You’ve probably come across someone selling an Excel course. They’re telling you that you need to learn how to use Excel, and you can make millions. Maybe you’ll, or perhaps you won’t. But it emphasizes the importance of this application.
Over the years, Microsoft Excel has evolved into an enterprise application used by most businesses worldwide.
According to an assessment by IntoTheMinds, Excel continues to be a vital part of most businesses’ management.
So how can you take advantage of the power of Excel for your business?
This article discusses three common business uses for Excel that can contribute to an organization’s success, along with some tips for getting the most out of the program.
1. Data Analytics and Reporting
MS-Excel is a spreadsheet application that runs on almost all operating systems like Windows, Mac-OS, Android, and iOS. It helps hugely to store, compute and analyze large sets of data.
One of the most efficient uses of Excel for business is data analytics and reporting.
Data analytics is the practice of examining raw data to discover insights, or patterns, that serve to improve decision-making and business processes. It can include querying data from different sources across your organization and using that data to make decisions and predictions.
For example, gaining a better understanding of customers’ buying habits is becoming increasingly important in today’s retail environment. To that end, retailers can use data from loyalty programs and other sources to identify trends and understand customers’ preferences.
After data analysis, you produce a report – an easy-to-read document describing your findings.
Reports provide a valuable means to communicate complex findings to stakeholders and decision-makers within your organization.
As a result, they can make better decisions about what inventory to buy and how to present merchandise in a physical location or on a website.
Excel makes it easy to combine data from different data sources and create reports with charts and graphics that explain what the data means and where opportunities exist.
In addition, since most organizations use Excel in day-to-day operations, it’s helpful to combine data analysis with business data already available in your organization – and you can do that with Excel.
Some popular features in Excel that business professionals use for data analysis include:
PivotTables let you quickly summarize and analyze large amounts of data by turning rows and columns into data tables in an organized format.
For example, suppose you’re looking for trends in product sales by category over the last several years. You could manually calculate the totals for each product category and weigh each period by sales, but that would take time – and time = money in the business world.
Instead, you could quickly summarize this data using Excel and the PivotTables feature.
Excel’s What-If Analysis feature lets you perform “what if” scenarios with formulas to estimate outcomes based on different inputs.
Let’s say you’re launching a new product and want to estimate your sales for next year based on sales volume for this year. You could do this manually by using the average sales from last year and multiplying it by the projected sales volume for this year.
Or you could set up a workbook and generate many different “what if” scenarios by entering different input values in the workbook and then running calculations for each case.
Using What-If Analysis, you can quickly and easily compare various scenarios to determine your best option.
With conditional formatting, you can highlight key trends or patterns in your data using color coding, icon sets, and borders that indicate specific results. For example, let’s say you want to analyze your customer database – a complex collection of data from sources throughout your organization.
Charts and Graphs
You can quickly generate eye-catching charts and graphs in Excel to present your findings.
For example, suppose you wanted to examine your sales by department. In that case, you could quickly create a bar chart representing each month for the last three years and visually see which departments are increasing or decreasing over time.
Some charts in Excel include Line Charts, Column Charts, Pie Charts, Line Graphs, Step Charts, and Sparkline Charts, to name a few.
Excel’s Analysis ToolPak also contains features you can use for data analysis and modeling, including Goal Seek, Data Tables, Solver, and Data Analysis Expressions. Dashboards/Visualizations Powerful data visualization tools in Excel can help you compellingly communicate your data.
VLOOKUP & HLOOKUP
VLOOKUP & HLOOKUP provide analysts with a way to find a value in a database and retrieve other values corresponding to it. It allows them to connect and consolidate data from multiple Excel sheets.
Excel is a tool you can’t avoid in the accounting world, no matter how senior you are. Analysts, managers, and even directors need to master the software to use it efficiently.
Budgeting, financial statements, and balance sheets are all accounting functions supported by Microsoft Office Excel. It offers standard spreadsheet functions in addition to many sophisticated mathematical features.
