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2026-05-02

How to Calculate the ROI of Custom Software

A practical guide to calculating returns on custom software investment for small businesses.

Custom software costs money to build. But it also saves money, increases revenue, and reduces risk. Here’s how to calculate whether the investment makes sense.

Savings to Calculate

  • Time saved: If a process takes 2 hours per week and automation reduces it to 15 minutes, that’s £1,365/year at £15/hour.
  • Subscriptions replaced: If custom software replaces a £100/month SaaS tool, that’s £1,200/year saved.
  • Error reduction: Spreadsheet errors leading to rework, missed deadlines, or compliance fines have real costs.

The Calculation

A custom app costing £500 that saves 2 hours per week (£1,365/year) and replaces a £50/month subscription (£600/year) delivers £1,965 in annual value. Payback period: under 4 months.


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