How to work out what a manual process costs your business.

How do you work out what a process costs?

List every step. For each one, note who does it, how many minutes it takes and how often the process runs in a year. Multiply minutes by runs, turn that into hours, and multiply by that person's hourly cost. Add up the steps and you have the yearly cost.

Yearly cost = Σ (minutes per step ÷ 60) × runs per year × hourly cost

That's it. The hard part isn't the arithmetic. It's getting honest timings for the steps nobody thinks of as steps: the chasing, the re-keying, the waiting.

What hourly cost should I use?

Use the full cost of employing someone, not just their salary. Add employer's National Insurance and pension to the salary, then divide by the hours they actually work in a year. For a full-time UK employee, about 1,650 hours is a fair figure once holidays and bank holidays are out.

As a rule of thumb, on-costs add roughly 15% to salary. Use your own figure if you have it. In the example below, an administrator on £26,000 works out at about £18 an hour and an accountant on £40,000 at about £28.

A worked example: onboarding a new client

Here's a small accountancy practice taking on ten new clients a month, so the process runs 120 times a year. The figures are an illustration, not a real client's, but the shape is typical of what mapping turns up in a firm that size.

So a process nobody would call expensive costs about £5,040 a year and 230 hours, more than six working weeks. Two of the six steps, chasing documents and re-keying details, are 90 of those hours (£1,620) and add nothing the client would pay for. Those are the first candidates for automation.

Which costs do people usually miss?

Waiting, rework and switching. Time a job sits in an inbox, errors fixed later, and the minutes lost moving between systems rarely make it onto a list of steps, so they never make it into a budget. Ask the person who does the work, not their manager, and they'll name them in seconds.

It adds up across a business. Clockify found the average person loses 4 hours 38 minutes a week to duplicated work, and TeamDynamix found over 40% of workers spend at least a quarter of their week on manual, repetitive tasks. More on the numbers page.

Can I do this in ten minutes instead?

Yes. The free Noodell Flow tool asks who's involved and what an hour of their time costs, then walks you through the steps, timings and frequency, and works out the yearly cost for you. It also marks which steps add value, have to happen, or could go. You keep the figures either way.

Cost one of your processes, free →

What do I do with the number?

Rank the waste steps by cost and start with the biggest one you can change cheaply. Often that means connecting two systems you already own, not buying a new one. If you'd like it done with you, that's what Build is: map, redesign and build, at a fixed price.