Cost and benefit study, scenario 3 of 5

Mid-size distributor

12,555 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.

ActivityFood distribution with direct store delivery
IndustryB2B food distribution
Customer service agents3
Delivery drivers14
B2B customer orders2,975 per month
Estimated annual revenue$26,775,000 (at a $750 average order value)
Accounting or ERP systemBusiness Central

This study covers order capture, delivery adjustments, invoicing, payments and accounts receivable. It assumes 75% 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.

The net saving and return on investment below describe steady state, once setup and progressive rollout are complete. Only the payback period reflects the real year-one path, including 3 months of setup and 4 months of progressive rollout.

Section 2

Executive summary

12,555 hManual effort per year, before
7.47Full-time equivalents absorbed
$440,920Annual cost of that effort
9,181.2 hHours released, 5.47 FTE
$228,299Net annual saving
243%Return on investment
4.8 moPayback period
80%Effort automated

Key gains

Section 3

Where the 12,555 hours go

With 2,975 orders a month, customers order mainly by phone and email, and the administrative team keys every one of them into Business Central by hand. On delivery, the 14 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 Business Central, 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 orders396.74,760 h
Consolidated supplier orders560 h
Delivery adjustments148.81,785 h
Invoicing148.81,785 h
Payments148.81,785 h
Accounts receivable198.32,380 h
Total1,046.412,555 h

That load is the equivalent of 7.47 full-time positions (12,555 hours divided by 1,680 hours per position), costing $440,920 a year.

Section 4

What changes, stage by stage

Annual effort falls from 12,555 hours to 3,373.8 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. 4,760 hours a year.

After. 75% of orders are placed by the customer, online or from an order template generated for their delivery day. Customer service agents use WEGOSell to enter the remaining 25% for customers not yet ordering themselves.

Released: 2,856 hours a year. The remaining 1,904 hours cover exception handling and the share of orders not yet converted.

Consolidated supplier orders

Before. 60 hours a year.

After. The 12 monthly consolidated supplier orders are generated automatically by WEGODeliver.

Released: 48 hours a year. The remaining 12 hours cover exception handling.

Delivery adjustments

Before. 1,785 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: 1,428 hours a year. The remaining 357 hours cover exception handling.

Invoicing

Before. 1,785 hours a year.

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

Released: 1,428 hours a year. The remaining 357 hours cover exception handling.

Payments

Before. 1,785 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: 1,517.2 hours a year. The remaining 267.8 hours cover exception handling.

Accounts receivable

Before. 2,380 hours a year.

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

Released: 1,904 hours a year. The remaining 476 hours cover exception handling.

Before and after, side by side

DimensionBeforeAfter WEGOTRADE
Error riskHigh. Manual transcription into Business Central, 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 Business Central.Applied automatically for 85% of payments through the two-way Business Central 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$440,920$118,483$322,437
Full-time equivalents7.472.015.47 released

Hours by section

SectionBeforeAfterReleased
Customer orders4,760 h1,904 h2,856 h
Consolidated supplier orders60 h12 h48 h
Delivery adjustments1,785 h357 h1,428 h
Invoicing1,785 h357 h1,428 h
Payments1,785 h267.8 h1,517.2 h
Accounts receivable2,380 h476 h1,904 h
Total12,555 h3,373.8 h9,181.2 h
$228,299Net annual saving
243%Return on investment
4.8 moPayback
75%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 $440,920 a year on administrative work that produces no margin and no customer value. Automating it releases 9,181.2 hours, which is 5.47 full-time equivalents, for a net $228,299 a year and a 243% return. Payback lands at 4.8 months once 3 months of setup and 4 months of progressive rollout is accounted for.

Next steps

Run these numbers on my operation

Method