From the Not Just Numbers blog:

“A prudent question is one-half of wisdom.”

In too many years of experience helping organisations to make better use of Excel, one truth has become evident:

The higher you move up an organisation, the less they think the organisation uses Excel.

I am currently talking to many accountancy practices and this seems even more true in that industry.

Causes of Excel Blindness
There are a number of reasons why this should be true but it can be incredibly damaging for reasons I will go into later in this post.

I believe that the main causes are as follows:

1. The day-to-day experience of those involved – The higher you go in any organisation, the more your role involves relationships and meetings, rather than hands on number-crunching. Naturally those producing the numbers and analysing them use Excel far more than those discussing them;
2. Belief in computer systems – Having invested in accounting and/or ERP packages (or in the case of accountancy practices, accounts preparation software), and been sold the omnipotent nature of these packages by the software companies, it can be difficult to believe (or face) that there are still large amounts of work done on spreadsheets.
3. Over-simplification of what processes involve – A manager, for example, may understand that a member of the team is emailed a particular piece of information from a customer,a supplier, another branch or another department, and that they enter this into the system. The member of the team involved will know that they receive this information as an Excel file and they apply numerous sorts and filters, delete columns and rows, calculate totals, etc. before they enter it (or even import it) into the system. All of this work is done in Excel – and the manager is completely unaware.

It matters because it can be incredibly damaging to an organisation in terms of both financial risk and inefficiency:

Financial Risk

Not understanding the systems that your business relies upon can lead to errors in systems management don’t even realise are being used. The controls in the ERP system or accounting software may be perfectly adequate, but if the information entered is coming from a spreadsheet with an inbuilt error, they won’t be of much use.

Inefficiency

In most organisations, this is by far the greater cost. Many staff are using Excel for a great deal of their time and have very little training or understanding of how best to use it. Many hours can be cut from most employees’ working weeks, with a little bit of focus on this area.

Let is use the situation described earlier to demonstrate both the efficiency and financial risk elements:

“The member of the team involved will know that they receive this information as an Excel file and they apply numerous sorts and filters, delete columns and rows, calculate totals, etc. before they enter it (or even import it) into the system.”

This whole process could be automated in Excel so that a couple of hours of messing about, could be reduced to a couple of clicks. This not only saves those couple of hours every month, week, or even day, but ensures that the same conversion is applied to this spreadsheet each time, significantly reducing the risk of error.

What can be done?

The first step is to acknowledge how much your organisation uses Excel. No matter how sophisticated your systems are, there are many jobs around the edges of the system for which Excel is not only the best tool, it is often the only tool capable of the flexibility required. Acknowledging this can lead to some very quick improvements to efficiency.

Ensure that you have access to someone (either inside the organisation or from outside) who can look at this Excel use and suggest and/or implement improvements and train staff. I offer this type of service to UK accountancy practices via my Excellent Accountancy business, but please feel free to email me if you wish to discuss how to go about it for any other type of organisation.

Excel is not just Word for numbers, it does form parts of your key processes – whether you like it or not.

Imagine if you took the same lax approach to any other key processes in your business.

A little time and/or money invested in improving how you use Excel will go a long way, as it is such an untapped area in most businesses.

From the Not Just Numbers blog:

“Learn the fundamentals of the game and stick to them. Band-Aid remedies never last.”

When someone comes to me with a problem in an existing spreadsheet, the problem is invariably in the layout of the data. The spreadsheet is built for one purpose and works OK for that until something slightly different is required and it proves almost impossible to get the report that’s needed.

If a few simple rules are followed when laying out your data, then producing additional reports from that data, and using it for different purposes, becomes simple, instead of the nightmare it is for many users.

These rules apply to any lists of data, be it monthly financial information, transactional data (such as lists of sales, purchases, payments or receipts), customer or supplier lists. If you are going to store data in your spreadsheet to produce reports from, you need to follow these rules.

At the heart of these rules is the approach – you are not laying out your final report here, you are laying out the data in a format that can be reported from! These are two very different things (see my OAP approach to reporting in Excel).

The rules to follow:

1. Columns with headings and no gaps
   • Every column should have its own UNIQUE heading, in the first row;
   • There should be no empty columns;
   • These columns represent the fields of a database, e.g. Customer Code, Customer Name, Telephone Number, Email Address, etc.
2. One row per record and no gaps
   • Every record should have all of its data on one row. E.g. in the above example, one row per customer;
   • There should be no empty rows;
3. Don’t group data by putting it in different columns (THIS IS THE ONE THAT ALMOST EVERYONE GETS WRONG)
   • Don’t split out financial or numerical data into separate columns to categorise the data into months, expense categories, customers, agents, etc.
   • Do have one column for the financial or numerical data and create a column for month, expense category, customer or agent, to categorise each row;
   • You can use data validation drop-down lists to select the appropriate category for each row;
   • This one is counter-intuitive because in any report, you will almost certainly will want a column (or row) for each of these categories – but if you do this in the data you will massively restrict what you can do with it.

From the Not Just Numbers blog:

One of the most common misconceptions I come across when helping others to get the most out of Excel is the belief that it is all about learning new functions and capabilities. This misconception is compounded as most Excel training will teach you new functions and capabilities! My Pivot Table Training videos are no exception to this!

