Some Incredible skills & useful excel functions for accounting

If you are an accountant or wish to become one, you must equip yourself with these skills and some useful excel functions for accounting.  Microsoft Excel is the leading spreadsheet application and that too for accountants. With this handy tool, you can do a lot of magic in no time.

Whether you like it or not, Excel has evolved to be one of the exquisite Accounting software in the field of accounting and finance. But despite its stands in the midst of number crunchers, most of its impressive and useful features is unknown to many accountants, or why they’d even want to use them in the first place.

This spreadsheet program is used across almost every industry. Its overwhelming influence has called for most of its features. That’s why there are lots of features and functions in Excel that you will never use as an accountant. It’s completely your call, to work out the features that will help you accomplish your goals.

Learning every feature and function in Microsoft Excel will not make you an Excel wizard. But learning features and functions that are relevant to your work is what will let people talk about your outstanding skills.

That’s why as an accountant or aspiring accountant, there are some useful excel skills, features, and functions that you must learn. And my aim for this guide is to provide you with information about Excel skills plus some useful excel functions for accounting.

NOTE: This guide is not to teach you these skills or functions, but to let you know about them so that you can redirect your focus when learning Excel for accounting.

Useful Excel functions for accounting

The job of Excel for accountants is not just to create nicely formatted tables. I guess you know that already. Instead, accountants rely on the program’s industrial-strength computing muscle, which aids them to deduce reams of raw data into meaningful information. Excel formulas and functions are made just for that.

But do you know that there are hundreds of prebuild formulas in MS Excel? The good news is: only a few of these functions are useful for accountants. Adding to that, you don’t have to go through all the troubles to figure out what you should be learning in Excel for accounting. I have done that already, after I conducted a lot of research, confronted many accountants with vast knowledge about excel, and also from my own experience.

Thus, here are the top most important and useful Excel functions for accounting you need to know, very clear and simple. Take enough time to find wonderful tutorials on these functions and you’ll be able to tackle any accounting problem in Excel even if you are new to the software.

Must-know Excel Functions

These functions are very important for every Excel user. You already know a lot about Excel if you know how to use them. Irrespective of the work you do, as long as you are using excel, you’ll need to use one of these functions at some point.

Without wasting much time, below is the list of such functions. In future, I’ll publish some awesome tutorials on these functions, but until then, just use the links I recommend or better still, you can use Google.

LOOKUP FUNCTIONS

The Lookup functions let you search for data from your worksheet and extract that data to be reused in ways guaranteed to your liking. The most useful and popular LOOKUP functions are the VLOOKUP and the HLOOKUP. They are used for the same task, i.e. finding and copying data (but they look in separate directions as their names imply.

VLOOKUP is the vertical lookup function. You use it to find a specific row in a large table of data. VLOOKUP works by looking through the values in a single column from top to bottom. Once it spots the entry you’re looking for, it can then retrieve other information from the same row.

HLOOKUP is the horizontal lookup function. You use it to find a specific column in a large table of data. HLOOKUP () works by scanning the values in a single row from left to right. Once it finds the entry you’re looking for, it can then retrieve other information from the same column.

Knowing the above functions is very important and therefore must not be taken lightly.

These are links to good tutorials on LOOKUP functions:

SUM function

This is one of the most popular functions in Excel. Its popularity is influenced by the purpose it serves, which is simply adding a group of cells. Almost every excel sheet created, especially by accountants, has been called on at least once to add some group of numbers.

Thus, with the power of the SUM function, you don’t need to use a calculator, nor wast time. Everything can be calculated in just a blink of an eye.

Here’s a link to a very powerful excel tutorial on SUM Function:

DATE and TIME Functions

Time and date is a very important factor when it comes to accounting. And the Excel DATE and TIME functions are made just for that. The DATE and TIME functions are very useful in so many ways, that’s why you need to learn it.

Learn Excel DATE and TIME functions by using the links below:

Conditional functions

The ability to control the flow of your excel worksheet, letting it make decisions on what to do or function to execute is very valuable to the advanced excel user. While using Excel, at certain times we need to check certain condition to instruct the worksheet to branch accordingly, hence the conditional functions.

Some conditional functions include the AND, OR, NOT, and IF functions.

Here are links to good tutorials on the conditional functions:

COUNTIF AND SUMIF

These functions are as well conditional functions but are more specific. Functions like the IF function are generic which performs different actions depending on the condition met.

SUMIF adds all cells that meet certain criteria. COUNTIF on the other hand also counts all cells that meet certain criteria.

Here are links to some helpful tutorials for these functions:

Other useful Excel skills for accountants

Besides knowing these useful Excel functions, there are some other important features of Excel that must be known. Thus, before you can even include Excel in your CV as one of your valuable skills, you must at least know how to use these Excel tools.

