"Our invoice processing only takes Sarah 8 hours a week. At her salary, that's maybe $25,000 a year."
— Accounting firm owner, Melbourne
When we unpacked it, the real annual cost was $49,880.
Manual processes cost more than they look—once you include the hidden costs, the real price is often 50–70% higher.
Why owners underestimate
Most people do quick math:
Time × hourly wage = process cost.
That misses four big multipliers: fixing errors, missed higher-value work, management time, and downstream problems.
Case study: Melbourne accounting firm
Process: Manual invoice processing
Role: Junior accountant (salary ~$65,000)
Time: 8 hours/week (48 weeks)
Owner's estimate: $25,600/year
The visible cost — $25,600
8 hrs/week × 48 weeks × ~$66.67/hr (true hourly cost, incl. on-costs) = $25,600
Hidden cost #1: Error fixing — $7,800
3% error rate → 156 fixes/year × 45 mins each = 117 hrs × $66.67 = $7,800
Hidden cost #2: Lost opportunity — $9,600
Some of those hours could earn more (e.g., client work).
Conservative gap: $50/hr on 4 hrs/week → $9,600/year
Hidden cost #3: Management overhead — $4,080
1 hr/week of review at ~$85/hr → $4,080
Hidden cost #4: System problems — $2,800
Late fees and time chasing paperwork → $2,800
Real annual cost: $25,600 + $7,800 + $9,600 + $4,080 + $2,800 = $49,880
The "$25K" process actually cost ~$50K—95% more than expected.
A quick way to sanity-check any manual process
When you want a fast, realistic estimate:
Apparent Cost × 2.2 = Likely Real Cost
If it looks like $20K, plan for ~$44K.
Under $15K/year: probably not worth automating yet
$15K–$30K: strong automation candidate
$30K+: urgent—automation usually pays back quickly
The four multipliers (in plain English)
Error correction – Manual work creates mistakes and rework.
Opportunity cost – Lower-value tasks push out higher-margin work.
Management time – Someone still checks and approves.
System inefficiencies – Slower cash cycle, penalties, unhappy customers.
What automation looks like (without the tech jargon)
Think of it as building a simple, reliable lane for the work: