Product Guides

How Does Document Automation Work? Complete Overview

June 3, 2022

Document automation is slowly evolving to become a necessary aspect of every company, regardless of size or industry. 

While the use cases and implementation of document automation might vary depending on the industry, there is no denying the benefits of document automation.

With it, we will see a shift in how the workflow is automated and how easy handling paperwork is becoming.

Did you know that the average office worker makes up to 61 trips per week to the fax machine, printer, copier, and so on?

And according to Gartner, on average, 4 weeks are lost each year on misfiled, mislabeled, untracked, or lost documents.

Meanwhile, with document automation, you can essentially automate most (if not all) steps of your document management and generation lifecycle. Such as:

  • Document creation.
  • Document storage.
  • Sharing and delivering to the right user.
  • Editing as needed with backup security options.
  • Compliant document archival or destruction as needed.

To help maximize your document automation efforts, here’s what we’ll cover below:

  • What Is Document Automation And How Does It Work?
  • 5 Key Benefits Of Document Automation
  • What Types Of Documents Can I Automate In My Company? 5 Industry Cases And Examples
  • How Do I Choose The Right Document Automation And Generation Software?

Now, let’s get started.

What Is Document Automation And How Does It Work?

Document automation refers to using specific software to create electronic documents for use in your company.

Also referred to as document assembly, these kinds of software use well-thought-out systems to extract pre-existing data in your company to create a new and easy-to-access document.

Here’s how document automation software works, exactly.

How does document automation work?

Depending on the document you wish to automate, there are three main steps to automation: extraction, validation, and enrichment processes. 

Like most software options, automation tools allow you to input a predetermined document automation word or trigger in the software to generate your preferred document. 

steps for document automatization
  • Extraction: This is the first stage of every document automation process as it involves the assembly of data from a manually created source. You can extract text and images from any document, be it a structured document like spreadsheets, semi-structured documents like invoices or order forms, or unstructured documents like contracts and letters. 
  • Validation: This stage of document automation verifies the quality and viability of the extracted data. Data validation depends on whether your company has internal guidelines regulating data quality, any business rules that determine the output of data in your specific industry, and any general regulations regarding public data.
  • Enrichment: This step involves the additional data you might want to add to your document. This data could be different elements or features relevant to the document in question. You can consider, for example, adding accounting entries in an invoice instead of having to manually input them every time you need to issue an invoice.

Be sure to read on for examples of the kind of documents you can automate at work below.

5 Key Benefits Of Document Automation

The benefits of automating documents vary from company to company and highly depend on industry requirements. 

Some companies may choose to automate their documents to boost their productivity, while others will do so to improve the consistency and validity of data in their documents.

Some of the biggest key benefits of document automation include:

  • Reducing errors and mistakes from human error in documents.
  • Saving you time from manually creating repetitive documents.
  • Improving the security of your sensitive information or restricted documents.
  • Easy collaboration with team members.
  • Saving money and storage

Now, let’s take a look at each benefit in detail with examples.

Reducing errors in documents:

When creating an automated document, you must set different fields with specific data requirements

The use of data-specific fields or templates reduces the risk of inputting erroneous data by having the data filled out digitally instead of manually, which may sometimes produce ineligible information in a document.

creating templates reduces the errors in future documents

Saving time

Automation provides you with a faster way of generating documents when you need them. 

Document automation tools come with a self-service portal that allows you and your colleagues to create documents you need when you need them without wasting time.

Improving the security of documents

Document automation tools are compliant with all the HIPAA and SOC2 document security regulations. 

An API or cloud-based document automation tool helps you generate documents in real-time, saves them in PDF format, and allows you to input the security measures you desire to keep sensitive documents safe from prying eyes.

Easy collaboration with team members

Using a document automation tool allows you to collaborate your workflows with your team members regardless of their location or time zones. 

This feature is critical in today's work from home society, as it allows you to work together irrespective of the distance. 

To understand the benefits of document automation from a more practical perspective, let’s take the example of the human resources department. The HR department is essential in every company and industry and requires critical adherence to labor and business laws.

When you automate the documents of your human resource department, your team then only needs to assess the hiring requirements as input in the document automation system to review the suitable applicants for a particular position in your company.

Once you and your team have decided on the right candidate, the automated document generator will generate a contract for the specific candidate for signing according to local labor laws, then store them in the requisite employee folder for future reference.

Increasing efficiency

When you reduce the amount of time spent on manual work, your team can spend that time gained on more productive and important tasks.

As a result of going paperless, clerical tasks and other day-to-day office activities that involve document management become automated.

For example, this includes document tasks like:

  • Filling in forms.
  • Printing and delivering documents.
  • Organizing files manually.
  • Tracking documents.
  • Managing paperwork manually.
  • And more.

Once all this is done automatically, you’ll see a boost in efficiency as well.

Now, to take a more hands-on approach to document automation, let’s take a look at some examples of the kind of documents that can be generated on autopilot, and in what industries.

