Microsoft OCR: How to get it, costs, and alternatives

Optical Character Recognition (OCR) technology plays a key role in how businesses extract and process information from documents. Microsoft offers various OCR solutions, from AI-powered tools to ERP integrations, allowing businesses to capture and utilize document data efficiently. But while some OCR features work well for basic data extraction, many businesses turn to third-party solutions for full accounts payable automation.

Here’s how Microsoft’s OCR works, which ERPs include it, and how businesses can use third-party solutions for enhanced AP automation.

What is Microsoft OCR?

Microsoft provides OCR across its ecosystem, including built-in ERP capabilities in Dynamics 365 Finance, and AI-driven cloud services through Azure. When it comes to business use cases, Microsoft’s AP automation functions offer OCR in various forms, allowing businesses to extract data from invoices and reduce manual entry.

Do Microsoft ERPs include OCR?

Microsoft ERPs offer OCR capabilities, but only Dynamics 365 Finance includes OCR natively as part of its accounts payable automation features. Other ERPs, such as Dynamics 365 Business Central, do not have built-in OCR and require third-party add-ons or integrations within the Microsoft ecosystem to enable document processing.

Here’s a breakdown of how OCR is implemented across Microsoft’s ERP products.

OCR for Microsoft Dynamics 365 Finance

Dynamics 365 Finance includes built-in OCR for accounts payable automation, allowing businesses to scan invoices, extract key data, and automate invoice processing within the ERP.

Dynamics 365 Finance provides native OCR that uses AI-driven enhancements to streamline AP workflows and reduce manual intervention. Additionally, businesses can integrate Microsoft ecosystem tools or third-party solutions for more advanced automation.

Key OCR capabilities include:

• AI-powered invoice capture: Automates invoice scanning and data extraction, minimizing manual data entry in AP workflows
• Copilot AI integration: Uses AI to assist in AP workflows while OCR capabilities for vendor recognition and invoice extraction are powered by AI Builder or third-party integrations
• Flexible enhancements: Supports Power Automate and can integrate with third-party tools for extended OCR capabilities

OCR for Microsoft Dynamics 365 Business Central

Unlike Dynamics 365 Finance, Business Central does not include built-in OCR. Businesses that want to automate invoice scanning and data extraction must use third-party OCR add-ons to enable this functionality.

Because Business Central lacks native OCR, companies must integrate Microsoft’s ecosystem tools or third-party solutions to enable document processing and automate invoice capture.

Key OCR options include:

• Microsoft Power Automate support: Business Central can connect with Power Automate for basic OCR functionality, such as extracting text from invoices and pushing data into workflows
• Third-party AP automation with OCR: Third-party OCR tools convert scanned invoices into structured data, helping Business Central users reduce manual data entry and streamline processing

Cost of OCR for Microsoft ERPs

Dynamics 365 Finance users get OCR at no extra cost, though some may opt for third-party tools for advanced automation. Business Central users have to purchase a separate OCR add-on, as the ERP does not have built-in OCR. If businesses choose to integrate with standalone OCR solutions within Microsoft’s ecosystem, this may add additional costs.

What are the benefits of invoice capture and OCR?

Beyond automation, OCR solutions improve efficiency and accuracy in document processing across various business functions. Here’s what businesses can expect:

• Speeds up data processing: Automated text extraction reduces manual input time, improving workflow efficiency
• Minimizes human errors: By eliminating manual data entry, OCR lowers the risk of typos and inconsistencies
• Enhances document accessibility: Converts scanned files into searchable and editable formats, making information easier to retrieve
• Optimizes resource allocation: Reduces reliance on manual labor for document processing, allowing teams to focus on higher-value tasks

Challenges of using Microsoft OCR solutions

While Microsoft’s standalone OCR solutions offer powerful document processing capabilities, some businesses face limitations that impact usability and cost-effectiveness. Based on user feedback from G2, here are some challenges to consider:

1. Pricing

For many businesses, especially startups and small companies, the cost of Azure AI can be a major barrier. Reviewers note that pricing can become expensive, particularly for businesses processing large document volumes. Creating custom models may also require significant time and expertise, further increasing costs.

These factors make Microsoft’s OCR solutions less accessible for businesses with tighter budgets or lower technical resources.

2. Learning curve and usability

While Microsoft’s OCR technology is powerful, users report that training these models is time-consuming and can be complex, particularly for businesses without dedicated specialists.

Reviewers say that highly variable document layouts may have limited support for different languages, making it challenging for businesses that process diverse document types. Performance issues with low-quality scans or handwritten documents can also impact extraction accuracy.

For businesses considering Microsoft’s standalone OCR solutions, it’s important to weigh these factors against their document processing needs and technical capabilities.

