Cost benefit analysis unit 10

shelley83

Hi
Does anyone have nay ideas how can do a cost benefit analysis if I am doing a simulation.

I can recommend changes but not actually implement them so don't know how much it will cost.

I don't think I would know how to do one if I did know the cost.

Thanks

Shell

mark130273

this is wher your judgment come into it, but for them to implement it and make it worth while i would have to say it must save them at least 10% !!

Jan

Shelley

When I did my Unit 10, one of the things I recommended was getting in another accountang package instead of the one used. So I looked up how much various other ones would cost and compared it - just 'cos it won't be implemented doesn't mean you can't do this. I also looked at the time saved by using a more effecient system, which could have done me out of some hours work, but I suggested my time could be better spent doing other accounting jobs which were then done by our external accountant!

Can't remember having any guidlines on having to save 10%!

I would think that the majority of projects are hypothetical anyway - so don't worry too much about it not being implemented.

blobbyh

Hi Shell,

The excellent link below describes the theory of cost-benefit analysis with a numerical example at the end;

http://management.about.com/cs/money/a/CostBenefit.htm

The 10% is a misnomer and any benefit should really be quantified in monetary terms so management can make their decision in figures they'll all understand; 10% could be £10,000 to one company but 1% could be £1m to another!

Switching your employees method of payment from cash to BACS is a simple example. You'll save on counter charges, time spent collecting from the bank, time spent counting the wages, envelope costs, passing out the wage packets etc. Contrast this against the BACS and other bank charges which should be nominal compared to cash payments plus the administration time will be much less once the mandates have been set up. There are also the non-monetary benefits of not being robbed in the street while carrying the money and of employees being paid more securely and quicker.

shelley83

Hi thanks everyone,

Robert you may be a mind reader changing to bacs is exactly one of the reccomendations I have made. Think I had better get cracking got to get this thing in in 2 weeks!!

lessci

What about when the benefits aren't monetary?

welshboy

I have completed Unit 10 and chose the implementation of a B.A.C.S system to replace a cash payroll system.

This is a pretty easy concept and only took me two weeks to complete the whole things so you shouldnt have any real issues with this as the information is available on their website highlighting the advantages etc so you just build on these.