Use a driver to calculate variable operating expense as a % of revenue
You can expect some expenses to grow as your revenue grows, for example commission expense. Utilize an Assumption & Driver to model Sales & Marketing Commission expense as a % of Subscriptions revenue by following the steps below:
Be Aware: The example below is a common methodology used for planning operating expense. This example should be adapted as needed to fit your business planning requirements.
- Define the Assumption Table & Commission Rate
Setup > Assumptions > Manage Tables > Add Assumption Table > Name the table OpEx Assumptions > + Add Assumption for Commission %
- Populate the Assumption in the Plan
Plans > Assumption > Populate the table and Save
- Add a Driver for Commission Expense
Plans > Drivers > OpEx > ... > +Add Driver
Then add the relevant details:
Name: Commissions
Output: IS - OpEx $ - Sales & Marketing - Commission
Driver: IS - Revenue $ - Sales & Marketing - Subscriptions
Fx: X
Rate: Key Assumptions - OpEx Assumptions - Commission %
Start: Cutover Date
End Date: Max Date
Helpful Hints:
- When you click on Output, Driver and Rate, you'll be prompted with the UA Picker to guide you in picking the correct Department & Account
- Settings within the Output, Driver and Rate other than Department & Account should remain on the default selections
- Optionally copy the Driver to multiple departments by hovering your mouse in the white space to the left of the driver to enable the context menu, select Clone Driver and update the Department of the Output & Driver for the new cloned driver accordingly .
