How to Avoid Data Entry Mistakes

Ira Brooker    Written: May 4th, 2017    Updated: March 28th, 2023

How to Avoid Data Entry Mistakes

Data entry tasks tend to rank lower on the list of business operational priorities but it is still one of the most critical day-to-day operations for companies across every industry. Everything from customer and sales data to financial information relies heavily on data entry, meaning a single error can have huge ramifications for your company.

Wherever a company employs people, there’s the potential for human error, and data entry errors are some of the costliest errors to companies. Fortunately, there are many ways to avoid data input errors and promote accuracy among employees.

By understanding why manual data entry errors happen and learning ways to avoid them, your company can more efficiently reduce entry errors and enhance data integrity across your enterprise. Getting effective data entry software that can capture documents, automate workflow or assist mobile transactions ensures the data entry does not get overlooked or forgotten.

Gina Armada Headshot Simply put, automation is the key to an agile and scalable AP automation operation. As technology advances, finance leadership will further understand the importance of investing in a solution that allows their AP team to go from transactional to strategic.  
Gina Armada, CEO MHC

The State of Data Entry in 2023

A lot has changed since we last explored this topic in 2017. Advancements in technology and the shift to remote work during the pandemic have changed the way many businesses approach data entry. Even with the broad applications of operational automation, however, many data entry positions are still held by humans. Before we get into data entry advice, let’s assess the current state of data entry.

Manual Data Entry in 2023

Even with advancements in automated data entry becoming widely available, there are a number of industries where the old methods are still in regular use.  For example, a 2022 study found that nearly 40% of healthcare employers still relied on manual data entry, with similar numbers reporting that they often have difficulty manually locating the data they need when they need it. In the manufacturing sector, automation is advancing rapidly, but around 10% of businesses have yet to make the move to digitization, while 30% lack an ERP solution.

There are several reasons why a business might choose to stick to outdated manual data entry methods even in the modern era. For a very small business that doesn’t deal with a high volume of invoices or transactions, entering data by hand may simply be the easiest and most cost effective option. For organizations dealing with highly sensitive information, sticking to a manual data entry and storage system might be a guard against cyberattacks and data theft. And some businesses may simply not have the funds on hand to make the initial investment in an automated solution. For most organizations, though, the benefits of automation far outweigh the drawbacks.

Automated Data Entry in 2023

Automated data entry technology has seen major advancements in recent years, as more processes that once required time-consuming and error-prone manual approaches have begun to fall under the scope of automation. Much of the recent boom in data entry automation has been powered by advancements in two key technologies:

Optical Character Recognition (OCR)

Optical character recognition is a software tool that can automatically pull important data documents of many different kinds, including PDF documents, Microsoft Word documents, Microsoft Excel spreadsheets, emails, faxes, and even scans of paper documents. That data is then entered into your accounts payable system automatically, allowing you to receive a document, extract data, and route it for processing without a single human touchpoint.

3-Way Matching

One of the most important steps in invoice processing is also one of the most difficult to handle manually. Before an invoice can be paid, the accounts payable team needs to verify that all of its data matches the information on the corresponding purchase order and receipt of goods or services. That requires a tedious and painstaking process of comparing each document against two others, and a laborious re-routing process if errors are identified. Automated software with OCR capability can compare that same information in a fraction of the time and even automatically re-route any errors or exceptions.

Common Data Entry Errors

No matter how much your employees double-check their work, mistakes always slip through the cracks. Though your staff should understand the importance of accuracy for your company’s operational efficiency, fatigue or simple slip-ups can result in the occasional error. The most common of these mistakes are transcription and transposition errors:

Transcription Errors

These types of errors occur when information is input the wrong way and tends to be more common when transcribing words rather than numerical data. This kind of mistake includes typos, repetition and deletion. Transcription is an especially common problem when employees type quickly — if they hit the wrong key, it’s too easy for them not to notice. This kind of error is also common in word processing programs that automatically correct words within certain contexts, such as Microsoft Word.

Transposition Errors

This type of mistake occurs when information is input in the wrong order and tends to happen when people type numbers rather than words. For example, instead of typing 123, the employee types 132. Again, this is a frequent error for employees who type too quickly to notice mistakes as they go.

Common Data Entry Errors in Accounting

Much of the data your AP team deals with is specific to the accounting process. That means that many of the data entry errors they deal with are too. Along with errors in transcription and transposition, a few of the most common accounting errors include:

Entering data in the wrong account

Omitting an entry

Recording unnecessary data

Incorrect classification of expenses

Data entry mistakes in accounting carry a number of unique and potentially costly risks for an organization. That includes late payments and missed payments, both of which can trigger penalties and fees from your suppliers. Even worse in the long run, those penalties damage your organization’s working relationship with valued vendors. Maintaining strong vendor relationships is a huge part of keeping your operations running smoothly.

