MS Excel Finance Tricks & Tips

Microsoft Excel is a widely used spreadsheet program, but it can be much more than that for accountants, tax advisers and other financial professionals. Accountants can use the advanced features and financial functions built into Excel to help their clients make the most of their money. Accountants can also use Excel to create detailed budgets for their department---or for their entire organization.

Calculate the Future Value of an Investment
1. One of Excel's most useful features for accountants and financial advisors is the Future Value function, abbreviated FV within the program. With this handy function, accountants and other financial professionals can easily show their clients how their savings can grow over time. You might use it to demonstrate the value of regular investing and the power of compounding over a long period of time. To use the Future Value function, you need the current value of an investment, the number of time periods and the approximate interest rate or rate of return. The number of time periods is expressed in months, so you would enter "60" for a five-year time period.

This powerful function will provide the accountant with the future value of that investment based on those assumptions. The beauty of Future Value is that it can be used to run several different scenarios very quickly: Simply enter new numbers in each field and you will instantly see how those changing assumptions affect the final value.
Figure Depreciation
2. Accountants will often need to calculate the depreciation of fixed assets, either for the companies they work for or for their clients. Excel provides an easy to use function that is able to figure depreciation accurately and quickly: the AMORDEGRC function. Accountants can simply enter information such as the cost of the fixed asset, the number of time periods and the salvage price and this function will automatically calculate depreciation information. With Excel it is easy to set up a spreadsheet with this function and run different scenarios to determine the best depreciation schedule for any given asset.

When using the formula, you will need to have some numbers handy. Enter "=AMORDEGRC(" and you will see a pop-up tip asking for cost, date purchased, first period, salvage, period, rate, and basis. The cost should be the purchase price of the asset, the purchase date should be the date it was first purchased, the first period should be the ending date of the first period, the salvage value is the value of the asset at the end of its life, the period is the accounting period used to calculate the depreciation, rate will be the rate of depreciation and basis is the number of days of the month and year to be calculated.
Use Templates
3. With Excel there is no need to reinvent the wheel. Accountants and other financial professionals can simply use one of the financial templates Microsoft provides, either using the built-in templates or downloading one of the additional templates from the Microsoft Office Online site. Some of the most useful financial templates for accountants include budgets, invoices, schedules, statements and inventory forms. By using these ready made templates accountants and other financial professionals can easily create professional documents in a fraction of the time it would take to build a spreadsheet from scratch.