In this article, I will cover a few helpful tips & tricks on how to prepare financial statements in Excel and improve your financial reporting and planning processes. In more than 20 years in the BI industry, I still have yet to see a more versatile solution. All of us are still likely only using a fraction of what this tool can do and often -particularly with all the game-changing features added in the last few years- not up to its current capabilities.
Should You Consider Excel for Financial Reporting?
The ability to do financial reporting in Excel is a valuable skill for any business professional. By using Excel, you can create customized reports that include all the information you need to make informed decisions about your business. You can also use Excel to track your company’s financial performance over time, and identify trends that may impact your business’ bottom line.
Financial Reporting in Excel can help you keep track of your company’s financial health by organizing your data into spreadsheets. You can use formulas and functions to calculate important numbers like net income, cash flow, and debt ratios. Additionally, you can use graphs and charts to visualize your data and make it easier to understand. Excel is a powerful tool for tracking your finances, and with a little practice, you can use it to create informative reports that will help you make sound financial decisions.
List of Top Excel Financial Reporting Tips for Success
Here are my 5 favorite tips that help many of our clients to build reports in Excel more effectively for financial reporting purposes:
Tip #1: Separate Data & Presentation
This is the essential one, on which I have also written a dedicated blog: Excel A BI toy?. If you are using larger volumes of data from other sources available in a structured format, absolutely avoid copy & pasting it directly to Excel. Excel was never meant to be a database. You will only create a lot of maintenance and performance issues.
This is 2018 there are fantastic options to establish a live connection to your data in Excel particularly supported by Power Query which allows you to integrate nearly any source under the sun super easily and transform it to your requirements. As opposed to copy and pasting, this approach will give you a dynamic link to your respective data sources, and the spreadsheet will on refresh automatically reflecting the current state of the data.
When using a flat-file import, it will either update based on the latest version of the file or with multiple flat files. You can configure Power Query to link all files in an upload folder where the data of every new file will be automatically added to your data model.
Tip #2: Excel Formula Views
This one requires the tip before: formula reports require an “OLAP” data source for example Power Pivot (that can be linked to nearly any source e.g. relational tables, etc.) when you want to store data locally in the sheet or solutions like SQL Server Analysis Services (Tabular or Multi-Dimensional) as well as a variety of Third Party options in a client-server configuration.
For effective excel reporting, formula views can be started from scratch or by converting a pivot table (keep in mind it is to best duplicate the Pivot Table beforehand as otherwise it will be lost). The benefit here is you have a report dynamically linked to your source data with complete flexibility in regards to the layout (asymmetric reports e.g. actual previous year/budget current year) as well as great options to update report structures based on formulas:
Tip #3: Excel Pivot Tables
I am still amazed how many finance professionals are not making use of the unparalleled power of the Pivot Table which provides tremendous flexibility for reporting (and with using Acterys equally for planning!). My not so well-known tips here: Make use of drill through (double click on a cell) to get to the underlying records of a cell (unfortunately not supported with DirectQuery yet), use “Quick Explore” to drill into details for another dimension attribute and combine Pivot Tables with Pivot Charts. Here are a few examples:
Split Screen to work with two Pivot Tables
Insights Feature in Excel
Tip #4: Writeback on Pivot Table
For the best way how to do a financial report on Excel, you can use the Acterys Excel Add-in, as it makes these formulas “write enabled”. See how:
Tip #5: Conditional formatting
A great helper particular in conjunction with the Pivot table is conditional formatting (that can even be configured to apply only to particular measure tuples if you are using an OLAP source like Acterys). To help your audience understand data at a glance and put it in perspective for example using a bar conditional format will immediately show the user the significance of a cell before you have to consciously look at the number as well as pointing out outliers.
My recommendation here: be subtle and use colors not too hard on the eye and consider using the conditional format to point out the type of cell e.g. by data scenario: using a white background color for normal cells and shading for a different scenario like “budget” (particularly important when you are using Acterys where the users can enter data in the pivot table. This will immediately show them where they should enter)
Tip #6: General Excel Layout tips
The thousands of client spreadsheets that I have seen often contain absolutely crucial insights but more often than not presented in a way that is not necessarily wanting someone to spend more than the absolutely necessary time with them because they are so horribly ugly. Too often I see brash-colored, grid nightmares. Here are a few tips:
With the titling my tip: use a clear text box click on it and add a dynamic link in the formula bar e.g. =”Financial Results ”&$C$6 to make your title independent of all changes on the sheet and dynamically update according to details selected e.g. in this case by pointing to the cell that contains the time and the company name.
Financial Reporting Made Easy with Acterys Power BI Tool
Acterys is a cloud or on-premise based service for financial data reporting, analysis, planning, and integration with Power BI and Excel. It enables business users to generate professional data models to integrate data sources using connectors with a variety of accounting systems, SaaS, and other sources and helps create automated reports in Excel and Power BI.
Supported by a wide variety of write-back methods and templates (Cost Center, Management Consolidation, HR, CAPEX, Cash Flow, etc.), users can build effective FP&A solutions and performance management processes in Power BI, Excel, web browser and mobile devices the quickest way.