employment contracts, purchase agreements, and other contracts, document automation can help create new ones in a fraction of time.

It helps increase efficiency and profitability and reduces the likelihood of errors when drafting legal forms.

Additionally, contracts, agreements, and other forms of documents can remain confidential when processing them with DMS. There is no need to carry paper documents everywhere to the extent they suffer damage or get lost with automation software in place.

3. Healthcare sectors

Healthcare workers record patients' data in large quantities every day. 

They are also charged with the responsibility of keeping patients' data confidential, based on HIPAA compliance.

Manually, that can be very time-consuming and rigorous. However, having an automated system in place will help reduce the time spent on document processing. 

Document automation also allows healthcare workers to follow the HIPAA guidelines while deriving and sharing new documents. Patients can easily fill out digitized forms and receive medical alerts on their devices almost instantly, thanks to document automation.

Health workers can collect users’ data with a template deriving documents without redrafting them repeatedly. 

The documents will also come out error-free following the standard quality and content in due time.

With document automation, healthcare professionals can automatically generate documents such as:

  • HIPAA compliant patient information records.
  • Responsible and rights documents.
  • Informed patient consent.
  • Invoices and other financial documents.
  • Test results.
  • Insurance docs.
  • Standard communications.
  • And more.

4. Government 

All levels of government handle classified information almost all the time. 

Documents like those cannot be left hanging around in paper form carelessly without their content getting divulged to unintended people. Processing such documents in quantities is also quite a hassle. 

However, the appropriate government document automation system will help streamline operations, and reduce the cost and time of processing, while keeping its content confidential and up to standard. Also, the possibility of file loss is eradicated using document automation systems.

When the government disperses tax forms, Document automation can easily allow the form to be filled digitally, generate new, standard documents instantly, and share with intended people all in one place.

See how document generation and storage work for the public sector here for more info.

5 Essential Factors To Consider When Implementing Document Automation In Your Business

Finally, before we recap, here’s what you should consider before deciding on a document automation software:

  1. Recognize the issue: Examine your business to recognize which areas require the document automation solution. You have to discover the problems in your quest to choose the most suitable document automation software. You also have to consider your requirements and implementation needs.
  2. The document automation system integrations: The primary aim of engaging document automation in businesses is to streamline document processing as much as possible. Therefore, before selecting any DMS, ensure that it provides you with the necessary integration ability. That will help eliminate the need to use multiple systems and maintain consistency in your firm.
  3. Level of data security: One of the core functions of a DMS is document confidentiality as it is the requirement of many industries too. Ensure that whichever software you choose is from a trusted, verified, and credible vendor. That way, you can use a DMS for secure document management and delivery.
  4. The simplicity of the document automation operations: A DMS must have a comprehensive interface. Nobody wants to spend days learning how to use software without getting anywhere. Ask for a demo from the vendors of your DMS choice before subscribing to their services.
  5. Costs: It also helps to consider the total cost of using a DMS before subscribing to one. Some vendors include extra charges for trivial things like customer support and maintenance fees. Ask necessary questions such as the total expenses before choosing a software.


Investing in digital tools that optimize your organization's resources will help you stay strong in competitive industries. Regardless of your business size and complexity, there is always a technology tailored to ease your workload and increase profitability. 

Document automation software is available at different levels to tackle the hassles of fragmented systems in our various industries. Choosing a suitable DMS will help reduce the cost, time, workload, loss, damages, and frustration of sorting through the magnitude of papers and electronic files. 

Now, if you’re looking for more information on document automation and how you can automatically generate PDF documents based on customer info, you also might want to read:

Out-of-the-box PDF generation
The easiest way to automatically generate and manage paperless documents at scale.
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