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Thread: Time and Profit

  1. #1
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    Time and Profit

    Good morning everyone,


    I'm working on a formula that displays time to money saved. Please let me know if this seems accurate to you guys. I've been automating processes for coworkers and speeding up their tedious tasks.
    I had just recently timed the difference between doing these tasks manually and using the program I developed. One of the tasks was a thirty second difference, and some tasks can even save my
    coworkers over thirty minutes per task! Obviously I am saving time, but how much money am I saving the company?


    These employee jobs consist of paying invoices every day. The average pay of an employee is $15.00/hr.
    If it takes takes 90 seconds for an employee to complete payments manually and 60 seconds using the program,
    how much money is the program saving the company per day?



    7.5 hrs = 27,000 seconds //// Work day (hours to seconds)
    Manual(M1)=90 seconds Automated(A1)=60 seconds
    27,000/M1= (M2) 27,000/A1 = (A2)
    300=M2 invoices per day 450=A2 invoices per day
    A2 – M2 = 150
    150 * M1 = 13,500
    13,500/60= 225 minutes
    225/60= 3.75 hours
    3.75 * $15.00 //// The average pay is $15.00/hr
    $56.25 //// Pay period/Per day.
    Last edited by trigg; Jul 11th 2017 at 07:21 AM.
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  2. #2
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    Re: Time and Profit

    On average, how many invoices are processed per week? You are suggesting that doing it manually, a single person can process 300 invoices, but if they do it using your program, then they can complete 450 invoices per day. But, in general, a company has a set number of invoices regardless of how many invoices a single employee can process. Assume there are 1,000 invoices to be processed per day. Manually, you would need 4 people to complete the invoices each day. Using your program, you would need only 3 people. So, perhaps you are saving the company an entire person. If only 100 invoices come in per day, then that one employee was needed regardless, so it becomes more difficult to determine how much you are saving the company. Perhaps the employee that is becoming more efficient is able to take on another project that was previously not getting done at all. This is a qualitative savings, not a quantitative one.

    If you are just trying to figure out how many man-hours you are saving from the task of processing invoices, then you still need to know the number of invoices per day or week. Let's assume there are 30,000 invoices per week. You want to know how many man-hours are being saved from processing invoices by using your program. That would be 30,000*30/3600 = 25 man-hours per week. At $\$$15/hr, that is a savings of $\$$375/week from the project of processing invoices. Is this a savings to the company? No. They are still paying the employees for being there. It is a savings to that particular project only.
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  3. #3
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    Re: Time and Profit

    Quote Originally Posted by trigg View Post
    Obviously I am saving time, but how much money am I saving the company?
    None if nobody gets fired
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  4. #4
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    Re: Time and Profit

    Quote Originally Posted by SlipEternal View Post
    Perhaps the employee that is becoming more efficient is able to take on another project that was previously not getting done at all. This is a qualitative savings, not a quantitative one.
    Wow! That is a great response. I didn't think about approaching it that way. I'll research this information more tomorrow. Thank you.

    Quote Originally Posted by DenisB View Post
    None if nobody gets fired
    Very true lol.
    Last edited by trigg; Jul 11th 2017 at 03:26 PM.
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  5. #5
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    Re: Time and Profit

    Hello,
    Why did you multiply 30000 by $\frac{30}{3600}$. Have you assumed that there are 60 hours per week?
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  6. #6
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    Re: Time and Profit

    Quote Originally Posted by Vinod View Post
    Hello,
    Why did you multiply 30000 by $\frac{30}{3600}$. Have you assumed that there are 60 hours per week?
    Each automated invoice saves 30 seconds. There are 3600 seconds per hour. The 30,000 invoices * 30 seconds/invoice / (3600 seconds/hour) gives the number of man-hours saved.
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