Example by HubSpot.

efficiency is increased because documents can be generated on autopilot

What Types Of Documents Can I Automate In My Company? 5 Industry Cases And Examples

When you consider the documents to automate, an important thing to consider is how often they are required in your company. 

The documents that you need to draft weekly or daily should come first on your list.

You could also automate documents that require you to review the key terms often and those that need multiple approvals at a time. Documents that require you to copy-paste information manually from another source should also be on your consideration list, as automating them will reduce your total workload.

In a lot of cases, document automation is most prevalent in:

  • Legal firms.
  • Healthcare organizations.
  • Logistics.
  • In finance services.
  • Insurance firms.
  • And more.

Let’s take a look at some examples of document automation in each industry.

Out-of-the-box PDF generation
The easiest way to automatically generate and manage paperless documents at scale.
By submitting this form, I confirm that I have read and understood Inkit's Privacy Policy.
Oops! Something went wrong while submitting the form.

Document automation for legal firms

Facility agreements

Facility agreements are the contract agreements between borrowers and lenders that lawyers have to oversee every so often. Automating documents allows legal firms to generate easy-to-fill-out facility agreements when they need them.

Employment agreements

Employment agreements are binding contracts between an employer and employee, consulting firm, or freelancers. The employment agreements spell out the agreed terms of employment between the participating parties.

Share purchase agreements

This agreement is a legal contract indicating the mutual understanding between a buyer and a seller. The share purchase document shows the number of shares bought and the agreed price by both parties.

Document automation for health care organizations

Medical records

In a healthcare facility, patient records are created daily to capture a patient's name, date of birth, health complaints, tests taken, treatment given, and any other detail or note a doctor might need to record. Automating medical records allows for easy generation of a patient's medical history when required.

Prescriptions

Automating prescriptions makes dispensing them faster for both the pharmacy dept and the patients. 

Document automation for logistics

Logistics and supply chain operations use a variety of documents in their line of work. As such, it is essential to automate these documents to ensure error-free records of suppliers and payments and faster dispensation of products and services.

Some of the critical documents that you'd need to automate in a logistics firm include:

  • Account opening firms.
  • Invoices.
  • Bill of lading.
  • Delivery forms. 
  • Arrival forms.
  • Content forms.
  • Supplier code of conduct.
  • Master service agreements.
  • Packing lists.

Document automation for finance brands

Finance operations also need to automate the documents they use daily to make it easy for them to retain detailed and error-free records of their operations. The commonly automated document in a finance firm include:

  • Invoices.
  • Order forms.
  • Purchase orders.
  • Bill of lading.

For a more detailed breakdown of document generation and automation in finances, see our guide on automated PDF generation for finance institutions.

Document automation for insurance firms

Insurance firms also receive and issue documents daily. It is crucial to ensure that the information captured in the documents is accurate as agreed by the insurer and the insured to avoid legal complications in the future.

Some of the documents an insurance firm needs to automate include:

  • Policy documents.
  • Invoices.
  • Medical reports.

Wondering what are some other document types that can be automatically generated?

See our full guide on document templates for automated PDF generation for more info.

Now, let’s talk document automation tools.

How Do I Choose The Right Document Automation And Generation Software?

The right document automation tool should ensure the correct information is captured in a document and that documents are processed in the quickest time possible to maximize customer satisfaction. 

Some of the main features you should consider in a document automation tool include:

  • Intelligent Content Management: Consider a document automation tool that can enforce the data accuracy rules, compliance requirements, and the brand standards of your company as you have set them in all your documents. A good automation tool should sync any edits you or your team members make on a document and make the necessary updates on the data source and all accounts. It should also update templates as and when you need them while helping you tailor workflows for you and your team members.
  • Mobile Access: Having mobile access to your documents allows you to accomplish your tasks even when on the move. Consider a document automation tool that will enable you to input data, make presentations and share your documents from your mobile phone.
  • Integration with existing software: Choose a document automation tool that integrates with other software in your company. Integration with other software, for example, your CRM or analytics software, ensures that the automation can extract the correct data to be included in a document as and when you need it.
  • Built-in-analytics: A document automation tool with built-in analytics helps you capture important data about your customers. You can then repurpose this data to market your brand in targeted ads and measure your company's performance in specific fields or demographics.

Finally, before we wrap up, be sure to go over some potential paperless software challenges and their solutions as well.

Where To Go From Here

For enhanced document security across the board, consider Inkit Render, an API or cloud-based document automation tool that ensures your company or client's data is secure and compliant with all industry and company regulations. 

Inkit Render converts HTML documents to PDF-based through a real-time web browser for enhanced document security. It integrates well with other software in your company as it has a wide range of software language reading capabilities.

Alternatively, if you need more information on how document generation works tech-wise, see our guide on document generation APIs.

Out-of-the-box PDF generation
The easiest way to automatically generate and manage paperless documents at scale.
By submitting this form, I confirm that I have read and understood Inkit's Privacy Policy.
Oops! Something went wrong while submitting the form.