# How to Calculate An Average Value

Last Updated: July 30, 2019A lot of companies use averages in commission calculations. For example, it is common to see companies commission reps on the average Annual Contract Value of a contract rather than just the first month's value or the total value.

## Calculating an Average Recipe Steps

Let's tackle this in three steps:

- Find or calculate the total value you want to average
- Find or calculate the total duration over which you want to average the total value
- Divide the total value by the duration

## 1. Find Or Calculate the Total Value

The first step in finding an average value is to find or calculate a total value. Let's assume you want to find Average Contract Value. The first step is to find a Total Contract Value. This is typically a field on the CRM.

To do this, we can create a Variable called TotalContractValue in Spiff and put the following into the Variable's formula:

`deal.Total_Contract_Value__c`

## 2. Find or Calculate the Total Duration

This step can be a bit more complicated. But typically you are trying to find the length of a deal's contract. Sometimes you will be lucky and the CRM will already include a calculated field for the total contract duration of the deal's contract. In this case, you would simply create a variable called something like TotalContractDuration with the following as the formula:

`deal.TotalContractDuration__c`

In other cases, you may need to calculate the contract duration yourself. Spiff provides a number of tools to help you do this. Let's assume we have a Contract Start Date and a Contract End Date and we are trying to find the average monthly value of the contract.

To do this, we will make use of Spiff's handy months_to function. You can define TotalContractDuration in this case as:

`months_to(deal.Contract_Start_Date__c, deal.Contract_End_Date__c)`

This will return the total duration of the contract in months.

## 3. Divide the Total Value by the Total Duration

The last step is very easy. We will simply create a new variable called AverageContractACV with this formula:

`deal.TotalContractValue / deal.TotalContractDuration`