As you know, Microsoft Excel is a powerful financial reporting tool for businesses. In fact, it is so powerful that even if you are an advanced user, you are likely not leveraging the application to its full potential when creating reports.
Of course, the team at FD4Cast is always ready to provide you with expert help on the matter. That said, we have also put together some basic tips to point you in the right direction when creating a robust MS Excel financial report for your business.
In this article, we will highlight a few ways in which you can improve the creation and presentation of an Excel report to improve the quality of your end product.
Financial analysts the world over appreciate pivot tables for their power and insights. With properly organised data in your database, you can easily manipulate huge amounts of information to produce a more focused financial report.
In essence, the tables give you a clear view summary of pertinent statistical data from a larger table, either in a new or existing worksheet, helping you to walk away with better insights into the numbers. By setting up custom fields, sorting the table, and filtering the data, you can customise a report in ways that cloud-based software can never achieve.
For a more in-depth view of how to create a pivot table in Excel, take a look at the link here.
Charts and graphs should also be used to present otherwise complicated data into a more easily readable format. They add colour, a sense of aesthetic, and direct your focus on particular aspects of the Excel report data.
If you plan on adding charts to your financial report, it sometimes pays to use 2D visuals to prevent any of the data distortion that occasionally occurs in 3D charts.
When preparing financial models, it is worth automating processes where possible, especially if you are working with a large dataset. Incorporating VBA code which automates the processing of functions and macros, means you can save time when creating complex reports.
In the case that you are compiling your MS Excel report by pulling in data from external sources which have an existing format, avoid copy-pasting information directly into Excel. This is because doing this can create maintenance issues as you lose formatting and mismatches occur between the data and spreadsheet. As you know, broken formulas and user-errors lead to inaccurate and incomplete reports.
The solution is to create a live connection to the databases in question. Microsoft’s Power Query allows you to access data from just about any source and then manipulate it to fit your requirements. The technology gives you a live link to your sources, which means you can automatically reflect new information in your spreadsheets just by refreshing them.
General formatting plays a big part in producing readable financial reports. Unless data is formatted and organised in such a way that makes logical sense to the person examining the report, it is pointless compiling it in the first place.
Furthermore, businesses tend to look for a consistent visual representation of the data when it comes to analysing financial information.
Use left alignment for all row labels and text, while all numeric data should be right-aligned. This makes it far easier for the eye to discern between tables and information. Dates, column headings, and percentage calculations should also be centred for increased readability.
Text wrapping should be used for longer column headings. This ensures that the column heading width is as narrow and concise as possible, while still clearly displaying the text.
The judicious bolding of column headings and titles also make your information stand out. Bolding every instance where a total or subtotal is shown also helps distinguish between these and other numeric data.
A corollary of this is that you shouldn’t use bold too extensively; the effect is lost when it’s everywhere across the Excel report.
Borders are important for separating information and data, but it is also good to know when to drop them. Having an entire financial report covered in excessive borders decreases readability and makes it look less aesthetically pleasing.
Instead, underlining column headings to separate them from the data, as well as framing numeric totals does the job just fine.
Calibri font is the ideal choice for your spreadsheet as it is a narrower font that makes both text and numbers more legible.
Finally, we have conditional formatting. This is another useful tool that improves readability and user experience. It ensures that pertinent data is brought to the attention of the user or separated from secondary data.
Importantly, conditional formatting provides an alternative way to visualise your data by applying formatting that changes the cell’s information dependant on the value within it. This is done by creating a conditional formatting rule, for example setting a cell’s colour to a particular colour once a threshold value has been exceeded.
There are a few ways in which this can be done, with colour changes, data bars, and icon options being some of the most popular. There are also preset styles built into MS Excel that easily create conditional formatting rules for the selected columns or rows.
Anyone who examines a spreadsheet should, at a glance, be easily able to pick up information that matters. However, discerning particular patterns and/or trends can be challenging, so the right conditional formatting can go some way to ensuring that focus is directed where it should be.
This article has provided some useful tips to help you improve your Excel reports and display financial data better. No matter the purpose of your report, whether it’s to produce forecasts for sales analysis, investment, or crowdfunding, implementing these should help you to produce readable and insightful information for your intended audience.