One of the most powerful data processing tools used in accounting today is Microsoft Excel. Around since 1985, Excel was designed to streamline the processing that happens in data-focused functions, like finance and accounting. With a number of embedded formulas, Excel makes it easy for accountants to do their job right.
There’s a wide range of formulas and functions that are woven throughout the tool, but when accountants finally get comfortable with Excel, there are a few formulas that they’ll keep going back to. VLOOKUP, IFERROR, and SUMIFS are popular, but there are more you’ll come to depend on – keep reading to find out which ones are worth your time.
Excel turns hours and hours of data processing into minutes of work. With the ability to comb through and manipulate large sets of data, Excel single-handedly transformed accounting departments all over the world. Now, even more advanced SaaS tools have taken the spotlight, but Excel will always be an integral part of the month-end close process because of how it has shaped the process itself.
Ready to change how you’re handling your organization’s budgeting, forecasting, and analytical needs? Check out these 6 formulas.
Getting started with something simple yet effective, the CONCATENATE function in Excel allows users to combine multiple snippets of text into one continuous string of text. For instance, if there is a worksheet with a column of company names and a column of their respective headquarters locations, you can merge those two columns of text using the CONCAT formula. Accountants regularly have to merge data together for reporting or tracking purposes, and this makes it a breeze.
When looking at a table with a bunch of suppliers and your organization’s average monthly spend with each supplier, the VLOOKUP formula is a great way to see how much you spend with a certain supplier quickly. VLOOKUP is able to look at one column, say, “supplier,” in this instance, and return the value in a neighboring column in the range, such as “average monthly spend.”
Very similar to one another, SUMIFS and COUNTIFS direct Excel to only account for values that match certain conditions. For instance, if you wanted to know how much revenue came from a certain region, you could use the SUMIF formula to only add together revenue totals from North America.
Even more advanced than VLOOKUP formulas, INDEX returns the value of cells based on their row and column details while MATCH returns the position of the value in the range. Together, INDEX (MATCH) makes it possible to do vertical and horizontal lookups, as well as more complex left lookups and 2-way lookups. If an accountant wants to gather the travel cost data of a certain salesman in January, March, and November, INDEX (MATCH) is the way to go.
In a world that revolves around the end of the month, the EOMONTH formula is crucial. You can say that you want to know the last date of the month 8 months from today, and this formula will spit out the exact date you’re looking for. Because accountants are anchored to the end of each month for reporting purposes, this formula is a must!
Chasing down errors in formulas can be a never-ending task, but with the IFERROR function in Excel, it won’t take all day to figure out where things went awry in your spreadsheet. With IFERROR, you’ll see a certain value get spit out if the formula doesn’t work right. With that information, you can clean up incorrect data in seconds.
Not a formula specifically, but important nonetheless, pivot tables allow accountants to summarize, analyze, explore, and present large datasets in a flexible and dynamic way. Essentially, a pivot table takes data from a spreadsheet and transforms it into an organized summary, that highlights patterns, trends, and comparisons.
Pivot tables enable data summarization, advanced filtering and sorting, data grouping, and drill-down capabilities. To get a true “look under the hood,” a pivot table is absolutely necessary.
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