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You're Probably Underestimating This Cost Too
Until the day she calculatedthe true cost of her manual data entries.
$127,000 per year.
More than 2.5 times what she had estimated.
95% of manufacturers I meetunderestimate the cost of manual data entry.
Why? Because they only calculate thevisible time. The time spent in front of a screen doing manual data entry.
They forget everything else.
Manual data errors.Corrections. Lost opportunities. Employee morale.
This article will guide youstep by step to calculate the true cost of manual data entry in yourmanufacturing company.
Not just time. EVERYTHING elsetoo.
You'll leave with a precisecalculation and an action plan to improve your manufacturing efficiency.
Why Calculate the Cost of Your Manual Data Entry?
An Invisible Problem That's Eating Away at Your Profitability
Here's the truth.
As long as you don't measure,you can't improve.
Manual data entry is like aslow water leak in your basement.
You don't see it. But it'scausing damage.
Simply calculating the costof manual processes often reveals losses of $100,000 or more per year.
Check out 5 Signs Your Administrative Processes Are Costing You$50K+/Year to quickly identify if you're in this situation.
The Domino Effect of Data Entry Errors
A supplier order error due to manual entry?
Seems small.
But look at what happens next:
• Wrongquantity produced
• Reworkrequired
• Delayeddelivery to customer
• Dissatisfiedcustomer and strained relationship
• Time lost in crisis management
One small manual data error.Five negative consequences.
That's the domino effect. It'salso what we call the true cost of NOT automating.
Direct Costs: More Than YourEmployees' Time
The Real Time Invested in Manual Data Entry
Let's start with the basiccalculation.
How much does a manual entrycost in actual time?
A supplier order? Between 5 and15 minutes depending on complexity.
A delivery note? 5 minutes onaverage - the standard average manual order entry time.
A quality inspection? 3minutes.
Multiply that by your dailyvolume.
Typical example for amanufacturing SMB:
• 20orders per day = 200 minutes (3.3 hours)
• 30delivery notes = 150 minutes (2.5 hours)
• 50 inspections = 150 minutes (2.5 hours)
Total: 8.3 hours per daydedicated to manual data entry.
Just for a medium-sizedcompany.
The Full Labor Cost (Beyond the Hourly Wage)
Here's the classic mistake whentrying to calculate administrative process costs.
Calculating costs using justthe hourly wage.
An employee at $25/hour whospends 5 minutes on an entry = $2.08, right?
Wrong.
The true administrativeemployee cost includes:
• Basesalary
• Payrolltaxes (approximately 20-25%)
• Benefits(insurance, retirement contributions)
• Infrastructure(office, computer, electricity)
• Training
Result: the true cost isbetween 1.4 and 1.8 times the hourly wage.
So that same 5-minute entrydoesn't cost $2.08.
It costs between $3 and $3.75.
In the United States, accordingto Parseur.com,the average cost is estimated at $28,500 USD per employee per year(approximately $38,500 CAD).
In Canada, for themanufacturing sector, it's similar once costs are adjusted.
Tools and Resources Involved
There's also:
• Softwarelicenses
• Technicalsupport
• Timelost in administrative tasks for supervision
• Ongoing training
All of this adds up.
The Hidden Costs of Manual Data Entry
This is where it getsinteresting.
The hidden costs of errorsand inefficiencies often represent 2 to 3 times the direct cost.
Yes, you read that correctly.
1. Errors and Their Cascade of Consequences
Standard Error Rate: 1 to 3% per Entry
Studies confirm it.
Even with a rigorous team, the dataentry error rate ranges between 1 and 3% per single entry.
Vistaflowdocuments this rate for manufacturing orders.
In the metrology industry, aBeamex study revealed something alarming.
With the double data entryproblem (paper → system), 40% of calibrations contained errors.
40%.
Almost half.
Impact on Supplier Relationships
Imagine.
You regularly order from thesame supplier.
But your orders contain manualentry errors. Wrong quantities. Wrong references. Incorrect dates.
The supplier starts to doubtyour reliability.
They hesitate before grantingyou flexible payment terms.
They become less accommodatingwith urgent requests.
All because your manual entriescreate noise in the relationship.
The impact of errors onsupplier relationships is real and measurable.
Correction and Rework Costs
An administrative errordetected?
You need to:
• Identifythe problem (15-30 minutes)
• Contactthe supplier or customer (15-30 minutes)
• Correctin the system (10-15 minutes)
• Inform the relevant people (10-20 minutes)
Total: between 30 and 45minutes per error.
If you have a 1% error rate on20 orders per day?
