An exception is any transaction a finance team has to stop and handle by hand: an invoice that does not match its order, a bank line with no ledger entry, a short payment with no reason code. Each one takes a person's time to look up the documents, decide and record the outcome, and some need a second reviewer.
The calculator works from five numbers you supply and returns the hours and dollars your team spends on exceptions. It estimates handling cost only. It does not estimate what the exceptions are worth or what anyone could recover from them.
Calculate it on your numbers
The starting values are the round figures from the worked example below. Replace them with your own. Nothing you type leaves this page.
What handling exceptions costs
- Hours per month85
- Cost per month$4,250
- Hours per year1,020
- Cost per year$51,000
- Cost per exception$14.17
The inputs
| Input | What to enter | Where to find it |
|---|---|---|
| Exceptions per month | The number of items your team handles by hand each month across matching, reconciliation and AR | Your AP exception queue, unmatched bank items and open AR items for a recent month |
| Minutes per exception | The average time one person spends on one exception, from opening it to recording the outcome | A week of time notes from the people who work the queue |
| Loaded hourly cost | Salary plus benefits, payroll taxes and overhead, divided by working hours | Your payroll or FP&A team |
| Share needing a second reviewer | The percentage of exceptions that go to a second person, such as a controller | Your approval matrix and a sample of closed exceptions |
| Minutes per second review | The average time the second reviewer spends on one exception | The reviewers themselves |
The formulas
- First-pass hours per month = exceptions per month × minutes per exception ÷ 60
- Second-review hours per month = exceptions per month × share needing a second reviewer × minutes per second review ÷ 60
- Hours per month = first-pass hours + second-review hours
- Cost per month = hours per month × loaded hourly cost
- Hours and cost per year = the monthly figures × 12
- Cost per exception = cost per month ÷ exceptions per month
A worked example
The figures below are round numbers for illustration. They describe no company, and Rever publishes no figure for them.
| Input or result | Value |
|---|---|
| Exceptions per month | 300 |
| Minutes per exception | 15 |
| Loaded hourly cost | $50 |
| Share needing a second reviewer | 20% |
| Minutes per second review | 10 |
| First-pass hours per month | 75 |
| Second-review hours per month | 10 |
| Hours per month | 85 |
| Cost per month | $4,250 |
| Hours per year | 1,020 |
| Cost per year | $51,000 |
| Cost per exception | $14.17 |
At 85 hours a month, the queue takes about half of one person's working month before anyone has fixed a cause.
What the number leaves out
- The cost of an exception nobody catches: a duplicate paid, a rebate never claimed, a short payment written off. Those amounts belong in a recovery review, not in this calculator.
- The cost of delay: a close that waits on open items, or a vendor relationship strained by a late payment.
- Rework when an exception reopens after the close.
Where agents fit
Matcher checks each in-scope transaction against its documents as it lands, so the people on your team see the items that did not tie out, and Investigator traces the unexplained differences to their cause before they reach your Inbox with the evidence attached. Your team still decides each exception and approves each action. Run the calculator on your own numbers, then compare it with what the zero-day scan surfaces in a free Proof of Value, on a limited period of your data. See bank reconciliation on rever.ai, invoice reconciliation software and the glossary.
See your own exceptions, with the evidence
The free Proof of Value agrees the scope, runs the zero-day scan on a limited period of your data and walks you through the supported findings: get a free Proof of Value.