An apparatus is provided for sorting a group of documents contained with an envelope into selected batches of documents. An envelope feeder feeds a group of envelopes containing documents onto a document transport. A document extractor positioned along the path of movement extracts the documents from the envelopes. A system controller identifies the documents extracted from each respective envelope as a single transaction along the path of movement. An orientation detector including a magnetic image reader and an optical image reader determines the orientation of selected documents along the path of movement. A document orientor changes the orientation of documents along the path of movement into a desired orientation. A document feeder is positioned downstream from the envelope feeder to selectively feed batch identification pieces into the path of movement. An image acquisition device acquires an image of the batch identification pieces and selected documents conveyed along the path of movement to enable the system controller to assign documents of selected transactions into selected batches. A non-volatile image storage medium stores the acquired images of the selected documents. A document sorter sorts the documents of respective batches into selected output areas.