How to Calculate "Average Sale Value"

The Income formula is:

Income / Revenue = Active Clients * Average Sales Value * Average # of Transactions

This equation reconciles to the company's financial reporting under Income (or Sales or Turnover or whatever term the company wishes to use).

As an example limiting ourselves to one day:

But the business owner knows that if:

Thus we can use specific strategies to improve any of the three components of income.

However, up to now, business has not had the ability to measure these components and if one does not measure, one cannot improve.

How To Calculate "Average Sale Value"

"Average Sale Value" is the easiest handle to determine and verify outside of Elements.

Simply add up the invoices raised in the relevant time period subtract the total of adjustment (credit) notes and divide by the total number of transactions.

We use the tables we had in “Active Clients” to determine Average Sale Value for the same periods.

Week 1

Transaction #	Date	Client	Amount
1001	13/10/2018	Smith	$95.00
1002	14/10/2018	Brown	$1,100.00
1003	15/10/2018	Wyatt	$155.00
Total		3 Transactions	$1,350.00

Average Sale Value = $1,350 / 3 = $450.00

Week 2

Transaction #	Date	Client	Amount
1004	20/10/2018	Smith	$100.00
1005	21/10/2018	Jones	$200.00
1006	22/10/2018	Smith	$55.00
C/N 345	22/10/2018	Smith	-$80.00
1007	22/10/2018	Brown	$150.00
1008	24/10/2018	Green	$110.00
C/N 346	24/10/2018	Green	-$10.00
Total		7 Transactions	$525.00

Average Sale Value = $525.00 / 7 = $75.00

We have seven transactions (each transaction increments our count by one). The invoice transactions total $615.00 less the adjustment (credit) note amounts ($90.00).

Week 3

Transaction #	Date	Client	Amount
1009	27/10/2018	Brown	$65.00
1010	28/10/2018	Brown	$1,100.00
1011	29/10/2018	Wyatt	$155.00
Total		3 Transactions	$1,320.00

Average Sale Value = $1,320.00 / 3 = $440.00

Week 4

Transaction #	Date	Client	Amount
1012	1/11/2018	Brown	$100.00
1013	1/11/2018	Wyatt	$200.00
1014	2/11/2018	Smith	$55.00
C/N 347	2/11/2018	Green	-$80.00
1015	3/11/2018	Brown	$150.00
1016	3/11/2018	Green	$110.00
C/N 348	4/11/2018	Green	-$10.00
1017	4/11/2018	Green	$215.00
1018	5/11/2018	Green	$250.00
1019	5/11/2018	Wyatt	$50.00
1020	5/11/2018	Black	$500.00
Total		7 Transactions	$1,540.00

Average Sale Value = $1,540.00 / 7 = $220.00

We have seven transactions (nine invoices less two credit notes). The invoice transactions total ($1,630.00) less the adjustment (credit) note amounts ($90.00).