A Comprehensive Guide to Excel for Accountants [+ Free Templates] (2024)

27 June, 2023

10min

Do you feel at ease using excel for accounting tasks? If the answer is no, you’re not alone. In today’s rapidly evolving business landscape, the demand for proficient excel skills has never been higher. Whether you’re managing financial data, creating reports, or optimizing spreadsheets, excel proficiency is crucial for accountants.

“The earlier you develop a strong foundation in Excel, the less time you’ll spend playing catch-up,” says Jared Lane, Senior Vice President, Digital Transformation at HighRadius. “Even though Excel may be considered a traditional tool, it remains a fundamental resource in every accounting office when starting a business.”

In this comprehensive guide, we will cover everything you need to know to leverage the full potential of excel and elevate your accounting excel practice.

Furthermore, we will address pressing excel-related questions, addressed by senior accountants, to enhance your performance for the upcoming monthly financial close.

To truly harness the power of Excel, it’s essential to master the right skills. These skills not only make your work more efficient but also elevate the quality of your financial analysis and reporting. Whether you’re a beginner looking to enhance your Excel skills or an experienced accountant aiming to sharpen your expertise, these skills are the stepping stones to success in the world of finance.

So, let’s dive right in and explore these essential Excel skills that will empower you in your role as an accountant:

1. Data validation mastery: Ensure data accuracy and prevent errors by setting up data validation rules. Control what can be entered into specific cells to maintain the integrity of your financial data.
2. Pivot table proficiency: Transform large volumes of financial data into meaningful insights with pivot tables. Slice and dice data effortlessly to uncover trends, patterns, and anomalies.
3. VLOOKUP and HLOOKUP expertise: Harness the power of these functions to locate and retrieve data from extensive tables. Say goodbye to manual searches and expedite data retrieval.
4. Conditional formatting mastery: Highlight essential trends, outliers, and exceptions in your financial reports. Utilize colors, icons, and data bars to convey critical information effectively.
5. Master Formulas: In Excel, you have a range of formulas at your disposal, from basic ones like SUM to more complex options like IF and CONCATENATE. These tools help you automate calculations, ensuring precise and efficient financial computations.
6. Charting and graphing skills: Use charts and graphs to show your financial information clearly. This helps convey complex financial data in an easy-to-understand and visually appealing manner.
7. Macro automation: Save time and effort by automating repetitive tasks with macros. Record and execute sequences of actions with a single click, streamlining your workflow.
8. Solver proficiency: Optimize financial models and solve complex problems using the Solver tool. Find the best possible solutions to financial challenges with ease.
9. Power query proficiency: Cleanse, transform, and merge data from multiple sources seamlessly using Power Query. Ensure that your data is consistent and ready for analysis.
10. Auditing tools expertise: Maintain data accuracy by using Excel’s auditing tools to trace formula errors and evaluate cell dependencies. Confidently validate the integrity of your financial calculations.

Mastering these essential Excel skills will not only enhance your efficiency but also position you as a valuable asset in the finance world. In the next section, we’ll dive into some advanced tricks and tips to further elevate your spreadsheet capabilities.

To elevate your proficiency and deliver greater value, let’s explore some advanced Excel tricks and tips. These techniques will not only refine your Excel skills but also enhance your effectiveness in financial management. Now that you have a better idea about the types of skills that tend to make you more successful in Excel, here are a few advanced Excel tricks and tips that can take it to the next level.

1. Unlock the power of array formulasEfficiently perform intricate calculations within a single cell by utilizing array formulas. This eliminates the need for extensive formula chains. For example, to calculate the sum of products of two arrays, use the formula =SUM(A1:A10*B1:B10) and press Ctrl+Shift+Enter instead of just Enter.
2. Dynamic named rangesCreate dynamic named ranges that automatically adapt to growing datasets. Your formulas and charts will consistently reflect the latest information. To do this, use the OFFSET and COUNTA functions. For instance, for a dynamic named range in column A, enter =OFFSET(Sheet1!$A$1,0,0,COUNTA(Sheet1!$A:$A),1) as the reference.
3. Master advanced pivot tablesElevate your pivot table skills by incorporating calculated fields, grouping, and constructing multi-level hierarchies for comprehensive data analysis. Explore Excel’s PivotTable tools to access these features.
4. Seamless data consolidationEffortlessly consolidate data from various sheets or workbooks using consolidation functions such as SUMIFS, COUNTIFS, and AVERAGEIFS. For instance, =SUMIFS(‘Sheet2’!B:B, ‘Sheet2’!A:A, “Category1”) sums values in column B where column A matches “Category1” in ‘Sheet2’.
5. Leverage Goal Seek and What-If Analysis
   
   Utilize Goal Seek by going to Data > What-If Analysis > Goal Seek. This feature helps identify the required input for achieving specific outcomes. For What-If analysis, use Scenario Manager (Data > What-If Analysis > Scenario Manager) to explore diverse financial scenarios.
   
