Excel tips, tricks for financial accounting

Excel tips, tricks for financial accounting

Many businesses rely on Microsoft Excel spreadsheets to keep track of financial data. In this guide, get Excel best practices for using the application for financial accounting.

Table of contents:

Financial accounting with Excel

Microsoft Excel is a popular tool in the world of business financial accounting. Many companies have been taking advantage of Excel’s financial management capabilities, and there are a number of examples of companies that have opted for Excel over other business tools. In 2007, business users at GFI group decided that Oracle E-Business Suite was too complex for their needs, so they dumped their previous technology in favor of Microsoft Excel reports, specifically, GL Wand. While easing into the transition, they started with a sample group of five users, but found that soon most of their employees were demanding the new tool.

eSilicon, a California-based semiconductor company, also favors Excel spreadsheets for financial accounting. It turns out that Excel spreadsheets are still the most common way to do budgeting. Although Excel financial reporting spreadsheets are less efficient, they are also less expensive, which is the deciding factor for most companies when determining how to manage their budgets. Although corporate performance management (CPM) is steadily growing in the world of finance, Excel spreadsheets remain the old favorite for the majority of businesses.

Although many businesses believe they are familiar with Microsoft Excel's functions, there are a number of things that they may be missing out on if they aren’t staying up to date. Exploring some Excel tips for productivity will help businesses reap benefits from using Excel as financial software. Some of these tips include using the audit tool bar, quickly summing up numbers, using the auto-fill series and taking advantage of conditional formatting, to name a few.

Creating Excel financial management reports

For those just getting started with Excel financial reporting, review the basic financial functions the program has to offer. For help getting familiar with Excel's capabilities, read a tutorial that breaks down which calculator keys can help you to accomplish what you need.

Once financial departments have mastered the basics of Excel, they can begin to utilize its more complex functions, such as producing financial forecasts. Forecasting business budgets can be difficult, but trend analysis in Excel is one popular method that, if done right, can simplify the process. For simple regression analysis, gather as much data as possible for what needs to be analyzed and use the trend function. Once numbers have been generated, ensure that they make sense on a high level and get input from other departments to make adjustments as needed.

One of the best data predictors in Excel is the Analysis Services Engine in SQL Server 2005, which has data-mining capabilities that allow users to utilize Excel while being able to access data and data-mining features. Look through examples and screen shots of these functions to better understand their capabilities.

Another Excel tool is Xcelsius Present, which is an SAP BusinessObjects tool that allows users to create new spreadsheets or import existing spreadsheets and then transform the data in one of 10 preconfigured visual templates, such as charts and graphs. There are also interactive gauges that allow users to test what-if scenarios and export those resulting charts, graphs and interactive gauges into Microsoft PowerPoint files that let users manipulate data during presentations.

Transferring data into Microsoft Excel reports

When organizations decide to use Excel for financial reporting, they need a way to successfully transfer data into Excel from another location. The technique that is most often used to do this is automation, which can allow you to call methods and properties that are specific to Excel tasks. To get started with transferring data, familiarize yourself with some of the most common techniques.

Connecting Excel to Linux databases may also present a problem for businesses. The easiest and most popular way to connect Excel to Linux databases is MySQL, a 32-bit ODBC driver that connects ODBC-ready applications to MySQL.

Managing financial data in Excel

Some may wonder if it is possible to maintain data integrity in Excel, but experts say that the Excel data problem can be solved with a few tips. Businesses need to know when it is appropriate to use Excel and when it isn’t and relay that message to employees. Most important, keep the end goal in sight so that conversations between IT and business users don’t end up as a battle.

Sharing Excel files must be done with caution. Both Office 2003 and Office 2007 were built with collaboration in mind, and both versions allow you to share an Excel workbook with multiple users. It is critical to protect the worksheet you've created and lock the cells to ensure that no other user can modify them. Once you learn how to protect your files, you can start taking advantage of Excel's collaboration tools and sharing workbooks.

Connecting Excel with other applications

Linking Excel to other applications allows companies to do more with their financial data. For example, Microsoft PowerPivot provides a system for creating and collaborating workbooks that can deliver enterprisewide business intelligence. PowerPivot is an SQL Server 2008 R2 add-in for Excel designed specifically for Excel 2010 that lets you import millions of rows of data into an Excel workbook from one or more data servers.

Icacls is an administrative tool that aids the IT department in configuring automated permissions, which is important for financial reporting. Organizations use Excel to set up the structure that Icacls then uses to automate permissions.