Where learning new functions is most certainly useful, it is rarely what holds people back. We can generally learn new functions from a quick Google search or just by using the fx button.

What really transforms what you can achieve using Excel is your approach. If you get the thinking right, you can always find the functions you need to achieve what you want.

My OAP Approach to Excel

One useful method I adopt to help clients change their approach is to teach my ‘OAP method’.

This helps to separate the different tasks a spreadsheet needs to do, so that it does them all well. Trying to address all of these steps together is where most people come a cropper!

O is for Obtain

The O in my OAP approach is for Obtaining Data. This is key to getting your spreadsheet right and will make everything else easier.

Whether the data to be used is to be entered directly into the spreadsheet, or imported from another database or system, there are two factors to take into account:

• Does the layout make it easy to input the information?
• Is it laid out in a way that makes the other steps easier?

If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates and your free report. If you wish to help me to provide future posts like this, please consider donating using the button in the right hand column.

From the Not Just Numbers blog:

Excel is great for being able to apply the same calculation consistently by simply copying the formula to all of the relevant cells, however often there are times where some of the data isn’t how we would like it and the formula throws up an error.

The most common of these is the #DIV/0! error that Excel returns when trying to divide a number by zero. As Excel struggles with the concept of infinity it returns this error. A common situation where this occurs is in a Gross Margin Percentage calculation. We may have multiple products with sales and profit figures and a formula to calculate the margin as a percentage, i.e. profit/sales formatted as a percentage.

This will work fine until you come to a product with no sales where the formula will return #DIV/0!.

This can be addressed using a combination of the IF statement and ISERROR (note that in Excel 2007 and 2010 there is a combined function called IFERROR, however the solution proposed here will also work in earlier versions of Excel). If you need a refresher on how the IF statement works take a look at :

If cell A1 contains the Sales figure and B1, the Profit, then to show the Margin Percentage in C1, we would format it as a percentage and use the following formula:

=B1/A1

This will return the #DIV/0! if cell A1 is empty or zero.

The ISERROR function returns TRUE if its argument returns an error and FALSE if not, therefore

=ISERROR(B1/A1)

will return TRUE when this #DIV/0! would occur.

We also need to decide what we want to appear instead of the error. In this scenario, I usually show 0% which is what I have assumed for the example.

Using the ISERROR formula above as the condition for the IF statement, we can return zero if it is an error, or the original calculation otherwise. So C1 becomes:

=IF(ISERROR(B1/A1),0,B1/A1)

No more #DIV/0! errors!

A similar approach can be used for any other common errors, such as when a looked up value is not in the list.

If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates and your free report. If you wish to help me to provide future posts like this, please consider donating using the button in the right hand column.

From the Not Just Numbers blog:

How many times do we need to pull out a particular category of numbers from a list and add them up. Well, you might not be aware that Excel has a pretty simple function designed to do just that.

The SUMIF function can be used to pull out departmental information from a trial balance, sales information from a transaction list for a particular salesman, department or division (as in the example we will use), or for any other situation where you have a list and need to selectively sum a subset of that list based on criteria.

It is actually a pretty simple function when you know how it works, but is very powerful in the types of situations outlined above.

See below the example situation we will be using to illustrate this function:

This is a simplified situation where we have a list of sales transactions in columns A to C (maybe imported from your accounting software) and want to report total Retail and total Wholesale sales.

We will use SUMIF to return the values in cells F3 and F4.

The format of the SUMIF function is as follows:

=SUMIF(CriteriaRange,Criteria,SumRange)

where CriteriaRange and SumRange are one column wide and the same number of rows as each other in height.

CriteriaRange is used for the column that includes that data that you wish to filter your sum by (in our example, C2:17).
Criteria identifies which item in the criteria range column you want to sum (in our example, “Retail” or “Wholsale” for cells F3 and F4 respectively).
SumRange is used for the column that holds the data you actually want to add up (in our example, B2:B17). This argument is optional and if not entered CriteriaRange is used.

So for our example, cell F3 contains:

=SUMIF($C$2:$C$17,E3,$B$2:$B$17)

Notice I have used the dollar signs to fix the ranges and used the reference to cell E3 rather than the word “Retail”. This can then be copied down to cell F4 to become:

=SUMIF($C$2:$C$17,E4,$B$2:$B$17)


The criteria does not need to be a simple matching as in our example. A condition such as “>0” could be used to sum only positive values (this is an example where you might not enter the separate SumRange as the criteria is applied to the data being summed.

With our example data, the formula:

=SUMIF($B$2:$B$17,”>1000″)

returns £1,431.

Have a play with it and see what you can use it for.

SUMIF is great if you know the exact format of the output that you want and you require a fixed layout. If you want to summarise all of the data in your list dynamically, a pivot table might be more what you need.

If you want this kind of help on hand when you need it, have a look at my Excel Advice by Email service which provides email advice when you get stuck for a small subscription.


If you enjoyed this post, go to the top left corner of the blog, where you can subscribe for regular updates and your free report. If you wish to help me to provide future posts like this, please consider donating using the button in the right hand column.

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