6. Sensitivity analysis with data tablesEmploy data tables to visualize how adjustments in variables impact your financial models. They are ideal for sensitivity analysis and risk assessment. Enter your variables and formulas in a structured table, then use Data > What-If Analysis > Data Table to see the results for various scenarios.
7. Custom functions via VBA

   Dive into VBA (Visual Basic for Applications) to craft customized functions tailored to your accounting requirements. Automate intricate calculations using your bespoke functions. Begin by opening the VBA editor (Alt+F11), inserting a module, and writing your VBA function.

8. Explore advanced chartingFamiliarize yourself with advanced chart types like waterfall charts and Gantt charts to convey financial data in a more insightful and visually engaging manner. These chart types can often be found in the “Insert” tab under “Charts.”
9. Enhance data validation with dropdown listsAugment data precision by implementing dropdown lists in cells, ensuring users select from predefined choices. To create a dropdown list, go to Data > Data Tools > Data Validation, choose “List” as the validation criteria, and specify the source of your list.
10. Advanced conditional formulas and formattingGo beyond basic conditional formatting by employing complex formulas to highlight specific conditions within your financial data. Combine logical functions like IF, AND, OR with conditional formatting options to achieve your desired results.
11. Strategic planning with Scenario ManagerUtilize the Scenario Manager to conveniently generate and compare diverse sets of financial assumptions. Ideal for strategic decision-making. Begin by going to Data > What-If Analysis > Scenario Manager and create different scenarios with varying inputs.
12. Data visualization add-insExplore Excel add-ins such as Power BI or Tableau to construct interactive and dynamic dashboards. Import your financial data and use these tools to create compelling visualizations for actionable insights.

These advanced Excel tips will not only augment your professional standing but also significantly enhance your efficiency as an accountant. In our next section, we’ll equip you with the “Must-Have Financial Statements Toolkit for Accounting,” ensuring you possess the requisite tools for optimal financial reporting.

Looking for the best templates and calculators for accounting but don’t know where to start? Here are a few not-to-be-missed financial statements featuring pre-built fields tailored to your business use case.

Income Statement Tools

A step-by-step guide to performing income statement analysis with Excel:

1. Export income statement data from your ERP to Excel.
2. Use Excel’s ‘SUM‘, ‘SUMIF‘, and ‘SUMIFS‘ functions to automate total calculations based on specific criteria.
3. Utilize Excel’s ‘Charts‘ for a visual representation of trends.
4. Pair these with your ERP system’s reporting features for a comprehensive income statement analysis.

Balance Sheet Tools

Excel tricks for accountants for Balance sheet analysis:

1. Classify assets and liabilities into short-term and long-term categories using Excel’s ‘IF‘ functions.
2. Calculate weighted average capital costs using the ‘SUMPRODUCT‘ function.
3. Use Excel’s ‘Tables‘ feature for sorting and filtering exported data from your ERP system, enabling you to find the information you need swiftly.

Cash Flow Statement Tools

Excel tricks for accountants for Cash flow statement analysis:

1. For cash flow statements, Excel’s ‘Data Validation‘ feature is a lifesaver for maintaining consistency across cash flow categories.
2. Implement ‘Absolute References‘ ($A$1) for consistency in calculations across the sheet.
3. Highlight specific cash flow trends using ‘Conditional Formatting‘.

Cash Flow Forecasting Tools

Excel tricks for accountants for Cash flow forecasting analysis:

1. Predict future cash flows using Excel’s ‘FORECAST’ function.
2. Build scenarios using ‘What-If Analysis’ for better decision-making.
3. Monitor variances between actual and forecasted cash flows with Sparklines.

Capital Investment Model Tools

Excel tricks for accountants for Cash investment analysis:

1. Utilize the ‘NPV’ and ‘IRR’ functions for evaluating investment profitability.
2. Employ a ‘Scenario Manager’ to analyze different investment cases.
3. Create a ‘sensitivity table’ to understand how variables impact investment returns.

Expense Report Tools

Excel tricks for accountants for expense calculations:

1. Record expenses systematically with Excel’s ‘Table’ structure.
2. Auto-generate totals and subtotals using the ‘SUM’ function.
3. Get the 10,000-foot view with a ‘PivotTable’ dashboard.

