In this post I will explain how to calculate a dollar or percentage commission payout in one cell using the SUMPRODUCT function. Calculating commissions on a tiered rate structure can be difficult because you are trying to determine the cumulative payout based on different rates at each tier, and the achievement amount might fall in between one of the tier ranges.
If your commission plan tiers are not cumulative, then you might want to checkout my article on how to calculate commissions with VLOOKUP. This is a simpler calculation then the one presented below.
The following is an example of a tiered rate table for sales commissions. The first column contains the tiered ranges of Quota Attainment and the second column contains the Payout % for each tier. If the sales person (rep) achieves sales that are at the top end of each tier, then they will receive the full payout amount in the Total Payout column. For example, if the rep sells 40% of their quota then they will receive 20% of their commission. If they sell 60% of quota, they will receive 35%, and so on down the table.
The difficult part is when the attainment amount falls in between the ranges. What if the rep sells 50% of his/her quota? The rep would receive 20% payout for the first 40% of quota, and an additional 7.5% payout for the last 10% of quota. The last 10% of quota attainment is calculated by finding the payout rate at each tier. So the total payout on 50% of quota would be 27.5%.
Typically we would have to calculate the payout at every tier and then sum the payout amounts to get the total amount. Or we could use some complicated IF statement to determine the payout all in one formula. But there is an easier way…
You can download the sample workbook below to follow along.
The SUMPRODUCT function can be used to calculate the entire payout. First we have to calculate the differential payout rate for each tier. The differential rate is the difference between the payout rates at each tier.
The payout rate at each tier is the total percentage of payout in the tier, divided by the total percent of attainment possible in the tier. This is basically the amount paid for each percentage increase in attainment in each tier. In the image below the Payout Rate for the 0%-40% range is 0.50. This means that for every 1% attained, the payout will be 0.50 of the 20% total payout.
Payout Rate =([tier attainment max] – [tier attainment min]) / ([payout % this tier] – [payout % previous tier])
The payout rate is also known as the rate curve. The rate curve is displayed below, and you can think of the payout rate as the slope of the curve at each tier.
The differential rate is calculated by taking the difference between the payout rate in the current tier and the payout rate in the previous tier.
Differential Rate = [payout rate Current tier] – [payout rate Previous tier]
This is used in the cumulative calculation of the payout percentage. As the attainment moves up into multiple tiers, the amount of attainment left in each tier is multiplied by the differential rate. The sum of all these is the total payout.
The SUMPRODUCT formula for Total Payout is:
=SUMPRODUCT( (Attainment > [Tier Min]) * (Attainment – [Tier Min]) * [Differential Rate] )
Variables in brackets  refer to entire column in rate table.
The following splits the SUMPRODUCT formula into multiple columns and rows for a clearer visual of how the formula is calculating the total payout.
The following is a visual example of the Product column plotted on the rate curve. Sometimes it is easier to understand when you see it visually. The SUMPRODUCT formula finds the total payout in each tier based on the remaining balance of attainment multiplied by the payout rate in that tier. This is basically a continuation of the rate curve at each tier to the total attainment of 90%. In the chart below you can see that the dark grey lines follow the rate curve at each tier and then continue on the same curve to the 90% attainment (green) line.
This negative differential rate in tier 4 is important to note. Not only does it make for a confusing calculation, it also tells you that the rate of compensation is not as great in tier 4. For each additional percentage point of attainment, the sales rep is compensated at a lower rate than tier 3. This might mean that there is more emphasis for the rep to attain sales on their quota in tier 3. And the monetary motivation is not as great for attainment in tier 4.
Negative differential can also mean that the rate curve is poorly designed. If the goal is to achieve 100% attainment of quota, then it is probably best to increase the payout rate (rate curve slope) in each tier up to 100%. This design would give the rep more motivation (higher payout rate) as he/she gets closer to achieving their goal of 100% attainment.
Now that we are able to calculate the payout in one cell using one SUMPRODUCT formula, we can apply the formula to a whole list of employees in a table. See the Total Payout % column on Sales Table tab of the example file. This is the major benefit of this formula. The entire calculation can be handled in one cell and it is easily transferable to other models. There are no hard-coded variables in your formula, or ugly IF statements.
Tiered Commission Rates using SUMPRODUCT.xls (101.4 KB)
Here is a file that uses whole number (units or dollars) for the tiers and payouts, instead of percentages.
Here is an alternate solution submitted by Matthew Burgos using VLOOKUP instead of SUMPRODUCT. He explains the formula in detail in the comment below.
I was too the first time I learned this technique. It’s definitely complex. I’d recommend reviewing it a few times with sample workbook and then try to implement it in your own model.
I have another article on how to calculate commissions with VLOOKUP that is an easier calculation for a simple commission plan.
Please leave a comment below with any questions/comments about this technique.
This post will explain a trick for creating absolute structured references in Excel Table formulas.
Structured Reference Tables are great for creating clean, easy to read formulas. But creating absolute references to the columns (aka anchoring the columns) in the formula is a bit tricky.
