Here is a tricky problem often faced by accountants and finance professionals: Let’s say you have 5 customers. Each of them need to pay you some money. Instead of paying the total amount in one go, they paid you in 30 small transactions. The total amount of these transactions matches how much they need to pay you. But you don’t know which customer paid which amounts. How would you reconcile the books?
If you match the transactions manually, it can take an eternity – after all there are more than 931 zillion combinations (5^30).
This is where solver can be handy. Solver can find optimal solution for problems like this before you finish your first cup of coffee.
Reconcile debits & credits using solver model – Tutorial
Step 1. Set up your solver model
In a blank sheet, list credits along a column and debits on the top in few columns, as shown below:
In the blank grid, Solver will fill 0 or 1 indicating whether credit in that row is matched with debit in that column or not.
This area is (C6:G35 in my workbook) is known as variable cell range in Solver model.
There are 2 rules to be followed when matching debits to credits:
- A credit can be matched with only one debit – ie sum of any row in C6:G35 range can be 1, at most.
- Total reconciled amount should be less than or equal to total credits – ie sum of any column in C6:G35 should be less than values in C5:G5 (debits).
To facilitate these rules, also known as constraints in solver parlance, let’s use column H & row 36.
- Write =SUM(C6:G6) in H6 and fill down the formula.
- Write =SUMPRODUCT($B$6:$B$35,C$6:C$35) in C36 and drag sideways to fill the formula in rest of the columns.
Our solver model should look like this:
Step 2: Set up optimization cell
To do its work, solver needs an optimization cell. Our goal is to maximize the amount of reconciled amount. So, in a blank cell write =SUM(C6:G36). This will be our optimization cell.
Step 3: Launch solver
Select the optimization cell (in my workbook, this is J6) and go to Data > Solver. (If you do not have solver, enable it using these instructions.)
Set up solver model as:
- Objective is to to maximize J6.
- Variable cells are C6:G35
- Constraints
- C6:G35 should be binary (o or 1)
- C36:G36 should be <= C5:G5
- H6:H35 should be <= 1
- Solver method is Simplex LP (our problem is linear)
When you are ready, Click Solve. Solver should take few minutes to find the solution.
Step 4: Examine the result
Once solver finds an answer, it will show Solver Results dialog. Click ok (you may also look at the sensitivity report). This loads the solver solution in to variable cell range.
Analyze the numbers and enjoy.
What if Solver solution is not optimum?
Occasionally, Solver fails to find optimum solution for linear problems with integer constraints. In such cases, try again by adjusting constraints & precision.
Download example workbook
Please click here to download the example workbook. Play with the solver model to learn more.
Other ways to reconcile data
If you deal with reconciliation problems, check out below examples to learn more:
- Match transactions using formulas
- Matching transactions using VBA macros
- Compare 2 lists using Excel conditional formatting
- Introduction to VLOOKUP formula – the easiest way to reconcile data
- Use SUMPRODUCT to consolidate revenues
How do you reconcile data?
Solver is a powerful way to reconcile data. It does take some time to set up the model and configure solver, but once your model is ready, Solver does all the heavy lifting.
What about you? What methods do you use to reconcile data? Please share your thoughts and tips in the comment section.
13 Responses to “Using pivot tables to find out non performing customers”
To avoid the helper column and the macro, I would transpose the data into the format shown above (Name, Year, Sales). Now I can show more than one year, I can summarize - I can do many more things with it. ASAP Utilities (http://www.asap-utilities.com) has a new experimental feature that can easily transpose the table into the correct format. Much easier in my opinion.
David
Of course with alternative data structure, we can easily setup a slicer based solution so that everything works like clockwork with even less work.
David, I was just about to post the same!
In Contextures site, I remember there's a post on how to do that. Clearly, the way data is layed out on the very beginning is critical to get the best results, and even you may thinkg the original layout is the best way, it is clearly not. And that kind of mistakes are the ones I love ! because it teaches and trains you to avoid them, and how to think on the data structure the next time.
Eventually, you get to that place when you "see" the structure on the moment the client tells you the request, and then, you realized you had an ephiphany, that glorious moment when data is no longer a mistery to you!!!
Rgds,
Chandoo,
If the goal is to see the list of customers who have not business from yearX, I would change the helper column formula to :
=IF(selYear="all",sum(C4:M4),sum(offset(C4:M4,,selyear-2002,1,columns(C4:M4)-selyear+2002)))This formula will sum the sales from Selected Year to 2012.
JMarc
If you are already using a helper column and the combox box runs a macro after it changes, why not just adjust the macro and filter the source data?
Regards
I gotta say, it seems like you are giving 10 answers to 10 questions when your client REALLY wants to know is: "What is the last year "this" customer row had a non-zero Sales QTY?... You're missing the forest for the trees...
Change the helper column to:
=IFERROR(INDEX(tblSales[[#Headers],[Customer name]:[Sales 2012]],0,MATCH(9.99999999999999E+307,tblSales[[#This Row],[Customer name]:[Sales 2012]],1)),"NO SALES")
And yes, since I'm matching off of them for value, I would change the headers to straight "2002" instead of "Sales 2002" but you sort the table on the helper column and then and there you can answer all of your questions.
Hi thanks for this. Just can't figure out how you get the combo box to control the pivot table. Can you please advise?
Cheers
@Kevin.. You are welcome. To insert a combo box, go to Developer ribbon > Insert > form controls > combo box.
For more on various form controls and how to use them, please read this: http://chandoo.org/wp/2011/03/30/form-controls/
Thanks Chandoo. But I know how to insert a combobox, I was more referring to how does in control the year in the pivot table? Or is this obvious? I note that if I select the Selected Year from the PivotTable Field List it says "the field has no itens" whereas this would normally allow you to change the year??
Thanks again
worked it out thanks...
when =data!Q2 changes it changes the value in column N:N and then when you do a refreshall the pivottable vlaues get updated
Still not sure why PivotTable Field List says “the field has no itens"?? I created my own pivot table and could not repeat that.
Hi, I put the sales data in range(F5:P19) and added a column D with the title 'Last sales in year'. After that, in column D for each customer, the simple formula
=2000+MATCH(1000000,E5:P5)
will provide the last year in which that particular customer had any sales, which can than easily be managed by autofilter.
Somewhat longer but perhaps a bit more solid (with the column titles in row 4):
=RIGHT(INDEX($F$4:$P$19,1,MATCH(1000000,F5:P5)),4)
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