Many of us start using Excel to keep track of something. And along way, we realize that Excel has a powerful feature called formulas, using which we can automate a lot of things. BOOM! Before we realize, we are in the thick of VLOOKUPs and SUMIFs.
But, along way, we also pick up a few bad habits or believe a few myths. Today, lets bust 10 Excel formula myths that we hear often.
1. Shorter Formulas are Better
I think it is human tendency to shorten and optimize things. We take great pride if we can shrink a task that takes 10 minutes to 12 seconds. But is it the case with Excel Formulas?
In my opinion, any formula that does the job is better. It does not matter how short or long the formula is. Often, we can come up with a reasonable formula in few minutes, but we waste several hours trying to shorten it. Time that could be used for better things like impressing your boss or shipping a product.
2. IF Formulas are Bad
I dont know where this comes from, but I hear it often. Oh, why use IF formula, as if it is going to slow down the computer drastically. Well, for most cases, we are dealing with reasonably sized data and Excel is fast enough to calculate formulas whether they are IFs or REPTs or something else.
So go ahead and use IF formula, if that is what you need to use.
3. VLOOKUP is slower
Ok, here is another one. For some reason people believe that VLOOKUP is slower than alternatives like INDEX+MATCH, OFFSET+MATCH, MATCH, Array formulas. Well, in my private tests, I found mixed results. VLOOKUP performance is almost same as that of other alternatives for small and medium (10000 rows) sized data sets.
Of course, if you have a workbook with million rows, then you should spend time looking for the fastest formula. Otherwise, just use VLOOKUP and be done.
4. Helper Cells, Helper Columns are Lame
Again, another myth that has no reason to exist. Each Excel sheet has 17179869184 cells and there is no reason why we should not use a few to support us in our formulas or models. Use helper cells, they keep your worksheet simple and easy to understand.
5. Formulas should start with = sign only
Do you know that you can start a formula with + or – sign too?
Well, you can type -SUM(1,2,3) to get -6 in a cell.
Similarly, you can type +SUM(1,2,3) to get 6 in a cell.
PS: You can also begin a formula with @ sign. I am not sure if there are more…
PPS: You can put ‘ before the formula if you just want to show the formula instead of running it. So if you write ‘=SUM(1,2,3), Excel would show =SUM(1,2,3) in a cell (instead of 6)
6. Formulas cannot refer to other Excel Workbooks
Well, that is not correct. You can refer to data in other workbooks in an Excel formula. For eg.
=SUM(sales.xlsx!q1Sales,2000,$H$2:$H$13)
will sum up the named range q1Sales in Sales.xlsx workbook, the value 2000 and the cells H2:H13
Remember, if your workbook is closed, you need to put the full path, like this:
=SUM(‘C:\full\folder\path\sales.xlsx’!q1Sales,2000,$H$2:$H$13)
PS: Certain formulas do not work with closed workbooks.
7. Formulas should be written in a cells only
Well, this is wrong. You can use formulas in named ranges, conditional formatting, data validation. You can also assign formulas to drawing shapes, chart elements (like titles, labels etc.).
See these examples:
5 ways to use formulas in Conditional Formatting
Custom Data Validation with Excel Formulas: Example 1, Example 2, More
Make your charts smarter with Formulas
8. We cannot copy a formula without changing references
Of course you can. If you want to have the same formula as in the cell above, just press CTRL+’
You will get the same formula and you can modify it as you want.
If you want to have the same formula elsewhere, just go to the formula cell, press F2, select everything (SHIFT+HOME), copy (CTRL+C).
Now go to the target cell and press F2 and paste (CTRL+V)
9. Formulas cannot do ‘x’…
May be they cannot feed your cat or take your dog for walk or change a nappy. But there is a formula for almost everything. And Excel team at Microsoft is adding new formulas in each version. It wont be long before a =ChangeNappy(kidname, <optional dispose nappy>) appears. Well, may be.
But the best part is, you can create your own formulas, called as User Defined Functions. And once you start doing that, there is no limit to the possibilities. You can create a CONCAT() to add up a bunch of text values, a NETWORKINGDAYS() to calculate working days based on a custom weekend setup or anything. [More UDF Examples]
10. Formulas are difficult to learn
Only if you think so.
Excel formulas are very powerful and very easy to learn. You need to start slow and go one step at a time. It might take a while to wrap your head around the referencing styles and various formulas.
But once you learn a few simple formulas, rest of them will be easy to learn. And before you realize, you are in the thick of VLOOKUPs and SUMIFs.
Oh, wait, I said that already. But then who says we cannot repeat. That is another myth!
What myths you hear about Excel Formulas?
Thanks to all your emails, comments and forum discussions. I hear about a lot of myths and bad habits all the time, when it comes to Excel. I found that giving in to these myths limits our ability to do more.
What about you? What myths you have heard when you started learning Excel? Please share using comments.
Learn More About Excel & Excel Formulas
If you just started using Excel, then you are at the right place. Go thru below links to learn more.