Managing and entering data using tables

Obviously, the grid-like nature of Excel gives you lots of freedom to organize your content. There are a variety of table types ranging from a simple list of dishes to complex worksheets that track expenses.

Well, as an accountant, one of the outstanding skills you must have is the skill to manage data with tables. That’s part of your work after all. So knowing the tools in Excel that will let you control your tables in style, searching, sorting, and filtering your information is very important.

Do you know that Excel is equipped with a group of functions expressly designed to analyze the information in tables? And before you can use these functions, you’ll have to switch to a structured table. These are all skills you need to know to manage data effectively in Excel.

As I said before, I shall publish tutorials on all these features and how to use them. But until I find the time, please use google.

Presenting data with charts

As an accountant using excel, you’ll soon come to know that entering numbers, formatting cells and organizing your layout aren’t what matters in your spreadsheet creation. Instead, the real focus lies in analyzing your data. In other words, finding ways and means to unleash the vagueness behind your numbers. Using charts in Excel is the exact match for this job.

This tool depicts data visually for easy understanding of overall trends. Excel Charting is a very powerful way to reveal the meaning behind large amounts of data. You can generate a simple chart with standard options and more with just a few clicks.

As an accountant, it is safe for me to say that not knowing how Excel charting works means not having enough skills in excel. That’s why you need to learn how to generate straightforward charts using a given data.

Getting familiar with Pivot tables

It is a very common challenge when creating informative summaries out of huge lists of raw data. Even though Excel powers you with all the tools you need to create such summaries, it can be mind-numbing when writing formulas, entering data and organizing totals into a different table.

Luckily, Excel has a feature called Pivot Tables that can handle all these problems. Pivot tables quickly summarize long lists of data. By using a pivot table, you can calculate summary information without writing a single formula or copy a single cell.

Pivot tables are a hidden gem in Excel. Many otherwise spreadsheet gurus avoid them since they seem too complicated at first glance. But Excel accounting gurus must embrace this tool for good. You just need a very good tutorial, and you’ll discover that pivot tables are really just a convenient way to build intelligent, flexible summary tables.

Here’s a link to an awesome tutorial on pivot tables:

Make good use of Excel Templates

Another feature that contributes to Excel’s one-of-a-kind creation is its templates. After successfully creating that budget or expense report, you may want to reuse your hard work instead of starting all over from scratch. That’s why you’ll make a duplicate of your workbook to start changing the data for a similar work. And that’s fine, but with Excel templates, it’s much more convenient.

Excel templates are blueprints that you can use to create new files. They don’t necessarily hold any data (although they can if you want them to). Rather, their main role is to allow you to format them to your own satisfaction – so that as and when you want a worksheet that looks like the template, all you need to do is select the template and there you are – a new file containing all your design elements appears.

Excel templates are thus awesome. It’ll save you tons of time and energy to increase your productivity. It is very important, therefore, to learn how to use the existing Excel set of templates and also how to create your own equally professional templates.

Saving time with shortcuts

Another powerful skill that can save you tons of time is the use of Excel shortcut keys. Excel gives you these handy shortcuts to enable you to navigate around and transport you across your worksheet in great leaps and bounds.

Making worksheets viewer friendly

After creating a basic workbook, you’ve only completed the first step. The next step is to think about whether you’ve formatted your worksheets to be viewer-friendly. It makes your worksheet easy to work with and understand.

Financial Functions

Financial functions may not be very useful to you if you don’t work in a financial institution. However, there may be instances where you’ll have to use these functions for some reasons.

Thus, even if you don’t need these functions at the moment, you should have some fair idea about them, especially what they are used for. If you prepare yourself this way, it’ll help you solve lots of accounting and financial problems with ease.

Below is a list of some useful financial functions you should know.

Functions Description
PMT() Calculates the payment for a loan based on constant payments and a constant interest rate.
IPMT() Returns the interest payment for a given period for an investment based on periodic, constant payments and a constant interest rate.
NPER() Returns the number of periods for an investment based on periodic, constant payments and a constant interest rate
RATE() Returns the interest rate per period of an annuity.
PV() Returns the present value of an investment. The present value is the total amount that a series of future payments is worth now.
FV() Returns the future value of an investment based on periodic, constant payments and a constant interest rate
NPV() Returns the net present value of an investment based on a series of periodic cash flows and a discount rate
EFFECT() Returns the effective annual interest rate, given the nominal annual interest rate and the number of compounding

periods per year

IRR() Returns the internal rate of return for a series of cash flows represented by the numbers in values. These cash flows do not have to be even, as they would be for an annuity. However, the cash flows must occur at regular intervals, such as monthly or annually.
XIRR() Returns the internal rate of return for a schedule of cash flows that is not necessarily periodic.

 This brings us to the end of discussion. Keep your eyes peeled for more as I’ll be adding more in future.

2018-05-18T05:58:53+00:00February 24th, 2018|Microsoft Excel|0 Comments

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