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15 Excel Functions Accountants Should Know

March 28, 2023

by howtoexcel accounting advanced average averages beginner count countif dates functions index intermediate lookup lookups match sum sumif sumifs unique vlookup

If you’re an accountant, you know that working with large amounts of data can be a daunting task. But with Excel, that work can get a whole lot easier and more efficient. Understanding Excel’s advanced features and functions can improve productivity, reduce errors, make your work more accurate, and most importantly — save you time. Below, I’ll go over some of the most important Excel functions that accountants should know, and provide examples of how to use them. For this example, I’ll use the following spreadsheet. Feel free to download it and follow along with the calculations.

1. SUM

The SUM function is a basic but essential function in Excel. It allows you to add up a range of values, which is helpful when calculating totals, such as revenue, expenses, and profits. Suppose you have a spreadsheet with sales data. In the above example, the total sales are in column G. If you wanted to sum up the entire column, the formula would be as follows: =SUM(G:G)

2. AVERAGE

The AVERAGE function calculates the average of a range of values. It is useful when analyzing data and preparing financial statements. In the above example, suppose you wanted to calculate what the average sale was. To do this, you can just use the AVERAGE function on column G, similar to the SUM function before. Here’s the formula: =AVERAGE(G:G)

3. IF

The IF function allows you to test a condition and return one value if the condition is true and another value if the condition is false. This can be useful because it can send your formulas to the next level. By knowing to use the IF function, you could also use SUMIF, AVERAGEIF, and many other functions that involve an if statement. In the above example, let’s say you only wanted to know if a value in cell M2 was part of the Motorcycles product line. The formula would be as follows: =IF(M2=”Motorcycles”,1,2). If it is part of Motorcycles, you would have a value of 1, otherwise, it would be 2.

4. SUMIF

By knowing the SUM and IF functions, you can combine them together with SUMIF, which is an incredibly popular function. It gives you a quick way to tally up the totals that meet a criteria. For example, let’s say you want all sales that relate to the Motorcycles category. The formula for that would be as follows: =SUMIF(M:M,”Motorcycles”,G:G). If the criteria is met in column M, then the formula will sum up the corresponding values in column G. There’s also the super-powered SUMIFS function, which allows you to combine multiple criteria.

5. EOMONTH

The EOMONTH function calculates the last day of the month for a specified number of months in the future or past. It is useful when working with data that is organized by date. For accountants, this can be useful when you’re calculating when something is due. Let’s say in this example, we need to calculate the date orders need to go out on, and that needs to be the end of the next month. Using the ORDERDATE field in column H, here’s how that calculation would look in the first cell, which would then be copied down for the rest: =EOMONTH(H2,1)

6. TODAY

The TODAY function is helpful for accountants in calculating deadlines and knowing how many days are remaining or past a certain date. Suppose that you wanted to know how many days have past since the ORDER DUE DATE that was calculated in the previous example. Rather than entering in a static date that every day you would need to change, you can just use the TODAY function. Here’s how a formula calculating the days since the deadline for the first cell would look like, assuming the due date is in column N: =TODAY()-N2. The next day you open up the workbook, the calculations will update to reflect the current date; there’s no need to make any changes. There are many more date calculations you can do in Excel.

7. FV

The FV function calculates the future value of an investment based on a fixed interest rate and a regular payment schedule. You can use it to calculate the future value of an investment or savings account. Let’s say that you wanted to save $10,000 per year and expect to earn a return of 5% per year on that investment. Using the FV calculation, you can do that with the following formula: =FV(0.05,5,-10000). If you don’t enter a negative for the payment amount, the formula will result in a negative value. You can also specify whether payments happen at the beginning of a period (1) or end (0 — this is the default) with the last argument in the function.

8. PV

The PV function lets you do the opposite and work backwards from a future value to the present. Knowing that the calculation in example 7 returns a value of $55,256.31, that can be used in the PV calculation to check our work: =PV(0.05,5,10000,-55256.31). The formula returns a value of 0, which is correct, as there was no starting value in the FV calculation.

9. PMT

The PMT function calculates the periodic payment required to pay off a loan with a fixed interest rate over a specified period. It is helpful when determining the monthly payments required to pay off a loan or mortgage. Let’s take the example of a mortgage payment where you need to pay down $500,000 over the period of 30 years, in monthly payments. At a 5% interest rate, here’s what the payment calculation would be: =PMT(0.05/12,12*30,-500000,0). Here again the ending value needs to be a negative to avoid a negative value in the result. And since the payments are monthly, the periods need to be multiplied by 12 and the interest rate is dividend by 12.