Duplicate the column references as if referring to multiple columns. Absolute references to:
I have developed an add-in allows you to use the F4 key on the keyboard to create absolute/relative references. You can download the Absolute Reference Add-in here.
Excel has a built-in feature to convert text to numbers, but it can be tricky to use when you are trying to select a long list of cells or multiple rows and columns. In the video below I describe how to use keyboard shortcuts to accomplish this very quickly.
Here’s a quick guide for the keyboard shortcuts to select the range of cells you want to convert.
The Menu Key is located between the Alt and Ctrl keys on the right side of the keyboard. If your keyboard does not have a menu key, you can use Shift +F10 as an alternate.
I find the built-in feature to be the fastest, but there are other ways to accomplish this task:
Do you have a different or easier way? Please leave a comment.
When you have a dashboard with small panel charts it is nice to be able to zoom in on the charts to see the trends better. The ‘Zoom_Chart’ macro included in the workbook allows you to add a zoom button (shape) over the top left corner of the chart to zoom in on the chart. It’s available for free download below. The macro actually resizes the chart to enlarge it, then returns it to it’s original size when the zoom button is pressed again. See the animated screen capture below.
You can control the zoom amount by changing the percentage values for Zoom Width and Zoom Height in cells P5:P6 on the worksheet. These can also be hardcoded in the code if you don’t want the user to change the size of the zoom.
The video above contains a detailed tutorial on how to add the zoom buttons to your own workbook. It’s really a matter of copying and pasting the macro (VBA code) and buttons into your workbook, and then assigning the macro to the buttons. You should still be able to implement this even if you aren’t familiar with VBA or macros. It is important to line up the buttons on the chart correctly and give each button a unique name. So it’s best to watch the video to make sure you don’t miss anything. The steps covered in the video are listed below.
The zoom feature works really well with dashboards and reports where your screen area is limited. If you would like to learn more about charting and dashboards I highly recommend the dashboard course from My Online Training Hub. Checkout my full video review of the course and learn how to become an Excel Superhero! 🙂
The VBA can be further enhanced to add data labels, legends, axis labels, and any additional chart components when the zoom in button is pressed. Please leave a comment with some of the enhancements you made, or would like to see.
Zoom on Excel Charts.xls (82.9 KB)
Zoom on Excel Charts - Bottom Right.xls (84.5 KB)
Zoom On Excel Charts - Top Right.xls (85.0 KB)
The “Bottom Right” file contains modified code that allows you to place the zoom button in the bottom-right corner of the chart. The chart zooms from the bottom-right and expands up and to the left. Zooming from the top-left or bottom-right are the only two options for button placement with this code.
The “Top Right” file contains code that allows you to place the zoom button in the top-right corner of the chart. This option can cause problems if the chart is too close to column A and tries to expand beyond the left side of the worksheet. The location of the chart will move and the chart will need to be manually resized and moved back to align with the zoom button.
Please leave a comment below with any questions or modifications you have made.
The Find All Form for Excel allows you to type a search query in a text box and have the results appear in a list box. The results are narrowed down as you type. This is similar functionality to Google’s auto fill or auto suggest feature when doing a Google search. See the animated screen capture below.
This is a very basic application that mimics Excel’s built-in Find All feature. The code uses Chip Pearson’s FindAll Function in combination with the KeyUp Event in the text box to return results in the list box as you type. A sample workbook with all the code is available for free download below.
The features and capabilities can be greatly expanded to meet your needs. I’ve used this in an add-in that runs searches on general ledger (GL) account codes. The user can quickly search for account codes from the GL or database, and quickly insert them into the worksheet. In my application, the tables containing the account codes are stored in the add-in workbook. I’ve also developed additional processes to automatically update the GL tables as they are updated in the system. This makes the searches extremely fast since the underlying source data is stored in the add-in.
What could you use this tool for? Leave a comment below.
Find All VBA Form.xls (464.9 KB)
File Find All VBA Form (Results on Form).xls (474.6 KB)
The “All Sheets” file above searches all the sheets in the file. The sheet name is included in column 2 of the results along with the cell address. When an item is clicked in the results, the resulting sheet and cell are selected.
The “Copy Paste” file above pastes the clicked item in a list on a Results Sheet. This allows you to track which items the user clicks on in the results list on the form.
In the following video I explain the difference between the color palettes and a solution for making your new workbooks look the same when opened in Excel 2003 or earlier.
The new theme based color palettes in Excel 2007, 2010, and 2013 are great for designing spreadsheets and charts that are visually appealing. But did you know that those colors are being converted to the old 56 color palette when opened in a previous version of Excel? This means your new spreadsheets could look like the following when opened by clients or colleagues using Excel 2003 or earlier versions.
Excel 2007 workbooks contain a 56 color palette that will be used when the file is opened by previous versions of Excel. You can see this palette by opening an Excel workbook and going to: Office Button > Excel Options > Save (option in left sidebar) > Colors… button (after: Choose what colors will be seen in previous versions).
