How to Calculate Average Transaction Value for Merchant Account

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ATV will tell you how much each customer's transaction is worth.
ATV will tell you how much each customer's transaction is worth. (Image: Jupiterimages/Brand X Pictures/Getty Images)

Average transaction value is a figure used in nearly every business, for a variety of operations. Understanding the ATV helps salespeople understand the value of each customer, provides data for sales goals and allows the business to make estimates regarding customer flow. Even small businesses can easily calculate an ATV as long as individual transaction totals are retained on a daily basis. Once a recording system is in place, updates to the ATV can be made for a particular period or as a total running average.

Determine the period for which you would like to calculate the average transaction value. You may be interested in the ATV for one or more specific time frames, or you may want to know your overall ATV for the life of your business.

Enter individual transaction totals for your chosen period into the cells of one column in a spreadsheet program. Some credit card merchant accounts offer online access to your monthly transaction history, and many offer the option of exporting transaction data to Microsoft Excel. Take advantage of this feature to decrease the number of transactions entered by hand; you will still have to insert transactions paid by cash or check.

Highlight all the cells in the column containing transaction totals and the blank cell beneath the final value.

Click the downward-facing arrow to the right of the Autosum button on the toolbar at the top of the screen and choose "Average." The cell will now contain the average transaction value for the period represented by the highlighted cells.

Keep a copy of the spreadsheet if you would like to recreate the calculation for a later period. Label the header cells and format the transaction cells for currency to create a more organized spreadsheet for repeated use.

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References

  • E. Austin; General Retail Manager; Liverpool, New York
  • "Financial & Managerial Accounting: The Basis for Business Decisions"; Jan Williams, et al.; 2010
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