Financial planning and analysis (FP&A) contribute significantly to the creation of value as a result of the insights acquired from translating raw data into relevant information. To make sense of enormous data sets, we need financial planning and analysts with expert knowledge of spreadsheets and BI tools.
Despite the increasing popularity of visualization tools such as Tableau, Microsoft Power BI, Chartio, and Looker, most organizations continue to utilize spreadsheet programs such as Microsoft Excel and Google Sheets.
Although my former company invested substantially in allowing staff to create their self-service dashboards using the aforementioned visualization technologies, my current team often downloads the raw data that underpins the dashboards to undertake in-depth analysis in Microsoft Excel.
Top excel skills for FP&A professionals
For success in financial planning and analysis, you must master the following Microsoft Excel skills.
1. Proficiency in Charts and Visualizations
When dealing with a huge amount of data, it may be challenging to interpret rows and columns of numbers. By giving a visual representation of the data, charts and visualizations facilitate easy comprehension of the information. This is important not just for data analysis, but also for presenting the facts to others, especially those unfamiliar with financial concepts. Microsoft Excel chart editing capabilities are similarly powerful, enabling you to choose from a selection of existing styles and layouts that are fully editable or to create wholly new designs from scratch.
However, it is crucial that chart layouts not be too complicated. It is much simpler to present your case with the aid of uncomplicated charts.
2. Conditional Formatting
By altering the look of individual cells based on whether or not they meet defined criteria, conditional formatting makes it considerably easier to keep track of essential data and evaluate particular information in spreadsheets. For example, negative figures on a balance sheet, such as those indicating outgoing payments, may be shown in red. Similarly, cells with approaching deadlines may be highlighted with a distinct color or font to serve as a reminder of their significance.
3. Look-up functions
Frequently, it is required to combine many forms of data to uncover interesting patterns. If this is the case, it may be difficult or time-consuming to combine data from several sources into a single data set for usage with pivot tables. You will require a comprehensive grasp of lookup functions in these situations. Index/Match and VLOOKUP are the most frequent formulas.
VLOOKUP is a standard analytical technique, while Index/Match may be foreign to others. In the great majority of situations, Index/Match is the preferable tool due to its unique set of advantages.
Similar to VLOOKUP, HLOOKUP may search for many database rows simultaneously. A new function called XLOOKUP has many benefits over Vlookup. It is faster and also easier to use.
4. Pivot tables and pivot charts
Utilizing pivot tables and pivot charts may be quite advantageous for accounting and finance professionals. They have access to a vast array of resources, allowing for a thorough examination of obtained data. Everyone employed in a finance-related area must be able to do a pivot table analysis in Microsoft Excel.
5. Macros
Microsoft Excel scorecards and report upkeep may be tedious and time-consuming. On a weekly or monthly basis, you may be required to do basic data cleansing and calculations, as well as integrate data from many sources utilizing copy-and-paste. This is a need for many financial planning and analysis (FP&A) professions; however, the process may be automated.
Even while we could utilize commercial third-party automation services such as Robotic Process Automation (RPA), we should also investigate a free solution that is currently built into Microsoft Excel. We can automate tiresome processes such as copying and pasting data across spreadsheets or implementing specific formatting standards with the use of macros. It was constructed on Visual Basic for Applications.
Final thought
Regardless of how long you’ve been using Microsoft Excel, it’s always a good idea to bone up on your skills. Given the widespread use of Excel, accountants may execute works of wizardry that are instantly relevant to other business domains.
Keep up with the most recent Excel updates and be aware of the many valuable new features that are always being added to this industry standard. In this guide, we addressed some of the most crucial skills that an aspiring financial analyst or accountant expert should cultivate.