How much does working without a system cost you?

What does this tool answer?

Working on paper or on separate Excel files has a cost that does not appear on any invoice: hours your employees spend on data entry and reconciliation, differences discovered at stocktaking, money held up with customers because follow-up is manual, and errors corrected after they happen. The tool adds up these four items into one yearly figure from your own estimates.

The tool does not show the price of any system or promise you any savings percentage: it calculates what you estimate, so you can compare it with a real quote.

The formulas

• Employee hourly cost = total monthly salary ÷ monthly working hours (192 hours by default).
• Yearly cost of manual time = number of employees × weekly hours × 52 weeks × hourly cost.
• Inventory differences = inventory value × yearly shrinkage and differences percentage.
• Cost of late collection = overdue amounts × annual cost of money × days late ÷ 365: what this money would have earned if it had been collected on time, or what you pay for alternative financing in its place.
• Cost of errors = monthly errors × 12 × average cost per error.
• Yearly total = time + inventory + late collection + errors. Every item is optional, except that time needs the number of employees, their hours and their salaries together.

Worked example

Two employees each spend 10 hours a week on manual work, with a total salary of 6,000 SAR; inventory of 500,000 SAR with 2% differences; overdue amounts of 200,000 SAR averaging 45 days with an 8% cost of money; and 10 errors a month costing 50 SAR each:

• Hourly cost = 6,000 ÷ 192 = 31.25 SAR, and manual time = 2 × 10 × 52 × 31.25 = 32,500.00 SAR (1,040 hours a year).
• Inventory differences = 500,000 × 2% = 10,000.00 SAR.
• Late collection = 200,000 × 8% × 45 ÷ 365 = 1,972.60 SAR.
• Errors = 10 × 12 × 50 = 6,000.00 SAR.
• Total = 50,472.60 SAR a year, about 4,206.05 SAR a month, and the largest item is time (64.39%).

Limits of the tool

The result is only as accurate as your estimates: ask your employees how many hours they actually spend on data entry and reconciliation, and go back to your last stocktake for the differences percentage. The tool does not say that any system eliminates all of this cost; ask whoever offers you a system which part it actually reduces in your business. This is an estimate based on the numbers you entered, not financial or investment advice.

Frequently asked questions

Content last reviewed: 2026-10-28