10. VLOOKUP

The VLOOKUP function allows you to search for a value in a table and return a corresponding value from another column in the same row. It’s one of the most common Excel functions because of how useful and easy to use it is. It is helpful when working with large data sets and performing data analysis. Let’s suppose in this example that you want to find the sales related to order number 10318. The formula for that calculation might look like this: =VLOOKUP(10318,C:G,5,FALSE). In a VLOOKUP function, you need to specify the column number you want to extract from, which is what the 5 represents. If you’re using Office 365, you can also use the newer, flashier XLOOKUP function. I put VLOOKUP on this list because it’ll work on older versions of Excel — XLOOKUP won’t.

11. INDEX

The INDEX function allows you to return a value from a data set by specifying the row and column number. It’s also helpful if you just want to return data from a single row or column. For example, the sales column is in column G. If I know the order number is on row 20 (which relates to order number 10318), this formula would do the same job as the VLOOKUP in the previous example: =INDEX(G:G,20,1).

12. MATCH

The MATCH function allows you to find the position of a value within a range of cells. Oftentimes, Excel users deploy a combination of INDEX and MATCH instead of VLOOKUP due to its limitation (e.g. VLOOKUP can’t extract values to the left of the lookup field). In the previous example, you had to specify the row belonging to the order number. But if you didn’t know it, you could use the MATCH function within the INDEX function. The MATCH function would look like this: =MATCH(10318,C:C,0). Placed within an INDEX function, it can replace the argument where in the previous example, we set a value of 20: =INDEX(G:G,MATCH(10318,C:C,0),1). By doing this, you have a more flexible version of the VLOOKUP function. You can also create dynamic formulas using INDEX and MATCH that use lookups for both the column and row.

13. COUNTIF

The COUNTIF function allows you to count the number of cells in a range that meet a specified condition. Let’s count the number of values in the data set that are Motorcycles. To do this, you would enter the following formula: =COUNTIF(M:M,”Motorcycles”).

14. COUNTA

The COUNTA function is similar to the previous function, except it only counts the number of non-empty cells. With no criteria, it is helpful to just the total number of values within a range. To calculate how many cells are in this data set, you can use the following formula: =COUNTA(C:C). If there are no gaps in data, then the result should be the same regardless of which column is used. And when combined with the UNIQUE function, you can have an easy way to count the number of unique values.

15. UNIQUE

The UNIQUE function returns a list of unique values within a range, and it’s a much easier method than the old-school way of extracting unique values. If you wanted to extract all the unique product lines in column M, you would enter the following formula: =UNIQUE(M:M). If, however, you just wanted to count the number of unique values, you could embed it within the COUNTA function as follows: =COUNTA(UNIQUE(M:M)). You can adjust your range if you don’t want to include the header.

This is just a sample of some of the useful Excel functions that accountants can utilize. If you are familiar with them, you’ll put yourself in a great position to improve the efficiency of your workflow and make your spreadsheets easier to use. Plus, you can confidently say that you are highly competent with Excel, which can make your resume more attractive and make you better suited for accounting jobs that require advanced Excel skills — and there are many of them that do!.

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Use an Excel Array Formula to Do Multiple Calculations at Once

June 27, 2020

by howtoexcel with No Comment advanced arrays sum sumif

Array formulas can be challenging to understand but they’re worth learning as they can create significant efficiencies for your spreadsheets. Below, I’ll show you how you can do two calculations within a single array formula in Excel.

Using an array to categorize and sum data

To demonstrate how to do multiple calculations, I’m going to use credit card transactions as an example:

Credit card transactions showing descriptions and amounts.

Suppose in column A you have the first letter indicating whether it’s a Visa, Mastercard, or Amex. The numbers afterward could be authorization codes. And then in column B, you have the total dollar amount of the transaction. Without the use of an array, what you might end up doing is creating another column that would use the description in column A to determine the card type. Then, you could use a SUMIF function to calculate the sales volume by card type. Here’s how that might look:

Summarizing credit card transactions using a SUMIF function.

This is an approach I’d expect most people to use. It’s perfectly fine but if you’re not able to add an extra column or need to make your formula more efficient, that’s where an array can be helpful.

Through the use of an array, you don’t have to create that extra column. You can determine the card type and also sum the data all in one cell. Let’s start by calculating all the Visa transactions.

