How does intelligent document processing work?

Intelligent document processing (IDP) combines technologies like artificial intelligence (AI) and optical character recognition (OCR) to streamline the management of documents. Imagine you have a pile of physical receipts, digital reports, PDFs, and scanned images containing critical information. Going through them one by one to organize the information or find what you need would take a lot of time. This is where IDP steps in — just like a smart assistant that performs these tasks in seconds.
For businesses, content is the lifeblood of decision-making and work processes. Relying on manual tasks to use and manage content — typing in data or tagging files — can lead to mistakes and slowdowns, something IDP helps overcome with automation.
To understand the mechanics of IDP, let’s review its definition, benefits, applications, and how AI and other technologies enable intelligent document analysis, classification, and data extraction.
What is intelligent document processing?
Intelligent document processing is a technology that automates the extraction, classification, and analysis of data from documents. Unlike traditional document processing, which can only “scan” content and capture text or numbers, IDP extracts relevant information, classifies it, and even verifies its accuracy against databases and document management systems.

If you deal with large amounts of paper contracts or scanned policies, you know how overwhelming it can be to manually review each one. IDP simplifies this process by automatically digitizing documents, extracting key information with AI, validating accuracy, and organizing everything for quick access and easy integration into your systems.
Even though it’s often mistaken for automated document processing (ADP), IDP goes beyond basic automation by enabling you to instantly pull out terms and clauses from an extensive contract, for example — something that traditional ADP, which typically handles simpler tasks like document sorting, can’t do.
OCR, RPA, and IDP: Understand the differences
IDP solutions integrate different technologies to ensure reliable and efficient document processing, which can sometimes create confusion about their roles. Here’s a breakdown:
- Optical character recognition converts scanned or image-based documents into machine-readable text, making printed or handwritten content accessible for further processing — helpful when you need to quickly turn old files into editable formats
- Robotic process automation (RPA) automates repetitive tasks, such as transferring extracted data into other systems, reducing the risk of human error
- Computer vision analyzes data from images or videos, collecting information that is difficult for OCR alone to process, such as handwritten characters, logos, and signatures
- Artificial intelligence includes AI subsets like machine learning and natural language processing (NLP) to help analyze document content and make decisions based on context
OCR and RPA are components of document processing automation, which pull information from structured documents like spreadsheets or forms and enter it into systems. IDP goes beyond that. By integrating AI, you retrieve information hidden in unstructured data — documents that don’t follow a clear, predefined format.

Unstructured data accounts for the majority of business content — precisely 90%, according to a Box-sponsored IDC survey. To access the real value of your content, you need IDP software that enhances search capabilities, automates data classification, and delivers precise content analysis. With AI, these tasks happen automatically, streamlining business workflows and enhancing efficiency.
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Advantages of adopting IDP solutions
IDP platforms can perform many tasks simultaneously, supporting areas that handle terabytes of content, such as human resources, accounting, marketing, and more. Implementing these solutions helps cut costs in document management while scaling your content operations.

The top benefits of investing in IDP software include:
- Faster document processing: Imagine having to manually sort through hundreds of files in cloud-based data storage to find a specific section in a sales contract. With IDP, you save time by searching terms and phrases across multiple documents and getting instant, precise results — often without even opening the files.
- Data and metadata extraction: Advanced IDP solutions extract data and metadata from contracts, policies, and other documents. This capability allows you to search, organize, and analyze critical information faster than traditional methods, saving time on manual data entry and content review.
- Improved content accuracy: With advanced AI models, IDP verifies the precision of the data you collect from documents like reports or forms, reducing human errors such as typing numbers incorrectly, misclassifying data, and duplicating information.
- Enhanced information security: While traditional solutions often lack features to prevent cyberattacks and data breaches, IDP tools protect documents during processing with audit trails, granular permissions, file encryption, and other measures against these threats. Adding these layers of security helps comply with data privacy regulations, safeguarding your business from potential fines and reputational damage.
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How AI document processing works
Organizations are using AI in more business functions than ever — according to McKinsey, 50% of surveyed companies leverage this technology in two or more functions. Intelligent document processing software uses AI to speed up various tasks across the document management process, such as importing content to a cloud system and generating insights from data.

Here’s how an intelligent document processing platform typically works.
Document ingestion
This is the moment when you import documents, whether digital or physical, into your content management system using an IDP tool. For example, you might process scanned paper invoices and agreements as part of your contract management process.
Document ingestion captures all these documents, converting them into a digital format that the system can understand. And if you handle invoices every day, you can use OCR to extract numbers and amounts from these files — and turn them into metadata with the power of AI (eliminating the need for manual data entry).
Document classification
Once documents are in the IDP system, the next step is categorizing them based on their content. AI analyzes the structure and content of each document to determine its type, whether it’s a purchase order, a financial report, or a marketing presentation.
This step determines how IDP will process the document in subsequent steps. For example, a purchase order may require extraction of item details for order fulfillment, while a financial report might need data validation for accuracy.
Data extraction
After classifying the document, the AI extracts relevant data and metadata. Through IDP automation, AI detects and pulls out core information such as dates, names, and addresses, as well as metadata like document type, author, or creation date. This information can give your business insights into trends, customer behavior, and efficiency, leading to better data-driven decisions.
Automated data extraction handles both structured and unstructured data. The only difference is that unstructured document processing converts data into a structured format, making it suitable for analysis and integration into business applications.
Data validation
In this step, AI compares the extracted data against predefined rules or cross-references it with other databases to ensure its accuracy. For example, if the intelligent document processing solution captures information from an onboarding guide, it may use metadata to identify errors or inconsistencies, alerting the HR team to address them.
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Workflow automation and integration
AI-powered document processing can also integrate with other platforms and digital workflow automation.
Once you process a document, the data populates the relevant fields in your CRM, project management software, or document management system. For example, you can automatically send a contract to the legal team for review, speeding up the approval process.
Continuous learning
Thanks to technologies like ML and NLP, IDP improves over time through continuous learning. The more documents the system handles, the more accurate its classifications, extractions, and validations become. The right IDP vendor choice helps ensure regular updates, AI model refinement, and adaptation to new document formats, maintaining accuracy and efficiency.
Top IDP use cases to watch
Fortune Business Insights forecasts the global intelligent document processing market to expand from $7.89B in 2024 to $66.68B in 2032, growing at a CAGR of 30.6% during the period. According to the research, IDP is a growth driver of enterprise AI adoption, particularly in industries that handle large volumes of data and complex documents.
Get inspired by these diverse IDP use cases.
Industry | Intelligent document processing use cases |
Financial services |
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Healthcare |
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Legal |
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Government |
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Human resources |
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Retail |
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Discover the potential of an IDP platform with Box
With Box, you gain a secure, all-in-one platform to create, store, and manage your documents. Our Intelligent Content Management platform empowers you to mine insights from unstructured data using advanced AI models.
Box AI integrates IDP capabilities, enabling you to automate metadata extraction from your business documents and analyze critical information from your content, streamlining workflows and processes across your company’s departments.
With enterprise-grade security features like encryption, advanced authentication, and password protection, you have peace of mind knowing your sensitive data is secure and compliant with industry standards. You can also connect Box with 1,500+ applications, including productivity suites, CRM platforms, communication software, and every other tool you use to keep your workflow seamless.
Contact us today to discover how Box AI simplifies intelligent document processing.
*While we maintain our steadfast commitment to offering products and services with best-in-class privacy, security, and compliance, the information provided in this blog post is not intended to constitute legal advice. We strongly encourage prospective and current customers to perform their own due diligence when assessing compliance with applicable laws.