Calculating Automation ROI: Formula + Excel Template

"Is automation worth it?" is the wrong question. The right one: "How much does automation actually deliver?" In this article, we show you how to calculate the ROI (Return on Investment) for automation projects with formulas, examples, and a downloadable template.

The Basic ROI Formula

ROI = (Benefit - Cost) / Cost x 100%

Example:

• Benefit: $50,000/year
• Cost: $10,000
• ROI = (50,000 - 10,000) / 10,000 x 100% = 400%

Sounds simple. The challenge: accurately determining benefits and costs.

Part 1: Capturing the Costs

One-Time Costs

Recurring Costs

Hidden Costs (Often Forgotten)

• Opportunity costs: What else could you have done with that time?
• Change management: Time for employee transition
• Risk buffer: 10-20% for unforeseen issues

Part 2: Quantifying the Benefits

Direct Time Savings

Formula:

Time Savings = (Time before - Time after) x Frequency x Hourly Rate

Example: Invoice Processing

Before: 10 minutes per invoice
After: 2 minutes (review only)
Savings: 8 minutes = 0.133 hours
Invoices/month: 200
Hourly rate: $40

Monthly savings = 0.133h x 200 x $40 = $1,064
Annual savings = $12,768

Error Reduction

Formula:

Savings = Error Rate x Volume x Cost per Error

Example: Data Entry

Error rate before: 5%
Error rate after: 0.5%
Reduction: 4.5%
Records/month: 1,000
Cost per error: $20 (correction time)

Monthly savings = 4.5% x 1,000 x $20 = $900
Annual savings = $10,800

Faster Response Times

Example: Lead Response Time

Before: 24 hours average
After: 5 minutes (automated)

Research shows: Lead conversion drops 80% after 1 hour
Assumption: 10% more conversions from faster response

Leads/month: 100
Average deal value: $5,000
Conversion increase: 10%

Additional revenue = 100 x $5,000 x 10% x 20% (margin) = $10,000/month

Scaling Without Hiring

Formula:

Savings = Avoided New Hires x (Salary + Benefits)

Example:

Growth: 50% more orders
Without automation: 1 additional person needed
With automation: Same team size

Cost of new hire: $50,000/year (including benefits)
Savings: $50,000/year

Qualitative Benefits (Hard to Measure, But Real)

• Employee satisfaction: Less monotonous work
• Customer satisfaction: Faster, more consistent service
• Compliance: Lower risk of penalties
• Competitive advantage: Faster than competitors

Tip: Consider qualitative benefits as a "bonus" - don't include them in the main calculation.

Part 3: The Complete ROI Calculation

Example: Automated Lead Qualification

Starting Situation:

• 500 leads/month
• 2 sales reps qualify manually
• 15 minutes per lead
• Hourly rate: $50

Current Costs:

500 leads x 15 min x $50/h = $6,250/month = $75,000/year

Automation Investment:

One-time:
Make.com setup: $0
Implementation: $5,000
Training: $500
= $5,500


Recurring:
Make.com Pro: $50/month
Maintenance (2h/month x $50): $100/month
= $150/month = $1,800/year

Costs After:

500 leads x 2 min (review) x $50/h = $833/month = $10,000/year
+ $1,800 recurring costs
= $11,800/year

ROI Calculation:

Annual savings = $75,000 - $11,800 = $63,200
One-time investment = $5,500
Recurring costs = $1,800/year

Year 1:
Benefit = $63,200
Costs = $5,500 + $1,800 = $7,300
ROI Year 1 = ($63,200 - $7,300) / $7,300 x 100% = 766%

Year 2+:
Benefit = $63,200
Costs = $1,800
ROI Year 2+ = ($63,200 - $1,800) / $1,800 x 100% = 3,411%

Break-even:

$5,500 / ($5,267/month) = 1.04 months

The investment pays for itself in just over a month.

