Accounting practice Automation Payback
Payback = setup cost / (hours saved × hourly cost − monthly software cost)
Gather time sheets, engagement scopes and invoice ageing. Include professional hours, software, and review. The starting figures are examples. Replace them with your own records.
Formula and worked example
Payback = setup cost / (hours saved × hourly cost − monthly software cost)
| Input | Example |
|---|---|
| One-time setup cost | 3,000 |
| Monthly labour hours saved | 20 |
| Hourly cost of saved time | 40 |
| Monthly software cost | 150 |
| Calculated result | 4.6154 months |
Choose reliable inputs
Account for delivery time, review work and when you expect to be paid for each engagement. For this accounting practice calculation, use time sheets, engagement scopes and invoice ageing and a consistent definition of one engagement.
- Professional hours: include the portion belonging to this engagement or reporting period, and record where the value came from.
- Software: include the portion belonging to this engagement or reporting period, and record where the value came from.
- Review: include the portion belonging to this engagement or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Are all saved admin hours a cash saving?
A salaried expense may remain unchanged. Distinguish capacity released from actual expense reduction.
Saved time becomes cash saving only if costs fall, or contributes revenue if redeployed productively.
What if this input changes?
If one-time setup cost rises by 10%, this example changes by 0.4615 months. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.