That's 1 supplier ordererror every 5 days.
52 errors per year.
26 to 39 hours lost just incorrections.
The error correction costaccumulates quickly.
2. Lost Opportunities
Time Stolen from Strategic Activities
Here's a simple question.
If your factoryadministrative team spent 37% of their time on manual entries...
What could they do instead?
Analyze data to make betterdecisions.
Improve processes.
Develop customer relationships.
Prepare quotes faster.
All activities that generatevalue and improve administrative productivity.
But no. They're typing datainto fields.
The opportunity cost ofmanual entry is invisible but massive.
Decisions Based on Inaccurate Data
You want to know how many partsyou have left in inventory?
The system says 150.
The reality? 132.
Manual entry error duringreceiving.
Result: you plan productionthat can't happen.
Production stoppage. Stress.Race against time to find the parts.
All because the data wasn'treliable.
The impact of entry errorson production is direct and costly.
3. The Cost of Non-Quality
Manual entry errors createproduction problems.
Out-of-tolerance measuringinstruments not detected due to an entry error?
Risk of defects in yourproducts.
Risk of regulatorynon-compliance.
In the worst case: productrecall.
The cost? Tens of thousands ofdollars. Sometimes more.
4. Impact on Employee Morale and Retention
Let's be frank.
Nobody dreams of spending theirdays manually entering data.
It's repetitive. It's boring.It's demotivating.
Your best administrativeemployees?
They leave to find morestimulating positions elsewhere.
The cost of replacing anemployee: between 50% and 150% of their annual salary.
Recruitment. Training. Lostproductivity during onboarding.
All of this adds up.
Case Study: The True Cost of a Manufacturing SMB
Typical Company Profile
Let's take a realistic example.
A typical manufacturing SMB:
• 50total employees (among the 497,700 jobs in the manufacturing sector)
• 3people in administration
• 20supplier orders per day
• 30daily receipts
• 50quality inspections per day
• Timesheets for 50 employees
Detailed Calculation of Annual Costs
Time dedicated to manual data entry:
Supplier orders:
• 20× 10 minutes = 200 min/day
• 200min × 250 days = 50,000 min/year
• 833 hours/year
Receipts (delivery notes):
• 30× 5 minutes = 150 min/day
• 625 hours/year
Quality inspections:
• 50× 3 minutes = 150 min/day
• 625 hours/year
Timesheets:
• 50employees × 2 entries/day × 2 min = 200 min/day
• 833 hours/year
Supplier invoices:
• 100invoices/month × 15 min = 1,500 min/month
• 300 hours/year
Total: 3,216 hours per year
Labor cost:
• Hourlyrate with charges: $35/h (conservative)
• 3,216 h × $35 = $112,560
Hidden costs:
Error correction (1.5% errorrate):
• ~50errors/month
• 50× 45 min = 2,250 min/month
• 450 hours/year × $35 = $15,750
Lost opportunities (conservativeestimate):
• 20%of time could be allocated to strategic tasks
• 20% × $112,560 = $22,512
Morale and retention impact:
• 1departure every 2 years related to monotony
• Replacementcost: 50% of annual salary
• $50,000 ÷ 2 = $25,000/year
TOTAL ANNUAL COST: $175,822
That's the equivalent of $28,500per administrative employee involved - exactly the average documented by Parseur.
The Surprises of the Complete Calculation
Marie, our manager from thebeginning, discovered:
• Directcost (time) was only 40% of the actual cost
• Errorscost an additional 9%
• Lostopportunities represented 13%
• HR impact accounted for 14%
The hidden cost was 1.56 timesthe direct cost.
For other companies, this ratiogoes up to 2 or even 3.
By the way, look at what Idea Service accomplished by automating their entries:going from 25 hours to 30 minutes per week. A 98.8% reduction in time dedicatedto manual data entry.
How to Calculate the Cost of YOUR Manual Data Entry
5-Step Calculation Methodology
Step 1: Identify all processes involving manual data entry
Make a complete list to calculate your manual process costs:
• Supplierorders
• Delivery/receivingnotes
• Qualityinspections
• Invoices
• Timesheets
• Productiondata
• Non-conformancemanagement
• Customer quotes
Step 2: Measure actual time
For one week, track:
• Howmany times the process repeats
• Averagetime per entry
• Number of people involved
Step 3: Calculate the fulllabor cost
Don't just take the hourlywage.
Add:
• Payrolltaxes: +20-25%
• Benefits:+10-15%
• Infrastructure and support: +5-10%
Total multiplier: 1.4 to 1.8times base salary.