How to choose the right OCR software

Selecting the right OCR software goes beyond basic text recognition—it should improve efficiency, reduce manual effort, and integrate seamlessly with your existing workflows. Whether you're implementing OCR for the first time or upgrading to a more advanced solution, understanding key factors will help you make an informed decision.

Here are five essential aspects to consider when evaluating OCR software:

1. Intelligent invoice scanning and OCR automation

A strong OCR solution should extract key details with minimal errors, reducing manual verification. AI-powered OCR improves over time, enhancing accuracy and minimizing the need for corrections.

Look for a tool that supports:

• Multiple document types, including PDFs, scanned images, and structured forms
• Automatic text extraction with high accuracy
• Machine learning capabilities to adapt to recurring document formats

2. Seamless integration with existing systems

OCR software should fit into your current workflow without requiring manual data transfers or extra processing steps. It should integrate with ERPs, document management systems, and accounting platforms to keep data synchronized and minimize disruptions.

Look for a solution that allows extracted data to flow directly into your systems, supports automated approvals, and improves classification for faster processing. A well-integrated OCR tool eliminates bottlenecks and ensures smoother document handling across departments.

3. Compliance, security, and fraud prevention

Since OCR handles sensitive financial data, security and compliance are essential. Choose a solution that:

• Encrypts data to protect against unauthorized access
• Provides audit trails to ensure compliance and transparency
• Detects duplicate or fraudulent documents before processing

4. Scalability and processing efficiency

A good OCR solution should meet your current needs while having the ability to scale as your business grows. Consider whether the software can process high volumes of documents quickly without sacrificing accuracy.

Cloud-based options can provide more flexibility and scalability, allowing businesses to expand without investing in costly infrastructure. Customization features are also important for companies with industry-specific document formats, ensuring the software can adapt as processing needs evolve.

5. Cost, scalability, and ease of adoption

An effective OCR solution should provide value without excessive complexity or hidden costs. Consider:

• Pricing model: Is it based on pay-per-use, subscription, or one-time fees?
• Scalability: Can it handle increasing invoice volumes efficiently?
• Interface: Is there a user-friendly interface available to minimize training time?

By prioritizing accuracy, integration, scalability, security, and cost, businesses can ensure they select an OCR solution that enhances efficiency without disrupting existing processes.

How Ramp Bill Pay provides advanced OCR capabilities

Before choosing an invoice capture and OCR solution, it's important to assess whether it fits your business requirements—whether you use a Microsoft ERP or not. Ramp Bill Pay streamlines AP automation by combining invoice scanning, OCR, and payment processing into a unified workflow, helping businesses manage their accounts payable with accuracy.

Here are the key features Ramp Bill Pay provides:

Additional features for businesses using Microsoft Business Central with Ramp

Beyond these core capabilities, Ramp also offers deeper automation and customization to optimize Microsoft Business Central workflows:

• Vendor creation: Ramp identifies vendors missing from your Business Central instance and provides the option to add them directly
• Chart of accounts and dimensions: Ramp imports all fields, including dimensions, from Business Central, ensuring detailed and accurate transaction coding
• Multi-entity support: For customers using Microsoft Business Central with the supported multi-entity management extension, Ramp enables streamlined management of multiple entities within the integration
• Project general ledger journals: Ramp supports Project G/L Journals, a subtype of General Journals. These allow project details to appear by default within the Business Central UI, offering greater visibility into project-related transactions

With these features, Ramp serves as both a standalone AP automation platform and a Microsoft integration, offering deeper functionality than just standalone OCR solutions.

Why choosing the right OCR solution matters

An effective OCR solution should easily integrate with your AP workflows, minimize inefficiencies, and adapt as your business grows. While Microsoft offers various tools for invoice processing, businesses can gain great flexibility with third-party solutions to further enhance AP automation.

That’s why over 7,000 businesses trust Ramp to accelerate AP processes and reduce errors. Frank Byers, Controller at The Second City, shared his experience:

“When we moved to (Ramp) Bill Pay, I was hesitant because we were promised the same type of functionality as our previous technology, which didn’t work. But Ramp’s OCR works seamlessly—it not only recognizes the vendor but reads each individual line item and uses accounting rules to code them correctly.”

And Alejandro, CFO at Roof Squad, also saw a major improvement:

“The way bill pay works now is super easy. That was such a tedious process before. Now it’s just a couple clicks away, saving us about 10 hours a week, and reducing the number of errors we make.”

A well-designed AP system with invoice capture and OCR leads to faster approvals, fewer manual corrections, and a more efficient workflow.

See the difference for yourself—streamline invoice processing with Ramp Bill Pay.