How to measure the return on an automation project (UK example)
Measure automation return by pricing the staff hours it saves. UK worked example: an hour on the £12.71 wage costs £16.27, and the break-even sum.
·7 min read·OpusGate Editorial
To measure the return on an automation project, put a pound value on the staff time and errors it removes, then compare that with what the system costs to build and run. If the saving covers those costs within two years and you have a real use for the freed hours, the project is worth doing. Most estimates go wrong on the cost of an hour: for someone on the National Living Wage, an hour of work costs the employer about 28% more than the hourly rate once you add National Insurance, pension and holiday.
Unclear return is the main reason firms hold back
In the government’s AI adoption survey 2026, 65% of businesses that weren’t using AI said a missing business case or unproven return was a barrier. The same survey found AI in use at 34% of small businesses (10 to 49 staff) and 27% of micro businesses (5 to 9 staff), so if you haven’t started, you’re with the majority of firms your size. The researchers interviewed 3,503 businesses by phone between January and April 2026, according to the full research report.
You don’t need a vendor’s ROI calculator to fix that gap. Those calculators use the vendor’s assumptions about your volumes and your wages. The sum below fits on one page, and every input is a number you already have or can measure in a fortnight.
Work out what an hour of staff time costs you
Start with the wage and add what you pay on top of it. The table uses a full-time employee on 37.5 hours a week at the National Living Wage of £12.71 an hour, the rate for workers aged 21 and over from April 2026. Swap in your own pay rates if they’re higher.
| Cost line | How it’s worked out | Per year |
|---|---|---|
| Pay | £12.71 × 37.5 hours × 52 weeks | £24,785 |
| Employer National Insurance | 15% of pay above £5,000 | £2,968 |
| Minimum employer pension | 3% of pay above £6,240 | £556 |
| Total cost of employment | £28,309 |
The National Insurance line uses HMRC’s 2026 to 2027 rates for employers: 15% on earnings above a secondary threshold of £5,000 a year. The pension line is the legal minimum, because the Pensions Regulator sets the employer share at 3% of qualifying earnings between £6,240 and £50,270.
That £28,309 doesn’t buy 52 weeks of work. Full-time staff are entitled to 5.6 weeks of paid holiday, which leaves 46.4 working weeks, or 1,740 hours. Divide one by the other and an hour of work costs you £16.27, against a wage of £12.71.
One adjustment matters for small employers. If you can claim the Employment Allowance, worth up to £10,500 a year off your employer National Insurance bill, and it already covers your whole bill, an extra hour of work adds no National Insurance. In that case use £14.56 an hour. Your accountant will know which figure applies to you. Both numbers leave out sick days, training and management time, so treat them as a floor.
A worked example: 40 supplier invoices a day
Take a hypothetical wholesaler. One clerk on the National Living Wage keys 40 supplier invoices a day into the accounting software, at about four minutes each. That’s 160 minutes a day of typing supplier names, dates, line items and VAT.
The proposed change is an AI document-processing step that reads each PDF and fills in the fields, connected to the accounting software through an integration. The clerk still checks and approves each invoice before it posts. The example assumes that check takes one minute, and you shouldn’t assume zero: in the same government survey, 56% of businesses already using AI said they worried about bias and inaccuracy. If the model misreads a VAT figure, the wrong number posts unless someone looks.
With the check in place, the clerk’s 160 minutes drop to 40, a saving of two hours a day. Over 232 working days (46.4 weeks of five days) that’s 464 hours a year. At £16.27 an hour the saving is worth £7,549 a year, or £6,758 if the Employment Allowance covers your National Insurance.
All the volumes and timings here are invented for the example. The method is the part to copy.
What can you spend and still break even?
The annual saving sets a ceiling on what the project can cost. Using the £7,549 figure, this is the most the build plus running costs could add up to over each period before the project loses money:
| Payback target | Build plus running costs must stay under |
|---|---|
| 12 months | £7,549 |
| 24 months | £15,098 |
| 36 months | £22,647 |
Aim for the 24-month line or better. We’d be wary of any project that needs three years to pay for itself, because your accounting software, your suppliers’ invoice layouts and the AI service’s prices will all have moved by then.
Running costs need as much attention as the build. Many AI services charge per page or per request, so the monthly bill rises with your volume. Ask for a written estimate of monthly running costs at your current volume and at double it, and ask whether there’s a spending cap. OpusGate’s published prices start at £1,000 for custom software, with a fixed quote agreed before work starts, which makes the build side of the sum a known number.
Costs and savings that get left out
The biggest mistake is counting hours that never turn into money. If the clerk’s two freed hours go to chasing overdue payments or replace paid overtime, they’re real. If they spread thinly across the day, the cash saving is close to nothing, however good the spreadsheet looks. Decide where the time goes before you sign anything, and write it down.
Errors cut the other way, and they’re usually missing from the baseline. Time spent fixing a wrong VAT code or reversing a duplicate payment belongs in the “before” figure, so count it.
Supplier invoices from sole traders contain personal data. Read the ICO’s guidance on AI and data protection before you send them to an AI service, and ask your supplier where the data is processed.
Budget for upkeep too. A supplier changes its invoice template and the extraction needs adjusting; someone has to notice and fix it.
Measure the manual process before you ask for a quote
Once a new system is live, nobody remembers how long the old way took, and the before-and-after comparison turns into guesswork. Two weeks of measurement now avoids that:
- Pick one process. If you’re not sure which, the post on which processes to automate first covers how to choose.
- For two working weeks, have the person who does it log how many items they handle each day and roughly how long each takes. A tally sheet by the keyboard is enough.
- Log every correction in the same fortnight: what went wrong and how long it took to fix.
- Write down what the freed hours would go to.
- Work out your hourly cost with the table above, multiply by the hours saved, and only then ask for quotes.
A supplier who can see your measured volumes can quote more accurately, and you can hold the finished system to the same numbers three months after it goes live.
Frequently asked questions
How should the build cost appear in my accounts?
That depends on how the work is structured and on your business, so ask your accountant. For the payback sum, use the cash you’ll spend and when you’ll spend it.
Is automation worth it for a task done a few times a month?
Rarely on time savings alone. The case for a monthly task usually rests on avoiding mistakes or meeting a deadline, and you’d need to put a price on those instead.
Does the same method work for an AI customer support assistant?
Yes, but the thing you measure changes. Count the enquiries your team handles now and the minutes each takes, then after launch count how many the assistant resolves without a person stepping in. Track complaints too, since a cheaper reply that annoys customers isn’t a saving.
If you have a process in mind and want a second pair of eyes on the sum, book a free call and we’ll tell you honestly whether it’s worth automating, what it would cost and how long it would take.