The following best practices dive into how accountants in the field utilize Excel as a tool to complement their ERP systems for conducting practical accounting analyses.

Variance Analysis Excel Best Practices

1. Export large data sets from your ERP to Excel and use 'PivotTables' for organizing and identifying variances. Pivot away to insights!
2. Combine this with the 'VLOOKUP' function to match actual and budgeted figures based on shared identifiers. Think of it as your data detective.
3. Jazz up your analysis with visual aids. Use Excel's 'Charting' capabilities – visual variance analysis can reveal trends that numbers alone may not.

GL Analysis Excel Best Practices

GL analysis often involves a meticulous look at transaction-level detail within accounts to identify irregularities or areas of concern.

1. Play matchmaker with the 'VLOOKUP' function, pairing transactions with their respective accounts in your ERP system.
2. Make entries that meet certain criteria stand out with 'Conditional Formatting'. It's like a high-visibility vest for your data!
3. Use the 'SUMIF' function to aggregate data for specific accounts, simplifying identifying inconsistencies.

These best practices are your tickets to an efficient and effective GL and variance analysis, adding that extra sparkle to your already shining accounting system’s prowess.

Remember, the secret to leveraging Excel is not just in knowing these features but in continuous practice and application in your daily work. Go forth and conquer those spreadsheets!

For accountants, Excel has long been a trusted tool for quick calculations and reliable data analysis. With its well-known formulas, pivot tables, and simple charts, Excel spreadsheets were often sufficient for their needs. But it’s important to acknowledge that Excel has its limits when it comes to handling the complexities of modern finance.

Now, you might be wondering, is there an Excel replacement for finance in this age of digital transformation? Well, the answer is yes, and it’s reshaping the way financial professionals operate.

The financial world is rapidly evolving, and to keep up, finance professionals are embracing innovative tools and technologies that go beyond Excel’s capabilities.

If you’re looking to move on from the limitations of Excel and looking for alternatives that can do a whole lot more, then automated tools like NetSuite’s ERP and HighRadius’s Autonomous Accounting can help—as they are built to do something Excel wasn’t designed for.

From automating repetitive tasks to giving you real-time insights, these tools can help you make data-driven financial decisions by leveraging the power of AI and machine learning.

Also, these automated tools are the secret sauce to handling increased GL complexity.

They can:

• Automate end-to-end financial close processes,
• Swiftly conduct variance analysis,
• Detect anomalies,
• Generate reports for stakeholders at the click of a button, giving you more time to analyze and less time to manually crunch numbers.

So while Excel remains a valuable sidekick, don’t shy away from exploring automated accounting systems that can create super-detailed reports, and help you automate repetitive tasks.

1. How do accountants use Excel?

Excel is an accountant’s Swiss Army knife. From organizing financial data to creating reports, it’s indispensable. Key uses include:

• Data and Variance Analysis
• Financial Reporting
• Budgeting & Forecasting
• Reconciliation
• Automation with Macros

2. Is Excel good enough for accounting?

Absolutely! Excel is a dependable ally for accountants. With its powerful functions, customizable features, and data analysis tools, it streamlines basic accounting tasks. However, combining Excel with specialized accounting software is often the winning recipe for growing and larger organizations.

3. What are advanced Excel skills?

Accountants looking to become Excel wizards should master:

• ‘PivotTables’ for data summarization.
• ‘VLOOKUP’ and ‘HLOOKUP’ for quick data lookup.
• ‘Macros’ and ‘VBA’ for automation and customized functionality.
• Crafting complex ‘Formulas’ for customized calculations.
• ‘Data Validation’ for ensuring data consistency.
• ‘What-If Analysis’ for forecasting and predictive modeling.
• ‘SUMPRODUCT’ for complex multiplicative tasks.
• ‘Absolute References’ ($A$1) for ensuring calculation consistency.
• ‘FORECAST’ function for predicting future values.
• ‘NPV’ and ‘IRR’ for assessing the profitability of investments.
• ‘SUMIF’ and ‘IF’ functions for conditional mathematical operations.

4. What is the most used Excel function in accounting?

The ‘SUM’ function wears the crown here. It’s the go-to for adding numbers, and let’s be honest, accountants do a lot of that. Close contenders are the ‘VLOOKUP’, ‘PivotTables’, and ‘IF’ functions. These tools are essential for data analysis and decision-making.

5. Do accountants need to be good at Excel?

In short: Yes, they should be. Excel is like the bread and butter for accountants. It makes number crunching, data analysis, and reporting a breeze. Being proficient in Excel is not just a skill but an asset leading to better decision-making and efficiency.