How To Calculate Gross Savings
- How to properly calculate & analyze return on investment to drive better business decisions
- How to calculate capital expenditures & operational expenditures for your business with real-life example
- 4-Steps guide on calculating your gross savings
How To Calculate Gross Savings
Calculating OPEX Savings
To get started, benchmark your current Operational Expenditures (OPEX) and set a target goal of the savings you’ll realize with a solution.
Follow this 4-Step, Adjusted Value Stream Analysis Best Practice Process
Step 1 Identify Process Tasks
The cash forecasting process tasks vary between companies. In general, they depend on the
size of the company and the organizational structure of the finance department.
Step 2 Calculate Time Spent
Review the current process and identify how many hours per week on average your team
spends on each task. This gives you the total FTEs your team expends on forecasting cash over a given period.
Step 3 Forecast Time Savings
A Sample hourly breakdown of tasks and average hour savings with automation is shown below:
Step 4 Calculate Final OPEX Savings
To calculate OPEX savings multiply the hours saved per week by the loaded labor costs.
Calculating Investment Interests
With accurate cash forecasting powered by AI, companies can reduce variance significantly and earn interest by investing proactively.
How to Calculate the Interests Gained
Calculating Debt Savings
With reduced variance in forecasts, companies don’t need to borrow as much from external sources and hence, don’t have to pay interest associated with borrowing.
How to Calculate the Savings Impact on Reduced Borrowing
As per these calculations, automating cash forecasting with Artificial Intelligence can influence the bottom-line significantly.
