While Microsoft Excel can be a great tool for small business owners, helping to manage your finances, there are also several common mistakes that Excel users make. Formulas can be incredibly helpful when they are working - however, they can make your life a lot harder if there are issues. So, how do you avoid common Excel mistakes?
1) External Sources Errors
Being able to pull data from external sources is a great asset to make use of in Microsoft Excel. Regular users of Excel will be very familiar with the window popping up and showing this error message: "This workbook contains links to one or more external sources that could be unsafe?". Of course, that message should be taken seriously, particularly if you are using the Excel spreadsheet in question to manage accounts and are therefore working with sensitive data, such as bank details, in your Excel file.
Should you encounter this problem, the best thing to do is go into "Data" in the menu ribbon and select "Edit links" - this will show you the external sources. Make sure these are updated and if not, you can copy and paste the updated links as plain text. Another way to mitigate any risks to your data is to use a cloud system. Here, all sources are stored in the cloud and it usually is also much safer.
2) Hidden Data
Hiding rows or columns can be an easy way to keep your spreadsheet tidy. Of course, it is an easy mistake to forget about the hidden data and send the spreadsheet to an external party who was not supposed to see the data in your hidden rows or columns. To avoid this, always check for hidden rows or columns before you share a spreadsheet. When sending data, you can also use the following shortcut to ensure hidden data is not shared: "Ctrl+G > Special >> Visible cells only >> OK".
3) Fresh Eyes
While this is more of a general tip for working on important documents, it also applies to Excel spreadsheets. It is always worth checking them for errors with a fresh pair of eyes, so ensure you review a document after a break or even a night's sleep.
4) Manually Spot Check Your Formula
Especially when working with large amounts of data and calculations, ensure that there are no formula errors. While Excel is great for taking the maths off your hands, one small typo or wrong click can throw off your entire calculation. Ensure you check any calculation for a potential formula error. When clicking on a cell, the formula will show in the formula bar at the top of your sheet.
5) Visualise Your Data
Using charts to visualize your data can help in identifying any errors or irregularities. Excel errors are often easier to spot when you visualize your results. If you are planning to share the graphs, make sure no formatting error sneaks in.
6) Send it Safely
If you are manually sending data, safety should come first. If you were to send your accounts in the post, you would not do so without recorded delivery - so make sure that you are just as cautious if you are emailing or physically sending hard copies.
Again, cloud accounting can present a safe alternative. It records the delivery of your data for you.
7) Manually Updating or Forecasting Important Information
Microsoft Excel can do the forecasting for you. However, its forecasting function is very generic and should not be overly relied on for important financial forecasting. Consider investing in a tool that is built for forecasting financial information.
If you do end up using Excel, ensure regular data validation and always use the most up-to-date data available to improve the accuracy of your results.
8) Multiple Collaborators
Be careful when co-editing a sheet at the same time. The more editors, the more versions of your sheet, and the less statistically robust it becomes. Try working on your sheet one after the other to be safe.
9) Blank Rows
While it may be tempting to insert blank rows to keep your Excel spreadsheet looking tidy, Excel will treat empty rows differently. This can, for example, lead to issues with updating your sheet. A less error-prone way of keeping your sheet tidy and improving your data layout is to highlight key data by making it bold or underlining it.
10) Merging cells
Excel's option to merge cells can be very useful in terms of design (blank cells can look a bit awkward), but this can lead to issues when sorting and filtering the data in your document. An option to achieve a similar effect in terms of design is to use the following function: "Format Cells > Alignment > Center".
Excel Mistakes for Accounts FAQs?
- How do accountants use Excel?
A large number of accountants use Microsoft Excel for forecasting and analyzing a company's performance. Excel and its functions are also often used to facilitate a client company's growth.
- What Excel skills are most valuable for accounting?
Data simulations, advanced conditional formatting, pivot tables, and INDEX/ MATCH are amongst the key functions used by accountants.
- Is Excel bad for accounting?
While Excel may be used for small businesses, many accountants and larger companies decide on software designed specifically for accounting purposes.
What should I use instead of Excel?
Some of the widely used accounting software include Sage One, Zero, Zoho Sheet, and Quip.