Step 4: Estimate hiddencosts
For each category:
• Dataentry error rate × correction time
• %of lost opportunities × hourly cost
• Turnover impact (annualized estimate)
Step 5: Add up and multiplyby 250 days
You get your actual annualcost.
You'll better understand how to automate data entry for manufacturers onceyour costs are identified.
Variables to Consider
Certain factors increase ordecrease the cost:
Aggravating factors:
• Doubleentry (paper → system)
• Multipledisconnected systems
• Non-standardizedformats
• Highstaff turnover
• Complex processes
Mitigating factors:
• Highlyexperienced team
• Standardizedprocesses
• Partialautomatic validation
• Moderate volume
Use Our Free Calculator
Does all this automation ROIcalculation seem complex?
We've created a calculator thatdoes the work for you.
In 5 minutes, you get:
• Yourannual direct cost
• Hiddencost estimate
• Yourtotal cost
• Potential savings with automation
No registration required.Immediate results.
[CALCULATE YOUR COSTS IN 5 MINUTES - FREE TOOL]
What to Do with This Information?
Identify Quick Wins
Now that you know your costsfor reducing manual entry errors, you need to prioritize.
Not all processes are equal.
Prioritization criteria:
• Highvolume + significant unit time = quick ROI
• Higherror rate = strong quality impact
• Repetitive and standardized processes = easy toautomate
Typical quick win example:Supplier invoice processing. High volume, repetitive process, direct financialimpact.
Check out our Top 10 Administrative Tasks to Automate Firstto know where to start.
Prioritize Processes to Automate
Use this simple matrix:
Impact × Ease = Priority
• Highimpact + High ease = DO FIRST
• Highimpact + Low ease = Plan for medium term
• Lowimpact + High ease = Secondary quick wins
• Low impact + Low ease = Leave for later
Several technologies can helpyou, including:
• OCRfor automating document processing
• APIs for connecting your tools
• RPA for automating repetitive tasks
Build a Solid Business Case
With your numbers in hand, youcan:
• Calculatethe ROI of administrative automation
• Justifythe investment to management
• Prioritize projects based on return
Business case example:
• Currentcost: $85,000/year
• Automationsolution: $15,000 implementation + $3,000/year
• Savings:50% = $42,500/year
• ROI: 4.2 months
Hard to say no to that.
What You Need to Remember
The cost of manual dataentry is almost always underestimated.
Sometimes by a factor of 2 or3.
Why?
Because we only calculatevisible time.
We forget:
• Manualdata errors and their corrections
• Lostopportunities
• Decisionsbased on inaccurate data
• Impact on team morale
The first step to improve your manufacturingefficiency?
Know your numbers.
Calculate your costs in 5minutes with our free tool.
Then, we'll show you how toautomate risk-free and pay for results.
Frequently Asked Questions
What is the average cost of manual data entry for a manufacturing SMB?
For a 50-employee SMB, theaverage cost ranges between $60,000 and $150,000 per year, depending on thevolume of operations. The cost per administrative employee is estimated at$28,500 per year on average (source: Parseur.com), but varies significantly basedon specific processes and each organization's reality.
How do I calculate the errorrate of our manual data entry?
Simple method: for 1 week,count the total number of entries made and the number of detected errorsrequiring correction.
Error rate = (errors ÷ totalentries) × 100. Example: 500 entries, 8 errors = 1.6% error rate.
Note: undetected errors aren'tcounted, the actual rate is often 2 to 3 times higher.
Which types of manualentries cost the most in manufacturing?
The 5 most expensive: (1)Supplier order processing (time + error impact), (2) Delivery note entry (highvolume), (3) Quality inspection data entry (compliance risk), (4) Invoiceprocessing (volume + complexity), (5) Timesheets (volume × number of employees).
At what threshold doesautomation become profitable?
General rule: if the calculatedcost exceeds $30,000 per year for a given process, automation is typicallyprofitable within 6 to 12 months. With "pay for results" models, thethreshold drops to $15,000 per year. ROI is calculated: annual savings ÷implementation cost.
Don't manual entries alsoaffect our production?
Absolutely. Manual entry errorsin administrative systems create a domino effect: erroneous orders → wrongquantities produced, supplier delays → production stoppages, inventory errors →stockouts or overstocking. On average, 15 to 25% of production problems have anadministrative origin.
How do I identify cost sources?
If you quickly identifyadministrative tasks to automate, I invite you to fill out this ROI calculator.
We've prepared it to allow youto quickly assess administrative costs and see the automation potential of thetask.
