Cost and benefit study, scenario 1 of 5

Small independent distributor

1,851 hours a year of manual order-to-cash work, and what changes when the buyer places the order.

Prepared by WEGOTRADE | Process optimisation and return on investment

Section 1

Introduction

This is a documented study, not an estimate. Every recurring task in the order-to-cash cycle was measured across a full year, then re-costed against a platform where the customer places the order.

ActivityDairy distribution with direct store delivery
IndustryB2B food distribution
Delivery drivers2
B2B customer orders430 per month
Estimated annual revenue$3,870,000 (at a $750 average order value)
Accounting or ERP systemQuickBooks Online

This study covers order capture, delivery adjustments, invoicing, payments and accounts receivable. It assumes 100% of order capture moves onto the platform. Payments are automated at 85% (60% online plus 25% collected on the doorstep by the driver). Remaining processes are covered by the mobile tools and the accounting integration, at 80% effort optimisation, leaving 20% for exception handling.

Section 2

Executive summary

1,851 hManual effort per year, before
1.10Full-time equivalents absorbed
$65,005Annual cost of that effort
1,493.7 hHours released, 0.89 FTE
$31,668Net annual saving
152%Return on investment
7.9 moPayback period
80%Effort automated

Key gains

Section 3

Where the 1,851 hours go

With 430 orders a month, customers order mainly by phone and email, and the administrative resource keys every one of them into QuickBooks Online by hand. On delivery, the 2 drivers take returns and total the final delivery manually, then the invoice is created from their notes on their return.

Friction points

Errors and rework

Manual entry into QuickBooks Online, and hand-written delivery notes, multiply transcription errors and omissions.

Operational delay

The full cycle from order to delivery to invoice to payment depends on drivers returning and on the administrative team being available.

No real-time visibility

Without a central system there is no live view of order, delivery and payment status.

Customer experience

Ordering by phone or email costs the buyer time. They have to reach someone, list every item from memory or their own notes, then wait for confirmation. Invoices arrive late and the balance is opaque.

Validated time assumptions

ActivityTime per order
Order creation8 min
Delivery adjustments3 min
Invoice creation3 min
Payment processing3 min
Accounts receivable4 min
Total per order21 min
Reference hourly cost = $59,000 fully loaded salary divided by 1,680 scheduled hours a year (35 h a week across 48 worked weeks) = $35.12/hour.

Current administrative load

SectionHours / monthHours / year
Customer orders57.3688 h
Consolidated supplier orders3.845 h
Delivery adjustments21.5258 h
Invoicing21.5258 h
Payments21.5258 h
Accounts receivable28.7344 h
Total154.31,851 h

That load is the equivalent of 1.10 full-time positions (1,851 hours divided by 1,680 hours per position), costing $65,005 a year.

Section 4

What changes, stage by stage

Annual effort falls from 1,851 hours to 357.3 hours. The spine of the change is that the customer places the order, on the branded ordering platform, instead of a person re-keying it.

Customer orders

Before. 688 hours a year.

After. 100% of orders are placed by the customer, online or from an order template generated for their delivery day. Manual entry disappears.

Released: 550.4 hours a year. The remaining 137.6 hours cover exception handling.

Consolidated supplier orders

Before. 45 hours a year.

After. The 9 monthly consolidated supplier orders are generated automatically by WEGODeliver.

Released: 36 hours a year. The remaining 9 hours cover exception handling.

Delivery adjustments

Before. 258 hours a year.

After. WEGODeliver captures adjustments and returns at the customer site. The final invoice is produced on the spot, so what is delivered and what is billed always match.

Released: 206.4 hours a year. The remaining 51.6 hours cover exception handling.

Invoicing

Before. 258 hours a year.

After. Invoices are generated on the spot and synchronised instantly with QuickBooks Online, with no re-keying.

Released: 206.4 hours a year. The remaining 51.6 hours cover exception handling.

Payments

Before. 258 hours a year.

After. WEGOPay automates 85% of payments (60% online plus 25% collected on the doorstep by the driver), and applies each payment to its invoice automatically. Reminders and statements go out on their own.

Released: 219.3 hours a year. The remaining 38.7 hours cover exception handling.

Accounts receivable

Before. 344 hours a year.

After. Payment reminders and monthly statements are automated on the platform, cutting the manual chase on overdue accounts.

Released: 275.2 hours a year. The remaining 68.8 hours cover exception handling.

Before and after, side by side

DimensionBeforeAfter WEGOTRADE
Error riskHigh. Manual transcription into QuickBooks Online, hand-written returns and omissions.Near zero. Data is entered at source by the customer or the driver.
Payment delayExtended by manual collection and late invoice updates.Shortened by immediate online payment and mobile collection at delivery.
Invoice deliveryManual and deferred, after drivers physically return.Automatic and instant, by platform and email.
Payment statusLong manual entry to apply each payment to its invoice in QuickBooks Online.Applied automatically for 85% of payments through the two-way QuickBooks Online integration.
Customer satisfactionDisputes from entry errors on returns and payments.Transparency and real-time access to invoices.
Team productivityAdministrative capacity consumed by repetitive entry.Room to grow volume without adding administrative headcount.

Section 5

The return

ItemBeforeAfterGain
Administrative cost$65,005$12,548$52,457
Full-time equivalents1.100.210.89 released

Hours by section

SectionBeforeAfterReleased
Customer orders688 h137.6 h550.4 h
Consolidated supplier orders45 h9 h36 h
Delivery adjustments258 h51.6 h206.4 h
Invoicing258 h51.6 h206.4 h
Payments258 h38.7 h219.3 h
Accounts receivable344 h68.8 h275.2 h
Total1,851 h357.3 h1,493.7 h
$31,668Net annual saving
152%Return on investment
7.9 moPayback
100%Order capture converted

What it costs. Your investment depends on order volume, driver and agent counts, and which ERP you run, so we scope it on a call rather than publishing a number that will not match your operation. See how pricing works, or have us run these numbers on your own volumes.

Benefits not counted above

Section 6

Where this leaves you

Today this operation spends $65,005 a year on administrative work that produces no margin and no customer value. Automating it releases 1,493.7 hours, which is 0.89 full-time equivalents, for a net $31,668 a year and a 152% return, paying for itself in 7.9 months.

Next steps

Run these numbers on my operation

Method