First, we’ll start by determining the card type — this process would have been the same regardless of whether you’re using an array or a SUMIF calculation. And to do this, we need to use the LEFT function to grab the first letter and determine if it is a ‘V’ to indicate Visa. This is how the formula looks like:

LEFT(A2:A30,1)=”V”

Right now, we can’t really use this on its own, it’ll just return TRUE or FALSE values. What we can do is put this formula inside of an IF function and using it as the first argument:

=IF(LEFT(A2:A30,1)=”V”

In the second IF argument, we’ll want to return the values in case the condition is true, and that V is the first character of the corresponding value in column A. In such a case, we just want to return the values that are in column B:

=IF(LEFT(A2:A30,1)=”V”,B2:B30

And if the value in column A doesn’t start with a V, then, in that case, we just want the value to be blank:

=IF(LEFT(A2:A30,1)=”V”,B2:B30,””)

I use blanks rather than a 0 value because it’s cleaner, and you’ll see why that is when I evaluate the formula further down.

The formula will now return a list of values, ignoring those which don’t start with a V in column A. All that’s left now is to sum those values. To do that, we’ll simply wrap the function above inside the SUM function and freeze the cells:

=SUM(IF(LEFT($A$2:$A$30,1)=”V”,$B$2:$B$30,””))

And here’s the result:

Summarizing credit card transactions through the use of an array formula.

If you’re using an older version of Excel, you may need to use CTRL+SHIFT+ENTER to turn this into an array formula. But on newer versions, it’s no longer necessary. I didn’t need to in my case, and I can show you that it still calculates as an array. If I run the EVALUATE FORMULA button on the Formulas tab, you’ll see that it is evaluating each cell and pulling the first letter from each of the values in column A:

Evaluating the first part of the array formula.

Then it converts that into a series of TRUE or FALSE depending on whether those values are equal to ‘V’:

Evaluating the second part of the array formula.

And then it returns the corresponding values if they are TRUE, and “” if they are FALSE:

Evaluating the third part of the array formula.

Notice how easy it is to separate the numbers out from the blank cells. Had I used zeros rather than blanks, it would be a bit more difficult to discern which were Visa transactions and which were not. Anytime you can hide zero values, your data is always a lot cleaner.

The last step of this formula involves just summing all the values, which gives us our total. This is a much simpler approach than having to create another column for determining the card type. You can also use this with other functions. If we wanted to get the average Visa transaction, we could just sub out the SUM function with the AVERAGE function. Arrays are very powerful and can do some incredible things.

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How to Calculate Cumulative and Year-to-Date Totals in Excel

May 4, 2020

by howtoexcel with No Comment charts sum sumif tips & tricks

Whether you’re tracking sales or costs in excel, it’s important to capture not just your monthly totals but your cumulative year-to-date amounts as well. And to do that in excel, you’ll need to calculate a cumulative sum. Ideally, you’ll want to see a current month’s total alongside the year-to-date figure. Below, I’ll show you how to do that as well as how to make cumulative totals work with multiple years.

Calculating the current month and cumulative sums

First thing’s first, let’s start with a data set. This time around, I’m going to pull the monthly tourist information for Las Vegas. This year, that could prove to be interesting given the impact of COVID-19 on tourism in the city. Here are what the numbers looked like for 2019:

If we wanted to calculate the total visitor volume it would be as simple as the following formula:

=SUM(B:B)

However, if we want the cumulative totals then we can’t just grab the entire column. Instead, we’ll need to add another column that has the cumulative amounts for each month. The formulas will still involve the SUM function but they will need to be from January up until the current row. Here’s what the formulas look like:

Las Vegas visitor volume cumulative sum totals.

The formulas for column C are shown in column D. The key here is freezing the first cell (B2) so that as you copy the formula down in C2, it won’t move while the other cells will.

Calculating cumulative values isn’t too complicated, but it’s a bit trickier when your data set spans multiple years.

Calculating the cumulative sum when working with multiple years

The above scenario works well if you have just one year. But it won’t work if you decide to add next year’s data without resetting the formula. Here’s how it would look if we added the 2020 data:

Las Vegas visitor volume cumulative sum totals for multiple years.

As you can see, it just keeps on adding on to the previous year’s data, which is not what we want.

There are multiple ways that you can calculate the cumulative sum per year and so that the calculation resets on its own. Let’s start with the easiest route: adding an extra column for the year. Using the YEAR function we can extra what the year is in column A. Then, rather than using the SUM function, we will use the SUMIF function to do the cumulative count, but only if the year is the same:

Las Vegas visitor volume cumulative sum totals for multiple years with a sumif function.

The logic similar to the earlier formula, we’ve just added a condition where the year in column C has to match the year that specific row belongs to. That’s why once we hit 2020, it resets. For this to work, we still need the months to be in order.

Another way that you can calculate the cumulative total without a helper column is by using an array:

Las Vegas visitor volume cumulative sum totals for multiple years with an array.

