Calculating your return on investment (RoI)

It is always difficult to calculate true RoI when investing in software solutions, without doing a detailed discovery phase at the customer site. The following table is intended as a guideline only, in order to give an idea of the approximate costs and cost savings that could be achieved with Avanquest AP+. This table is based on the following assumptions:

• The AP+ costs include the ability to capture and process line items from supplier invoices (the cost would be less if this is not the case).
• The AP+ Yr1 costs column includes licences for the document handling, viewing and approval process and also costs for implementation and configuration of the solution. The figures shown have been based on the number of invoices processed per annum (as shown in the first column). These costs will vary according to the nature of individual customer requirements.
• The Yr2+ Support Costs column illustrates what you pay each year in support for yrs 2, 3, 4, 5 etc. The upfront costs in Yr1 are not repeated in subsequent years.
• The Estimated Current Costs column is based on the assumption that an organisation currently has a manual process for supplier invoices. The figures are also based on the number of invoices with an average cost to process per invoice at £1. Specialist independent consultants ‘The Hackett Group’estimate the average cost to process a supplier invoice manually to be between £2 and £4 per invoice, so the RoI illustrated below is based on the low end of the cost scale.
• The Cost Neutral Point column is intended to illustrate, using your current costs, approximately how long it would take for the system to pay for itself.

No. of Invoices per annum	Estimated Current Cost	AP+ Yr1 Costs	Yr2 Support Costs	Cost Neutral Point	RoI after 3yrs	RoI after 5yrs
20,000	£40k	£55k	£6k	17 mths	£53k	£121k
50,000	£100k	£70k	£10k	10 mths	£210k	£390k
100,000	£200k	£110k	£18k	7 mths	£454k	£818k
250,000	£500k	£170k	£25k	4 mths	£1.28m	£2.23m
500,000	£1m	£250k	£45k	3 mths	£2.71m	£4.57m

Note: This table is intended as a guideline and should not be treated as fixed costs in any way. Fixed costs and true RoI can be provided upon completion of the discovery engagement and the production of a detailed design specification document.

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