You know automation could save time. But how much? And is it worth the investment? Here's a straightforward framework to calculate the ROI for any workflow you're considering automating.
Step 1: Identify the workflow
Pick a specific, repeatable process. Be concrete:
- "Invoice chasing" (not "finance")
- "Lead follow-up" (not "sales")
- "Support ticket triage" (not "customer service")
The more specific the workflow, the more accurate your calculation.
Step 2: Measure current time spent
Estimate how much time your team spends on this workflow per week. Be honest — most people underestimate.
Ask these questions:
- How many times does this process happen per week?
- How long does each instance take?
- How many people are involved?
- What's the fully-loaded hourly cost? (Salary ÷ 48 working weeks ÷ 37.5 hours, then add 30% for NI, benefits, overhead)
Example: Invoice chasing happens 40 times per month. Each instance takes 15 minutes including emails, calls, and record updates. That's 10 hours per month. At a fully-loaded cost of £20/hour, that's £200/month in direct time cost.
Step 3: Count the indirect costs
Direct time is just the start. Consider:
Error cost. Manual processes have errors. What does a typical error cost to fix? How often do errors occur?
- Example: A misdirected invoice happens once per month and takes 2 hours to resolve. Cost: £40/month.
Delay cost. Slow processes have financial impact. What's the cost of delays?
- Example: Slow invoice chasing means an average payment delay of 15 extra days. On £50,000 monthly revenue, that's £25,000 in cash flow tied up — with an overdraft cost of roughly £250/month.
Opportunity cost. What could your team be doing instead?
- Example: Your finance person could spend those 10 hours per month on financial analysis that helps you make better business decisions. Hard to quantify, but real.
Total monthly cost of the manual process: £200 (time) + £40 (errors) + £250 (delay) = £490/month.
Step 4: Estimate automation cost
A typical workflow automation costs £500–2,000 per month depending on complexity. For this example, let's say £750/month.
Step 5: Calculate ROI
The simple calculation:
Monthly savings: £490 (recovered time and costs) + value of opportunity cost
Monthly automation cost: £750
Net monthly cost: £260 (before opportunity cost value)
But wait — this doesn't account for the improvement in outcomes:
- Faster payment reduces cash flow cost further
- Consistent follow-up recovers more invoices
- Your finance person's freed-up time has real value
When you factor in typical improvements:
- Payment time reduces by 15–20 days → additional cash flow benefit of ~£200/month
- 5% more invoices paid on time → ~£200/month on £50,000 revenue
- Time redirected to analysis → hard to quantify but significant
Adjusted monthly benefit: £890+
Monthly cost: £750
Monthly ROI: £140+ net positive, with compounding benefits
The quick formula
For a rapid estimate, use this formula:
Hours saved per week × Fully-loaded hourly rate × 4.3 = Monthly time savings
Then add 20–40% for indirect cost savings (errors, delays, opportunity cost).
If the result exceeds the automation cost, it's worth doing.
When ROI isn't immediate
Some automations have a payback period. That's normal. A workflow that costs £1,000/month to automate but only saves £700/month in direct costs might still be worth it because:
- Benefits compound as you add volume
- Quality improvements reduce churn
- Team satisfaction improves (lower recruitment costs)
- You're building operational infrastructure that supports growth
As a rule of thumb, if the payback period is under 6 months, it's a strong investment. Under 3 months, it's a no-brainer.
Common ROI by workflow type
Based on typical UK SME implementations:
| Workflow | Typical Monthly Saving | Typical Payback |
|---|---|---|
| Lead follow-up | £1,000–£3,000 | 2–4 weeks |
| Invoice chasing | £500–£1,500 | 3–6 weeks |
| Support triage | £800–£2,000 | 4–8 weeks |
| Data entry/sync | £300–£800 | 4–8 weeks |
| Reporting | £200–£500 | 6–10 weeks |
These are conservative estimates. Many businesses see significantly better results, especially as automation compounds across multiple workflows.
Take the next step
The Fit Test takes 60 seconds and gives you a personalised Automation Score with specific ROI projections for your business. It's the fastest way to identify which workflow will give you the best return.