Additionally, it supports many add-ons for financial forecasting and modeling activities. This accounting software provides seamless integration with external data to allow you to export and import banking information.
As a result, you can track and analyze your financial data with ease and accuracy using Excel.
Some accounting tasks this application can streamline include:
In Excel spreadsheets, data appears in a table format with support for both in-line and summation calculations, so no ticker tape or accounting calculator is needed.
Since spreadsheet data is reusable and storable, Excel can perform simple calculations and summaries more efficiently than an accounting calculator.
Budgeting and Statements
Microsoft Office Excel comes with templates for cash-flow statements, creating budgets, and profit-and-loss reports – some of the essential documents used in accounting.
Additionally, you can obtain more advanced budgeting and statement templates from Office’s website or buy them from third-party vendors and install them.
Recording Income and Expenditures
When you enter transactions in an Excel spreadsheet, you can define an amount for each item and the date the transaction occurred.
Transactions can be copied to the next month, enabling you to compare values for the current and prior months.
You can define reusable categories that you apply to transactions or create new ones when you create new orders.
These categories can help you identify trends over time or categorize transactions by type: speaker fees or hotel costs. You can also categorize transactions by client or vendor to discover which clients or vendors are paying more or receiving less of your company’s services.
Excel allows you to import data from a wide variety of sources. For accounting, this is especially helpful, as you can consolidate transaction data, bank information, and invoices into one document that will support your accounting tasks.
Before importing, you can store data in several databases and file formats. It allows you to access data from many other parts of your business without entering it manually.
3. Human Resource Planning
HR leaders use various techniques to manage employee data effectively and minimize labor costs while optimizing business output.
They use employee profiles and salary information to schedule the workforce, track employee status, and manage employees’ benefits.
HR leaders also use HR analytics to track employee performance and calculate the cost of turnover using item-level costing techniques. Beyond these tactical HR processes, HR leaders rely on strategic HR tools to gather information on the labor market and communicate with employees.
Many HR professionals use Excel to track employee information and create detailed reports on HR processes such as:
With Excel, HR leaders can create an employee scheduling template that employees can use to update their availability for future shifts. They can customize the template to allow workers to submit requests and schedule changes.
Excel’s Shifts template lets you create a schedule template that calculates the schedule based on employee availability and workload.
You can also use templates to design charts that track employee status and attendance rates over time.
The most common HR task is to drill down and filter an employee database. You can easily filter data in Excel to find employees with particular skills or job functions. You can also use Excel to automate the creation of employee performance reports based on predefined criteria.
For example, you could create a template for a performance review that checks employees’ attendance and reviews their overall performance and skills every six months. As your criteria change, your report will automatically update.
Another HR function Excel can be valuable is payroll processing. You can import payroll data to generate reports to calculate payroll costs and wages per employee, department, or position.
Creating Management Reports
You can create management reports in Excel to analyze employee demographics such as age and gender and employee performance data such as hours worked and overtime hours. HR leaders can use these reports to understand labor trends and generate accurate forecasts for salary costs and other HR expenses.
Some Excel features like TODAY, which calculates the date based on the current date, DATEDIF returns the difference between two dates as integers, COUNTIF, and SUMIF can help HR practitioners streamline their processes.
Related: Google Sheets Training
The Bottom Line: Excel Will Continue to Be Relevant for Businesses
Since its development more than thirty years ago, Microsoft Excel has redefined the capabilities of spreadsheet software. Its user-friendly interface has helped millions of business professionals worldwide calculate and visualize data quickly and easily.
Today, Excel supports dozens of add-ons that extend its analytical and reporting capabilities even more.
Business professionals around the world use spreadsheet software like Excel to manage and analyze the ever-increasing amount of data that businesses generate daily.
Despite the development of newer applications, Excel remains an essential tool for many business professionals and is one of the most popular spreadsheet applications.
You can quickly increase productivity and maximize opportunities by mastering Excel’s features.