This is the default color palette in older versions of Excel, and Excel automatically converts your new theme colors to these colors.
Does this sound confusing, time consuming, and frustrating? Well don’t worry…
The Color Palette Conversion Tool is a simple utility that retrieves the colors you’ve used in your workbook and updates the previous version palette automatically. With the click of a few buttons you will ensure that all Excel users see the same colors you do in your fonts, borders, and background fills. This is critical for presentation purposes, and general sanity if you have Excel 2007 at work and a previous version at home.
The tool has a few advanced features that allow you to control your previous version palette colors, plan for future designs, make updates in multiple workbooks, and easily view or restore default palette colors. The tool is just a single worksheet in a workbook that contains macros to run this process. You can use it as a stand alone, or add in to your workbooks if you want to make frequent updates.
Here is what your spreadsheets will look like in previous versions after using the Color Palette Conversion tool.
If you’re currently going into your previous version palette and modifying colors, you know how time consuming it can be to change the colors. You have to manually type in the RGB codes for each color you use from the new theme palette. It’s a painful process, but must be done if you want your spreadsheet colors to be universal with all Excel versions. This tool eliminates all that work. I explain the color palettes in more detail on the download page. I hope you find this tool useful and please post questions or suggestions below.
You probably find yourself formatting the same spreadsheets in the same way daily, weekly, or monthly. This can be a very time consuming and redundant task. And even if it only takes you five to ten minutes to apply page layouts or format header rows; those minutes add up and you may lose some consistency if you forget something.
The Format Copier tool automates the process of applying page layout and formatting options to multiple sheets in multiple workbooks. And you can store your formatted sheets, which we will call templates, to use when you have to format the same unformatted reports in the future.
The Format Copier is a workbook that contains:
With the press of a few buttons you will be able to apply your template formatting to multiple worksheets and workbooks.
You’ve probably already figured this out, but the Format Copier will save you lots of time. Especially if you’re formatting the same reports over and over again. The tool is very easy to use and even stores your formatting preferences so you don’t have to remember which formatting options you use for each template.
This tool will help if you spend time doing any of the following in Excel:
Ok, that’s an Office Space reference… And with this tool you won’t ever have to worry about messing up your reports and angering your boss. You might have a general ledger reporting software that exports reports in an plain looking format, or doesn’t format them at all. The Format Copier will transform these reports to your specification, making them easy to read and print. And you will produce reports that are formatted consistently, without having to dig up reports from previous months to compare.
The Quick Access Toolbar (QAT) in Excel 2007 is extremely useful for creating keyboard shortcuts for items that don’t have a defined keyboard shortcut. For example, there is no defined keyboard shortcut to Paste Values but you can easily set it up on the QAT.
The QAT is accessed through the keyboard by pressing the Alt key. Press and release the Alt key and you will see numbers appear next to each icon on the QAT.
So Alt + [the icon number] is the keyboard shortcut for each item. In this example, the keyboard shortcut for paste values is Alt+1. The keyboard shortcut for the format painter is Alt+2.
There are two ways to use the keyboard shortcut.
I tend to move the icons around based on the task I’m working on in Excel. If I’m going to be using the format painter a lot, I will move it to the “1” position (farthest left) while I’m using it. This is mainly because it is easier to Press Alt+1, Alt+2, and Alt+3 on the keyboard by placing your right thumb on Alt and right index finger on the number. The other numbers can be a bit of a stretch, depending on your keyboard.
See my post on how to setup the QAT for more details.
The Quick Access Toolbar (QAT) in Excel 2007 is a great option for shortcuts to your most used commands. It’s faster to click on an icon in the QAT (one click) versus clicking on the ribbon tab and then the command (two clicks + mouse navigation). And you can use keyboard shortcuts for the QAT to make things even easier.
Setting up the QAT is simple and consists of two steps: Adding commands and arranging the icons.
The easiest way to add commands to the toolbar is to:
The command icon will be added to the end of the QAT.
To arrange the icons:
The order of the icons becomes important when you are using keyboard shortcuts to access the commands. And I highly recommend this as a much faster way to execute commands in Excel, versus using the mouse. You can also use the Options window (above) to add and remove commands from the toolbar.
This will depend on what you use Excel for and which commands you use most often. If you are doing lots of data entry and manipulation you might want to have the “Paste Values” and “Format Painter” commands at the top of your list. Reporting and analyzing, you may want some charting and page layout commands. The key is to have the commands you use most often located closest to the left because the keyboard shortcuts are easier to press with your thumb and index finger.
The toolbar can be place above or below the ribbon by clicking the down arrow to the right of the QAT and selecting Show Below the Ribbon or Show Above the Ribbon.
I prefer to have it above because it reduces the total vertical height of the top toolbars, which gives you more spreadsheet real estate. But you may find that you have so many icons that it fits better below the ribbon. If you are a heavy mouse user (vs. keyboard shortcuts) then it is also easier to navigate to the QAT if it is below the ribbon.
Checkout my recommendations on commonly used commands for the Quick Access Toolbar.