Average Transaction value

The average transaction value is calculated by dividing the total value of all transactions by the number of transactions or sales. This can be calculated on a daily, monthly or annual basis.

An example of this may be - sales of $200,000 for the year, generated from 10 sales or transactions. Therefore the equation would be 200,000 / 10 = $20,000. The average transaction value is $20,000.

3 Common Mistakes

  • Not considering the costs involved in the transactions or process.
  • Utilising a certain cut-off period (IE sales transactions may fall over into the following period and therefore certain costs may be missed).
  • Upselling products or services to increase the average transaction value.

Average Number of Transactions

The average number of transactions is calculated by using the number of transactions over a specified period of time and dividing that by the time period of the desired outcome.

An example of this may be – total number of transactions for the year would be 1095 and the desired outcome is how many transactions on average would there be daily? Therefore the equation is 1095/365(days in a year) = 3 transactions per day.

3 Common Mistakes

  • Coupling transactions together as a single sale.
  • Expanding a single transaction to multiple transactions.
  • Using data from a specific time period, taking into account seasonal expectations if need be.

 

For more information please do not hesitate to contact us here.