Chris Mishler, CMA, CIA

Excel Best Practices

EMU
April 8, 2010

Overview
Why a CMA? A short intro Benefits of better practices Common Excel observations Excel better practices. Tips & Tricks

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Benefits of Best Practices

Improve the quality of your spreadsheets Increase the reliability of output Reduce errors Increase auditability Improve learning curve for others Well-designed spreadsheets are userfriendly, increasing productivity Look professional

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CMA & Me

Took it during last year of school, passed 1st attempt A raise! A network through which I got my current job Leadership in IMA Student Chapter President Professional Chapter President Michigan Council President National Board of Directors Now what Consultant designing solutions Auditing high risk financial spreadsheets

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Common Observations

Negatively and positively defined formulas

Use of =- or =+ Eliminate them to reduce file size and increase legibility

Use of constants in formulas: =A1 * 0.35

Risk of a rate change not being caught Put rates or multipliers in named range, then can change all instances one time. Easier to understand: Ending_Inv * Average_Cost vs. A2 * B2

Hidden cells (columns, rows, sheets)

Reduce Excel errors (#REF!) by reducing use of hidden cells

Redundant data. Link to it, avoid duplication in headings, look-up tables, pivot tables being copied within a spreadsheet. Non-descriptive tab names like Sheet1 or AFUDC (2). If you copy a page, give it a new, better name. Spelling errors why not hit F7 to check spelling? Youll look even smarter. (Heres a tough one cumulative or cummulative.)
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Common Observations

Blank input cells

Blank rows/columns included in total formulas. Risk increases of entry and totaling errors Use row height/column width for formatting instead Add underlines (borders) for separation instead of blank rows Protect blank input rows or columns

Improper ranges
Blank cells can cause improper ranges when creating SUM formulas Check your work with Arrays (separate slide later)

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EXCEL ERRORS

#/DIV0!
This error is common in time-dependent spreadsheets that include future periods without data. SOLUTION: =IF(B5=0,0,B4/B5). Other Excel errors may also be excluded by using IF(ISERR([your calculation],0,[your calculation]). ISERR covers a multitude of errors. Use it when you know errors will otherwise be shown. It is common to have blank data ranges when the number of rows of data varies, so division or LOOKUPs may cause unnecessary errors.

#NA!
Common in VLOOKUP functions. Use IF(ISNA([your function]) or IF(ISERR() to avoid erroneous outcomes.

#REF!
Often results from hiding cells, then making changes to formulas, deleting cells.

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Best Practices
Spreadsheet Design Color scheme Protect your work Presentation/Formatting

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Design it right from the start

Database mentality Segregation of duties Tabs and Colors Think with the audience in mind (for output) Document it!

Use Input Source Control page Explain how your application works in a tab

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Computers like databases

As much as possible, organize data into contiguous blocks of records. Think: Columns are Fields, Rows are Records. Avoid gaps. Databases abhor vacuums. Once you have a database, custom output is easier. Easier to follow visually and logically.

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Sample of Database Look

Modular Spreadsheet Design

Inputs are contained in a separate worksheet tab, color coded by input type and are referenced by the process calculations Formulas are contained in a separate worksheet tab, colorcoded by formula type, and protected from accidental or unauthorized changes Reports are contained in separate worksheet tabs and linked to output calculations as well as input data and process calculations All check totals and balance figures are contained in a single worksheet to provide a single point of reference for review and approval

INPUTS
(Periodic)

PROCESS CALCULATIONS (Protected)

REPORTS

Workbook documentation is contained in a worksheet within the workbook file

REPORTS

CHECK & BALANCE

Spreadsheet Documentation

INPUTS
(Assumptions & Judgmental)

OUTPUT CALCULATIONS (Protected)

REPORTS

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Separate tabs for separate tasks

Logical grouping makes life easier

Input: Users know where data should be entered, and may stay out of other areas. Calculations: Easy to copy formulas, follow logic. Protect the whole tab. Output: Make as many reports as needed, with the exact look you want, not affecting input or calculations. No need to hide cells. Control: Put crossfooting, check balances, tests together

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Auditing your work

Use an audit worksheet within the spreadsheet to do audit checks

Cross-footing Input balancing or reconciliation Other verifications of accuracy Arrays

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More ways to reduce errors

Use ROUND in formulas to prevent cell auditing errors from excessive decimals Use range names in formulas to make them understandable and more auditable

Use Name Box (left side of formula bar) for speedy range naming

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Range Names

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Using Colors for Clarity

Standardize Color Scheme for quick understanding of structure when inputs, formulas, and outputs are combined in one page
Green for input that changes regularly/periodically (unprotected cells) Yellow for input from external sources such as prices, interest rate, or judgmental assumptions (unprotected) Red for calculations (protected cells) Blue for output (protected cells)

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Cell and Sheet Protection

You work hard for a living. Dont allow unauthorized access to your masterpieces!
Format cells you want to protect as locked
Format>Cells>Protection>Locked

Then protect the sheet

Tools>Protection>Protect Sheet Unless absolutely necessary, avoid passwords in spreadsheet protection. (Hard to manage, not all that secure.)
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Conditional Formatting and Validation

At the cell level Monitor input and output parameters of critical cells Example, Conditional Formatting:

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Cell Validation Example

Presentation more than a pretty face

Standardize Formatting
Decimal places? Two typically, but often may not need those pennies for higher level view. Dollar sign at the top and bottom Limit font styles, colors, font sizes for legibility

Good order promotes understanding.

LABEL sections of the file, including totals Single line above, double line below $ Totals

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Tips and Tricks

Easy copy Microsoft copy and paste shortcut keys Customize your icons or toolbars Conditional Sum Wizard is a whiz See http://excel.tips.net/ for many time-saving tips.

See http://mishlercentral.com/LINKStoLIKE.aspx for some super Excel links

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Easy Copy

Quick copy Ctrl-D, Ctrl-R

Down: Select the cells in the row(s) under the list and press Ctrl+D. To the right: Select a range of cells to the right and press Ctrl+R.

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Quick copy or fill series - Autofill

Autofill So thats what that is! Try it, youll like it.

That little black box in the corner of the cell double-click it at the top of a range and see what happens.
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Microsoft copy & paste

CTRL-INS copies the highlighted item to the clipboard SHFT-INS pastes the clipboard item Available across many applications To fill a range with the upper left cell, select range, enter upper left cell content, then CTRL-ENTER

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Customize your toolbar quick and easy

Drag & Drop

Conditional Sum Wizard

>Tools>Conditional Sum Wizard Especially useful for multiple criteria Uses arrays but you dont have to type the formula. Saves major trial & error time Journal Entries often add the debits (>0) as a control, which conditional sum will do easily. Example on next slide: Sum all positive Gross Profit values.
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Conditional Sum Example

EX: Add all positive gross profit numbers

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Thank you and lets compute with confidence!

REVIEW BEST PRACTICES BENEFITS

QUESTIONS? Chris Mishler christopher.mishler@jeffersonwells.com www.mishlercentral.com

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