We need to evaluate every cell to see if it relates to the correct year, and if it does, it gets included in the range to sum. The array allows us to do two calculations in one: an IF calculation embedded within a SUM calculation which doesn’t require the helper column.

A big advantage of having multiple years on your data set rather than separating them out is then you can put them into a pivot table and create a pivot chart that helps plot both of them:

Las Vegas visitor volume shown on a chart.

From this, we can see that there was a sharp drop off in March due to the outbreak of COVID-19 and that the cumulative figures are now well under 2019’s numbers. By having both cumulative and monthly totals available, we can display them both on one chart that helps to summarize the information quickly and easily.

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Using Summation Formulas (SUM, SUMIF(S), SUBTOTAL)

May 20, 2017

by admin with One Comment beginner subtotal sum sumif sumifs

I have saved this sample file here if you would like to look at the data set and have a closer look at how the formulas work.

In this post I will cover some simple summation formulas and when best to use them. I have a sample data set that has stores, customers, and total sales.

Summing Total Sales

If I just wanted to total all the sales then the SUM function would accommodate this easily. There is even a summation button on the Excel ribbon to easily do this.

It is on the right hand side of the Home tab in the Editing group. It will try to determine which cells you want to sum but you can change this range to what you need.

Since my values are in column C my formula would be as follows:

=SUM(C:C)

Pretty straightforward, all you need is the column that you want to sum (or specific range if you don’t want everything in the column). This returns the grand total of $256,129 from my data set. Another way I could find out the total is if I just highlight the entire column.

The sum will show in the bottom right corner of my screen in the status bar.

If I right click on any of this area I get the following menu:

If you didn’t see the sum in your status bar this is where you can add it. In my example I could select Minimum and Maximum and then those values would also be calculated for any range that I highlight and show up in the status bar. This makes it easier if you quickly want to see an average, total, min or max by just highlighting a range without having to type a formula each time.

Summing Single Store Sales

But now suppose I just wanted to know the sales of Store A. I could filter the data set, select the column, and see the total in the status bar. But that is a bit tedious to repeat each time if I wanted to see sales by each store. In this case, I could use the SUMIF function.

My formula would look like this:

=SUMIF(A:A,”Store A”,C:C)

The first argument, column A, specifies what range I want to look at; the second argument, “Store A”, is what criteria I am looking for; and column C is the final argument, where I want to pull the values from. This formula is saying to look in column A for a value of Store A and add only those related amounts in column C.

Instead of a static reference for Store A I could reference a cell instead, and that would make it easier to apply this formula to multiple stores without having to change the name manually each time.

In the above example assume my store name is in cell E6. If I have the store names going from cell E6:I6 then I could use the following formula:

=SUMIF($A:$A,E6,$C:$C)

You will notice I have frozen some of the cells as well. This will allow me to move my formula across without the ranges changing. Below are what my results look like:

Summing Sales by Customer and Store

Now, consider a scenario where I wanted to do a summary of sales by stores and customers. Here I can use the SUMIFS function (only available to Excel 2007 and newer versions). In the formula below I have stores in cells G12:J12 and customers in cells F13:F16:

=SUMIFS($C:$C,$A:$A,E$12,$B:$B,$F13)

I can copy this formula and it will be updated based on what store and customer intersect at that point. The summary will look as below:

Unlike with the SUMIF function, the first argument here is the range I want to sum, which is column C. The next argument is the range for my first criteria to look up, column A, followed by the criteria I want to match, which in the first formula is cell E12 (Store A). The next two arguments relate to the next criteria range which is column B for the customers and the customer to be matched which in the formula is cell F13 (Customer A).

With the SUMIFS function you can add more criteria than just two. Simply just add another comma and in the next argument specify the range, followed by the criteria. You can keep adding to it as you need.

How the SUBTOTAL Function Works

Unlike the SUM function, the SUBTOTAL function will perform a calculation based on the filters you have applied (if you have none, it will perform a calculation on all the data in the range). The SUBTOTAL function also has an added argument to tell it what type of calculation it should do:

In the below formula, I am going to total column C again, as I did in the SUM formula initially. However, the additional argument I need in the SUBTOTAL function is defining the calculation. Since I am going to just do a sum, I will set the argument to 9. My formula looks as below:

=SUBTOTAL(9,C:C)

Now, if I were to use filters to show only Store A and Customer A, the SUBTOTAL formula would return the same result as the SUMIFS function did for the intersection of Store A and Customer A.

My formula returns a value of $10,796 with the above filters, which matches the result from the SUMIFS formula. The SUBTOTAL function is useful when you are always using filters since it will take those filters into account as opposed to the SUM function which will ignore them. If you don’t use filters then it won’t make a difference.