Help - Cost Benefit Analysis

HayleyM

I really need some help with this section of my report please!!
I really don't understand what it is that I have to do or even where to start with this bit!

My project is based on the authorisation of purchase ledger invoices. At the moment the invoices go direct to the branch and are authorised over there. Then they are all put into a big envelope and posted over to head office.
I have suggested purchasing a scanner which links to the computer system, so that once invoices have been approved they can be scanned over to the head office once a week. This would save time for the purchase ledger clerk as at the moment the invoices are only posted to head office three times a month and it is usually around 500+ invoices to process at a time.

Please can someone give me some little clues as to what I need to do for this?
Any help is appreciated!
Thanks in advance.

taskey

i am on the same part. my tutor has said to do a table with

recommendations, tangible cost, tangible benefit, intangible cost and intangible benefit as the headers

then fill out the table using your recommendations from each section and what it will cost in either monetary or benefit values

Hope that helps

Tracy

sdv

HayleyM wrote: »

I have suggested purchasing a scanner which links to the computer system, so that once invoices have been approved they can be scanned over to the head office once a week. This would save time for the purchase ledger clerk as at the moment the invoices are only posted to head office three times a month and it is usually around 500+ invoices to process at a time.

There is your ansewer-

cost your recommendations - how much will the scanner cost? how long will it take for a junior to scan those invoices on to the computer and how much will it cost to get those invoices e-mailed to you. how much time has it taken.

then costs the existing system/method. - some one to check the invoices at the head office/ mail them to you/ what if the invoices get lost in post/ or stuck in a postal strike/ how long does it take you to post these invoices on the computer/ how much time has it taken etc......

draw your conclusion in time saved and Monetary value saved!

Cost benefit analysis done!

HayleyM

Hi Tracey

Thanks for that!
I have something to start with now, it seem so hard when you look at it like that

Thank you!!

Toffeemadblue

I would tend to include a risk log alongside the Cost/Benefit, you make an attempt to list the risks associated with the old system/process (along with the probabilty/impact) and then compare the the risks associated with the proposed system.
This probably sounds like a lot of work but it keeps the C vs B analysis honest as reduction of risk is probably an intangible benefit and the existance of risk a current intangible cost. Alternatively if you to proposing to move from an expensive slow risk free-process to a swift cheap process with some risk you may think again or colour your recomendations with an awareness of the change in the risk profile
Hope this helps

HayleyM

sdv wrote: »

There is your ansewer-

cost your recommendations - how much will the scanner cost? how long will it take for a junior to scan those invoices on to the computer and how much will it cost to get those invoices e-mailed to you. how much time has it taken.

then costs the existing system/method. - some one to check the invoices at the head office/ mail them to you/ what if the invoices get lost in post/ or stuck in a postal strike/ how long does it take you to post these invoices on the computer/ how much time has it taken etc......

draw your conclusion in time saved and Monetary value saved!

Cost benefit analysis done!

Hi,

Thank you so much for your help!
I feel so stupid now! lol

You are a star!

Portsmouth_AAT

HayleyM wrote: »

I really need some help with this section of my report please!!
I really don't understand what it is that I have to do or even where to start with this bit!

My project is based on the authorisation of purchase ledger invoices. At the moment the invoices go direct to the branch and are authorised over there. Then they are all put into a big envelope and posted over to head office.
I have suggested purchasing a scanner which links to the computer system, so that once invoices have been approved they can be scanned over to the head office once a week. This would save time for the purchase ledger clerk as at the moment the invoices are only posted to head office three times a month and it is usually around 500+ invoices to process at a time.

Please can someone give me some little clues as to what I need to do for this?
Any help is appreciated!
Thanks in advance.

The way I done my cst benefit was to put an annual salary on the staff involved, IE purchase ledger clerk @ 16,000, break it down to hourly rate and if your idea is intended to save 1 purchase ledger clerk 2 hours work a week then show this individually, then as a team of say 10, the annual savings then a 5 year / 10 year plan on savings?

Also the saving on postage? annually? and again in 5/10 years. Does it effect any other departments in wasted time opening post? again analyse this

You need to show the long term savings as well as the short term, benefits such as team moral could also be mentioned to improve speed of staff?

You can make this as big or small as needed

HayleyM

Thank you everyone for all your help!
I have tons of ideas for this now.
You are all stars!!