1. Excel Tutorials for Beginners – 10 videos to start your Excel Journey
2. Excel Formula e-book – 75 Excel Formulas, explained in plain English
3. Excel Formulas – Examples & Demos – More than a 100 examples on Excel formulas
4. Excel School – Online Excel Training Program by Chandoo. With 23 hours of video lessons and downloadable excel files, you will master every aspect of Excel, very soon.
PS: Join our news letter. You will get emails with Excel tips, tricks, tutorials and more, 3 times a week.
17 Responses to “Budget vs. Actual Profit Loss Report using Pivot Tables”
Good Work, Yogesh & Chandoo! Thanks.
Hi everybody,
first sorry I am late to say something about this topic;actually I was waiting last part
second I am not accountant I am an Engineer
third """"Very Important""" the idea is not about Loss but I am sure it is profit
Based on third it shows:
1- How to use EXCEL
2- How to use pivot TABLES
3- How to collect and arrange DATA
4- How to make reports
Many Thanks
Hi Yogesh and Chandoo,
Thank you for sharing your knowledge!
You guys are great!
thanks chandoo and yogesh, thanks for you lessons, are great!....i have a idea for a budget. I try to do it..... thanks for all
Thanks a lot for sharing the most powerful tool worldwide "knowledge"
Warm greetings from Peru
Hi -
This is a really great article because it's a simple and common thing you'd want to do with a pivot table but not at all obvious how to do it! So - muchas gracias to Chandoo and Yogesh!
One thing - I couldn't get past the group error in the sample file. I would click on ungroup but it didn't seem to have any effect. I'd appreciate it if anybody has any pointers here.
-Juanito
Hi Chandoo
I am also having the group error. Can't seem to ungroup? Appreciate if you explain further on the steps required in order to get to calculated items.
Many thanks and keep up the great work.
Cheers
Adam
Hi Chandoo,
I'm struggling resolving the problem depicted below:
I have a set of data, with (among others) a "Region" field (can be APJ, EMEA, or AMS), and a "Country" field.
Unfortunately, I need to group data by the following 4 Regions: APeJ, Japan, EMEA and AMS.
I first tried to make a pivot with Region and Country in the rows (or columns), and then group Country data as per the above.
Alas, as soon as I have a new Country that appear in my data set, my groupings are broken, and I have to redo the job of ungrouping, grouping etc.
I thought I could try to use calculated item, by adding first a new column to my dataset concatenating Region_Country, and create an "APeJ" calculated item that would sum all the "APJ_*" and substract the "APJ_Japan", but again, no clue, as I can't find a way to use any wild card in those formulas.
Given that I already found extremely helpful tips and tricks in your site that helped me manage that bunch of data, I'm pretty sure you'll have a bright idea on how I can solve that one!
Thanks in advance for your lights!
Hi Catherine...
In such cases, I advice using an additional column in the data itself. You can set-up a grouping table else where with country in first column, region in second column. And then in the data, you can add an extra column and use VLOOKUP to fetch the region based on the country.
Then feed this entire data (with extra column) to pivot table and use the extra column to group the data.
Hi Chandoo,
Thank you for your prompt answer.
I finally came to the same conclusion - after a rest 🙂 . I was probably too tired Friday evening (it was rather late), having spent hours in manipulating all my surveys data so as to pull rolling averages, make nice graphs and so on, and was trying to find a complex solution when there was a simple one.
Thanks again,
Catherine
Hey,
Great post!
I for example have different database structure with the following fields :
Date, Expense, Income, Sum (Income - Expense), Category (Sales, Cost of Goods and etc).
Creating a P&L report for the whole year works great. Including gross margin % and etc.
Though, creating P&L report by QTR/Month is becoming impossible since i get the following error : “This PivotTable report field is grouped. You cannot add calculated item to grouped filed.”
Is there a solution for this kind of problem?
Like Adam and Juanito, I also cannot ungroup.
Would appreciate it if you can add a few more lines and a screenshot or two on where to put the mouse cursor to ungroup.
Hi, I have figured out the ungrouping problem. One of the earlier steps was to group by month, if you pull the month back down to the column then right click and then select ungroup, then pull the month back up so you end up with just data source and budget/actual as the headings, then you can continue on.
To solve the ungroup problem, my method is:
Copy the "data" sheet to a whole new Excel workbook
and directly work on Part 6.
And since it is a fresh copy, Excel don't show me the "can't ungroup" problem. Hope this help.
Thank you Yogesh for this wonderful tutorial.
Kent, Malaysia
Just when i thought pivots were awesome i learn about inserting the calculated fields and that makes them more awesome. chandoo where have you been all my life.
Hello - your P&L pivot version has really impressed my boss and would like to use it. I have applied it for a actual vs budget vs forecast model I have created. One problem. In your variance above the operating profit percent % variance shows 33.8% but I want it to show (0.01) point or the true diff from prior budget.
I know I can add calculation to the side but boss would like to see it in pivot table.
Please help
Thanks
I have a further query which may solve my above dilemma. Is it possible to add a column that calculates percent increase. So in the example above a new column would be added to show variance %.
Any help would be appreciated.
Thanks