Key points
- ROI = (yearly benefit − yearly cost) ÷ yearly cost.
- The biggest benefits are usually time saved, lower stock losses and faster collections.
- Use your own numbers and be conservative.
- Count the full cost: licence, higher plans, setup, training and hardware.
- For many small businesses, payback comes within the first year.
The basic formula
ROI (%) = (Yearly benefit − Yearly cost) ÷ Yearly cost × 100. For desktop software paid once, spread the one-time cost over three years to compare fairly with a yearly subscription.
Where the benefit comes from
| Benefit | How to estimate it |
|---|---|
| Time saved | Hours saved per week × hourly cost of staff × 52 |
| Lower expiry and dead stock | Last year’s write-offs × expected reduction |
| Fewer stockouts | Sales lost to stockouts × margin × expected reduction |
| Faster collections | Reduction in money stuck with customers × your cost of money |
| Fewer billing mistakes | Value of wrong rates or missed charges you find in a month × 12 |
A worked example
Take a medical store with two counters and one accountant. These are illustrative numbers; use your own.
| Item | Calculation | Yearly value |
|---|---|---|
| Accountant time saved on GST and reconciliation | 4 hours/week × ₹150/hour × 52 | ₹31,200 |
| Counter time saved on searching and billing | 5 hours/week × ₹100/hour × 52 | ₹26,000 |
| Lower expiry write-offs | ₹60,000 last year × 40% reduction | ₹24,000 |
| Fewer lost sales from stockouts | ₹1,00,000 lost sales × 20% margin × 50% reduction | ₹10,000 |
| Total yearly benefit | ₹91,200 | |
| Yearly cost (example plan, setup, training) | ₹30,000 | |
| ROI | (91,200 − 30,000) ÷ 30,000 | 204% |
Even if you halve every benefit in this example, the yearly benefit (₹45,600) is still more than the cost.
Benefits that are harder to count
- Peace of mind about GST compliance.
- Being able to leave the shop and still know what is happening.
- Better decisions on buying and pricing.
- A business that is easier to grow or hand over.
How to use this for your business
- Measure today Track hours spent on billing, stock checks, GST and follow-ups for two weeks.
- Look at last year Expiry write-offs, dead stock, bad debts and lost sales.
- Get real prices Confirm the plan you need and all one-time costs.
- Be conservative Assume smaller savings than the brochure promises.