Duplicate payments are another major pitfall of accounting errors, and a surprisingly common one. “Companies are getting about 25% of all invoices sent twice,” noted AP Now founder Mary Schaeffer in the 2022 webinar on duplicate payments she hosted with MHC.

Not only are duplicated invoices an embarrassment for businesses, they can also be time-consuming and expensive to correct. Schaeffer endorses zeroing in on eliminating duplicate payments as a strong security measure that helps boost accounts payable security across the board.  “Anything you do to prevent or guard against duplicate payments will also guard against fraud,” she cites as one key example.

Although most employees make these data entry mistakes in good faith, their errors can still result in severe consequences for your company. Inaccurate data can take time and resources to correct, and if left uncorrected can lead to lost profits, lost business and even lawsuits. With your company planning strategies around your data, it’s more important than ever to reduce human error in data entry.

While errors are inevitable, you can minimize their occurrence and their effects on your business by implementing some simple business practices. Below, we’ve outlined how to avoid document input mistakes through managing your employees, as well as how to make data input faster and more efficient through process management.

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How to Prevent Data Entry Mistakes

The old adage about an ounce of prevention being worth a pound of cure holds true in the world of accounts payable. It is almost always more efficient and cost-effective for a business to take steps toward preventing data entry mistakes than it is to go back and fix those errors after the fact. When putting together a plan for preventing data entry errors, there are two key areas that can make a huge difference: Employee management and process management.

Prevent Data Entry Errors Through Employee Management

Avoiding errors often comes down to the employees. While some mistakes now and then are to be expected, major errors should never be the norm within your company. Fortunately, your business can take some necessary steps to help make sure your employees are equipped to minimize errors on their end.

1. Train Them on the Importance of Data

The first step for avoiding data entry errors is to express to employees how valuable the information is. Before employees start entering data, you must train them on why this information is so important and how inaccuracy can negatively affect the business. This basic understanding of the relevance and importance of their position helps employees feel more responsible for the data, improving their overall effectiveness and accuracy.

2. Provide a Good Working Environment

Discomfort, fatigue and other factors can severely impair an employee’s ability to work accurately. Eyestrain can result in employees’ vision becoming impaired, while fatigue from muscle strain can lead to them pressing the wrong keys. To help combat these problems, your company should:

  • Provide employees with a comfortable and healthy space.
  • Offer them regular breaks to refresh and reset before they return to work.
  • Buy ergonomic chairs and wrist support to help reduce muscle fatigue.
  • Add appropriate lighting and computer monitors with reduced glare to minimize eyestrain.

Enforcing proper office ergonomics can result in your employees working more accurately and for longer periods.

3. Avoid Overloading

While it is always good to have goals for your team, setting unrealistic ones can put undue stress on them. The manager in charge of a team should be sure to set realistic targets since people can only do so much within a day. Putting too much pressure on employees to meet an unrealistic goal can result in them working too fast, tiring too quickly and making more mistakes. If there’s more work to be done, delegate it appropriately while allowing for appropriate deadlines, so employees don’t feel rushed.

4. Hire Sufficient Staff

No matter how efficient or capable your employees may be, they have their limits. When overworked or pushed past their capacity, they are more likely to commit mistakes. You should always have enough employees on staff to handle the incoming workload.

The longer and more often you overwork employees, the more frequent those mistakes will be. In addition to causing problems for your company, this constant overload can make employees resentful, contributing to employee turnover. To keep everyone happy, keep enough people on staff to handle the amount of work the company needs to get done.

5. Prioritize Accuracy Over Speed

While speed is a good thing to emphasize to keep workflow going, accuracy is of more importance when it comes to data entry. Rushing a task as detail-oriented as data entry is bound to end in more errors. Instead, focus on accuracy as their primary objective by setting accuracy goals for your team. These should be realistic goals upon which managers base employee evaluations. Though work speed should also be evaluated, the majority of focus should be on doing the job correctly if you want to foster a more accuracy-oriented work environment.

6. Use Software Tools

When possible, make the most of the software on hand. Intelligent Character Recognition (ICR) and Optical Character Recognition (OCR) technology, among other similar software tools, helps reduce the amount of work for your data entry employees by automatically extracting data.

While this doesn’t get rid of their job entirely, it helps your employees by reducing their workload, reducing the chances for them to make mistakes and allowing them more time to read and analyze the data. Other useful software tools include automatic error reports, which can check the input data to make sure it fits specified parameters. For example, if an entered social security number falls short of the required nine digits, a pop-up on the system can alert the employee to the error so they can fix it immediately.

7. Double-Check Work

Double-checking all completed work should always be standard operating procedure, especially for data entry positions. The data entry process should involve a senior employee or manager to double-check the work to make sure that it is accurate. While this may not always be feasible when it comes to large amounts of data, regular detailed checks can identify areas of potential improvement. These controls can also assist in determining areas where the company could update its systems to help simplify employee processes.

