Business AnalysisIntermediate 2 to 3 hours

Cost-Benefit Analysis

Produce a 3-year cost-benefit analysis for automating invoice processing.

The Scenario

A company processes 500 invoices per month manually. Each invoice takes 15 minutes to process. The finance manager wants to automate using an invoice processing tool that costs R8,000/month. Is it worth it?

The Brief

Produce a 3-year cost-benefit analysis covering all tangible and intangible costs and benefits. Show the break-even point.

Deliverables

  • A cost table: Year 1-3 costs including software, implementation, training, and ongoing support
  • A benefit table: Year 1-3 benefits including time savings (monetised), error reduction, and faster processing
  • A break-even analysis showing when cumulative benefits exceed cumulative costs
  • Intangible benefits and costs that cannot be easily quantified but should be considered

Submission Guidance

Time savings must be monetised. 15 min × 500 invoices = 125 hours/month. At R200/hour loaded cost, that is R25,000/month in labour. But automation will not eliminate 100% — assume 70% reduction.

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