Part 4: The Calculation Template

Step 1: Capture Process Data

PROCESS: _________________________

CURRENT STATE:
Frequency (per month): ___________
Time per occurrence: ________ minutes
People involved: ______________
Average hourly rate: $____
Error rate: ________%
Cost per error: $________

AFTER AUTOMATION (estimate):
Remaining time required: ________ minutes
Expected error rate: ________%

Step 2: Capture Costs

ONE-TIME COSTS:
Tool setup:               $________
External implementation:  $________
Internal time: _____h x $__/h = $________
Training:                 $________
Buffer (15%):             $________
---------------------------------
TOTAL ONE-TIME:           $________

RECURRING COSTS (per year):
Software license: $____ x 12 = $________
Hosting:          $____ x 12 = $________
Maintenance:   ___h x $___/h = $________
Support:                      $________
-------------------------------------
TOTAL RECURRING:              $________/year

Step 3: Calculate Benefits

TIME SAVINGS:
Time before: ____min x ____occurrences = ____h/month
Time after: ____min x ____occurrences = ____h/month
Savings: ____h/month x $____/h = $________/month
                                = $________/year

ERROR REDUCTION:
Errors before: ___% x ____occurrences = ____errors/month
Errors after: ___% x ____occurrences = ____errors/month
Reduction: ____errors x $____ = $________/month
                               = $________/year

ADDITIONAL BENEFITS:
Scaling avoids hiring:    $________/year
Other:                    $________/year

---------------------------------------------
TOTAL ANNUAL BENEFIT:     $________

Step 4: Calculate ROI

YEAR 1:
Benefit:              $________
One-time costs:     $________
Recurring costs:    $________
-----------------------------

= Net benefit:        $________

ROI Year 1 = Net Benefit / Total Costs x 100% = _______%

YEAR 2+:
Benefit:              $________
Recurring costs:    $________
-----------------------------

= Net benefit:        $________

ROI Year 2+ = Net Benefit / Recurring Costs x 100% = _______%

BREAK-EVEN:
One-time costs / Monthly net benefit = ______ months

Part 5: Typical ROI Values

Benchmarks by Process Type

When Automation Does NOT Pay Off

ROI < 100%: Question critically
ROI < 50%: Probably not worth it
Break-even > 24 months: High risk

Automation is less worthwhile for:

• Rare processes (<10x/month)
• Highly variable processes
• Processes that will change soon
• Very cheap manual labor

Part 6: Common Mistakes

1. Only Looking at Direct Costs

Wrong: "Make.com costs $50/month, that's cheap" Right: + Implementation + Maintenance + Opportunity costs

2. Overestimating Time Savings

Wrong: "The process takes 30 minutes -> saves 30 minutes" Right: How much of that is actually automatable? Often only 60-80%.

3. Forgetting Ramp-Up Time

The first weeks after go-live are often slower, not faster.

4. Counting Qualitative Benefits as Hard Numbers

Wrong: "Better customer satisfaction = $50,000" Right: List qualitative benefits separately, don't include in ROI.

5. Ignoring Scaling Effects

Automation becomes more valuable with growth. At static volume: ROI stays the same. With growth: ROI increases.

Part 7: How to Sell the Numbers Internally

The 3-Line Summary

"Invoice processing automation:
Investment: $7,500 one-time + $150/month
Savings: $65,000 per year
Break-even: 6 weeks"

Comparison with Alternative

OPTION A: Continue as-is
Costs: $75,000/year
Capacity: At limit
Risk: New hire needed if growth continues

OPTION B: Automation
Investment: $7,500 one-time
Costs: $12,000/year (incl. software + maintenance)
Capacity: 3x current volume
Savings Year 1: $55,500
Savings Year 2+: $63,000

Conservative vs. Optimistic Estimates

SCENARIO     | SAVINGS  | ROI    | BREAK-EVEN
-------------+----------+--------+-----------
Conservative | $40,000  | 430%   | 3 months
Realistic    | $55,000  | 630%   | 2 months
Optimistic   | $70,000  | 830%   | 6 weeks

Conclusion

ROI calculation for automation is not rocket science:

Costs: One-time + Recurring + Hidden

Benefits: Time x Frequency x Hourly Rate + Error Reduction

ROI: (Benefits - Costs) / Costs

Most automation projects have an ROI of 200-500% in the first year. That means: for every dollar invested, you get $2-5 back.

The hard part is not the calculation - it's getting started.

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