Utilise Excel For Accounting & Finance

excel-for-accounting

When it comes to accounting and finance software, one platform that does not need any sort of introduction is Microsoft Excel. Microsoft has created a number of different programs for individuals and businesses to use, and Excel – their spreadsheet software – is undoubtedly one of the most popular.

However, simply installing Excel is not enough. You need to know how to use this platform effectively in order to get the best possible results.

Excel is a powerful tool that can be used across many industries – including accounting and finance – due to its sophisticated calculation features, and ability to record data and create graphs and charts.

finance report in excel

Learning Financial Formulas

There are so many different formulas you can use in Excel, so this is a great place to start! Learning a range of accounting formulas will set you up nicely for a career in finance.

Some formulas you could learn are:

Debt Ratio Formula (Liabilities/Assets)

This is the total amount of debt your company has in comparison with the assets you have. All you need to do here is divide the debt figure by the total assets figure, which is easy to do, as you just select the cells and use ‘/’ for the division sign. 

PMT (=PMT Formula)

You can play around with loan lengths and interest rates by using the =PMT function.

This financial Excel formula is used to work out the periodic payment for a loan, based on constant payments and a constant interest rate. You need to input the amount of the loan, the interest rate per period and the number of periods into the formula.

Excel Formulas For Accounting

XIRR (Returns the internal rate of return)

XIRR is short for Extended Internal Rate Of Return and is used in Excel to calculate an annual return on a series of irregular cash flows that occur at random intervals. You need to input the cash flows and dates into separate columns, and the XIRR formula will do the rest!

FV (=Future Value)

The FV formula in Excel is used to calculate the future value of an investment, with constant periodic payments and interest rates. You need to input the interest rate per period, number of periods and amount of periodic payment into the formula

Excel can be used for so much more than just financial accounting – there are endless possibilities! However, we hope that this has given you a good starting point if you want to utilise Excel for your career in finance.

SYD Function (=Sum-Of-Years’ Digits Depreciation)

The SYD function in Excel is used to calculate the sum-of-years’ digits depreciation of an asset for a specified period, using a depreciation coefficient.

You need to input the cost of the asset, salvage value and life of the asset into the formula.

DDB Function (=Double-Declining Balance Depreciation)

The DDB function in Excel is used to calculate the double-declining balance depreciation of an asset for a specified period. You need to input the cost of the asset, salvage value and life of the asset into the formula to calculate the depreciation

SLN Function (=Straight-Line Depreciation)

The SLN function in Excel is used to calculate the straight line depreciation of an asset for a specified period. Again, you will need to input the cost of the asset, salvage value and life of the asset into the formula.

Excel can be an extremely useful tool for accounting and finance, as it can be used to calculate a range of different formulas quickly and easily. We hope that this has given you a good starting point!

Analyse Financial Data Effectively

In your role as an accountant or financial advisor, you may be asked to evaluate data from one system to another. The perfect tool for this is VLOOKUP.

This is a function that enables you to look for data and retrieve it from a certain column within a table. The formula you need is =VLOOKUP(lookup_value, table_array, col_index_number, [range_lookup]) for the VLOOKUP function.

Excel For Accounting

Use Pivot Tables To Manipulate Client Data

When you have a detailed and large set of data, using a pivot table is recommended because you will be able to manipulate this data with ease. These tables are interactive.

They help you to assess data so that patterns can be detected and comparisons can be made. All you need to do is use the built-in PivotTable and PivotChart Wizard to get started, which can be found in the ‘Data’ menu. 

11 Excel Tips For Accountants & Financial Advisers

On top of learning some key financial formulas, how to analyse financial data and the use of pivot tables to manipulate client data – we’ve put together some great tips that can also come in handy!

Use The AutoSum Function To Quickly Calculate Totals

The AutoSum function can be found in the Home tab, under the Editing group. Simply select the range of cells that you want to sum and press Enter – Excel will automatically calculate the sum for you!

Use Formatting To Highlight Important Data

You can use different formatting options to make your data stand out – this is especially useful when presenting data to clients. For example, you could use conditional formatting to highlight cells that meet certain criteria.

Create A Drop-Down List To Ensure Data Is Entered Correctly

If you want to ensure that data is entered correctly, you can create a drop-down list of options. To do this, go to the Data tab and select Data Validation.

Add Links To External Files & Websites

If you want to add links to external files or websites, simply select the cell where you want the link to appear and then press Ctrl + K.

Spreadsheet Formulas For Accounting

Insert A Copyright Symbol

To insert a copyright symbol, press Alt + 0169 on your keyboard.

Use The Spell Check Function To Check For Errors

The spell check function can be found in the Review tab, under the Proofing group. Simply click on Spell Check and Excel will scan your document for any spelling errors.

Create A Macro To Automate Repetitive Tasks

If you find yourself doing the same task over and over again, you can create a macro to automate this process.

Use Custom Filters To Find The Data You Need

Custom filters can be found in theSort & Filter group on the Data tab. They enable you to filter data in a variety of ways so that you can find the information you need quickly and easily.

Generate Random Numbers With The RAND Function

The RAND function is a built-in function that is used to generate random numbers.

Use Text To Columns To Split Cells

If you have data in one cell that you need to split into multiple cells, you can use the Text to Columns function. This can be found in the Data tab, under the Data Tools group.

Track Changes To See Who Has Made Alterations

If you want to track changes to a document, you can do so by going to the Review tab and selecting Track Changes.

So there you have it – some useful tips that can help you to make the most of Microsoft Excel.

If you have this software for spreadsheets as part of your MS Office package, then be sure to request Excel help to ensure you are making the most of everything that it has to offer.