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Reduce Data Entry Errors and Enhance Data Integrity
Through Process Management

While employees tend to be the primary perpetrators of mistakes, inefficient or redundant processes can be equally to blame. By streamlining your company processes, you can begin reducing human error in data entry.

1. Identify Primary Sources of Inaccuracies

One of the first steps to fixing your processes is identifying where the sticking points are. Look at data entry errors, statistics, and patterns to determine the primary internal and external sources of data inaccuracy. Finding these patterns can help point to the sources of error, which you can then go about fixing with changes to either processes or management techniques.

You’ll also want to keep track of what processing task each clerk or FTE is responsible for. The employee taking on the paper trail of a misclassified non-PO invoice is going to spend a lot more time on their work than the downstream employee who simply gives a final invoice review and approval.

While a general sense of invoice numbers is a fundamental KPI for accounts payable departments, deeper FTE-task specific data points can help you identify things such as:

  • Which suppliers bottleneck your operations or cause you the most process interruptions.
  • Which software tools help or hinder the end-to-end process.
  • Which employees face the most ad-hoc, unstructured tasks.
  • Which employees are the top processors, relative to their role in the workflow.
  • Ask those top employees to share tips to assist the entire team with boosting their performance.

2. Use Data Profiling

Data profiling, in essence, is the process of analyzing data to make sure it is:

  • Complete
  • Correct
  • Unique
  • Reasonable
  • Consistent

This type of analysis helps find defects in the presented data by sensing values that fall outside of an accepted range or established pattern. Data profiling programs identify these potentially incorrect values and keep them from flowing downstream by flagging them for review. This helps prevent companies from working with potentially incorrect data.

3. Perform Causal Analysis

In addition to data profiling, companies should use an error analysis process to analyze the targeted data. There are two primary methodologies for performing error analyses:

  • Error cluster analysis tries to narrow down the sources of errors by analyzing the inaccurate data set to identify the error of origin.
  • Data event analysis studies events where data is created and changed to try to determine the cause of the problem. Both are valuable methodologies that can be used together or separately, depending on the goal of your analytical program.

4. Reduce Data Redundancy

Entering information is a time-consuming process for your employees, so lessening the amount of useless data they need to input can benefit them immensely. Cut out any unnecessary data, so only useful data is processed. One of the best ways to do this is by regularly reviewing and revising your forms and documents to check that all the requested data is relevant and necessary for your business processes.

Forms that require unnecessary data should be revised so redundant or irrelevant data is removed. But how can forms help us reduce data-entry errors, you may wonder. By eliminating redundant or unnecessary forms, you minimize the possibility for double-entry and cut down the amount of data your employees need to process. This reduces the chances for your employees to input errors in the system.

5. Standardize Processes

Standardizing both your data collection and data entry processes helps improve your overall accuracy and consistency. By maintaining standard processes, your employees know what to expect and look for with each form, and they know what protocols to follow. This helps them fall into a pattern of operation, allowing them to work both quickly and accurately. In addition to being helpful for your employees, standardization is necessary if you’re looking to automate any of your data entry processes.

6. Monitor Progress

Whenever you change any process, you should never stop monitoring your error reports and error patterns. Continuous monitoring of these reports helps your company identify the success of any improved processes, as well as any additional room for improvement. Monitoring also helps prevent further mistakes and acts as an efficient feedback system for both the company and its employees. As a whole, this continuous cycle of surveillance and improvement can help your business create the most effective and accurate system possible.

7. Enable Automation

Entering data manually is expensive in both labor and company resource allocation. Additionally, the monotony of the work makes it a highly error-prone job with a high turnover rate. To help combat the costs associated with manual data entry tasks, automating as many data entry processes as possible is the best way to go.

Data capture via OCR and ICR systems, as described in the previous section, can help your employees in the work they already do, while complete data entry automation packages can replace some of your data entry workers altogether. Many of the daily tasks associated with data entry are tedious and repetitive, making it difficult for employees to stay engaged with their work. That can lead to more human error, more risk of fraud, and lower employee retention. With these automated systems, you remove the human factor, reducing errors, labor costs and long-term risks to your organization.

8. Regularly Update Automated Systems

If you do use an automated system, make sure you upgrade the system on a regular basis. Data harvesting and analytic functions are often updated by their programmers to fit current industry standards. Without these updates, automated programs are more likely to make mistakes or become vulnerable to viruses or malware. To avoid these problems, update your software whenever a new version comes out. At the very least, update your software when major updates come out to fit new standards within your industry.

Eliminate Data Entry Mistakes with MHC NorthStar!

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If you’re looking for a quality system to help minimize your manual data entry needs, MHC NorthStar is the automated software solution for you. MHC NorthStar is a user-friendly software solution that can be used on any platform, allowing you to integrate MHC into your current business operations immediately. The system helps your company manage its workflow more efficiently by automating data entry and collection processes, giving you results without the labor expenses.

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