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.
22 Responses to “Master Excel 2007 Ribbon with this Free Learning Guide”
Thank you, kind sir. Well done with the baby making.
I cannot get signed up for your newsletter. I tied both this email address and churchill2001@hotmail.com. never a response.
I cannot get signed up for your newsletter. I tied both this email address and churchill2001_at_hotmail_dot_com. never a response for either attempt.
@Doug, it shows that your email address is pending verification. Can you check your inbox (and may be spam folder too) for an email from me? The subject will be "Activate Subscription to Get your Free Excel Tips E-book"
[...] PPS: If you are struggling with ribbon, you should check out ribbon learning guide. [...]
Very Useful Info..Keep it up..
@Ajay.. you are welcome 🙂
how do u download microsoft excel for free?
http://www.microsoft.com/en-us/default.aspx
Select Office
Free Trial
[...] Excel 2010 UI looks considerably better and less stressful than 2007. The colors are dull and subtle. The icons don’t call for attention unless you want to do something. The menus / ribbons feel smoother and slicker. [Learn to use Excel Ribbon with this Free e-Book] [...]
I can't open this pdf. I get the error message:
You do not have the required license to open this file.
Please request a license from the creator of the file, and add it using the license manager and they try opening it again.
What gives??
I downloaded the file again and it worked this time. Strange. (First file was 116 KB, second was 1644 KB... ???)
[...] More ribbon goodness | Free e-book to learn Excel Ribbon [...]
Hi Chandoo,
thanks for sharing your Excel 2007 learning experience with us; unfortunately the link to the pdf of the free Excel 2007 learning guide seems broken: my Acrobate Readers flags: "Unkown file type or corrupte data".
Have a nice day
Michael
well done this is great
Can somebody just provide a link the classic TAB exportedUI files for MS Office 2003 for us to use in office 2007/2010?. searching online, everybody just wnats to make a buck online with silly Classic Tab installers which do nothing more than inport exportedUI files for you.
Don't give me a ribbon how to guide, just give me free exportedUI files. I should not have to pay anyone for this, it is free XML, MS should have included this to begin with.
thanks
Dear.
There are a set of debit values and a set ot credit values in a column. I want a vba code by whcich the debit value plus a single / multiple credit value is zero that needs to be marked .
finally i will come to know out of the avaibale debits which cannot be used the with avilable credits either single or multiple values.
If multiple matching sets are available let it take the 1st or the 2nd one its not an issue.
Column A Ref
-1000 A
-5000 B
-8000 C
800 A
100 A
100 A
2000 B
3000 B
13000
15000
hi...
how to make this add-ins and display in ribbon... check this sample : http://www.cprsoft.com/GCDemo01.htm
thank you sir...
Please tell me format painter short cut key In excel ?
Thanks In Advance
thankfully.likeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
I am very much happy for such a great opportunity given to excel learners to advance their skills for the betterment of the future. I am a great user of this site and feel proud to have come across this web site.
I appreciate this, because I didn't do much works in my project management studies using gantt chart. As of now are have now learned some advancement.