To navigate the complexities of financial reporting and analysis, mastering advanced Excel functions is essential. While the built-in functions are great, having the added power of a reporting tool like Solution 7 makes building reports based on data in NetSuite easier than ever.
In this blog, we will look at some of the advanced functions that finance teams can leverage to enhance their financial modelling, data analysis, and reporting capabilities as well as highlight Solution 7’s custom NetSuite functions. Finally, we will wrap up by looking at advanced data visualization and financial modelling best practices.
One of the advantages of having NetSuite data in Excel is the flexibility you gain in how you present data. This is possible thanks to the many functions that exist which have been designed to make reporting quicker and easier.
Some of the most helpful Excel functions for a finance team when it comes to reporting include:
VLOOKUP and HLOOKUP:
Function: These functions are used to search for a value in a table and retrieve corresponding information.
Example: Use VLOOKUP to extract the budgeted expenses for a specific department from a large budget table. Similarly, HLOOKUP could be used to find revenue data for a particular product across different months.
INDEX and MATCH:
Function: INDEX returns the value of a cell in a specific row and column, and MATCH searches for a specified value in a range and returns its relative position.
Example: Instead of using VLOOKUP, you might use INDEX and MATCH for more flexibility. For instance, finding the sales figure for a product in a dynamic table.
SUMIFS and COUNTIFS:
Function: SUMIFS adds values based on multiple conditions, and COUNTIFS counts cells meeting multiple criteria.
Example: Use SUMIFS to calculate the total expenses for a specific department and month or use COUNTIFS to count the number of transactions above a certain threshold.
OFFSET and INDIRECT:
Function: OFFSET returns a cell or range of cells offset from a starting point, and INDIRECT returns the value of a cell specified by a text string.
Example: Use OFFSET and INDIRECT to create dynamic ranges for financial models that automatically adjust as new data is added.
XNPV and XIRR:
Function: XNPV calculates the net present value of cash flows on irregular intervals, and XIRR computes the internal rate of return for a series of cash flows.
Example: Use XNPV and XIRR to assess the profitability and viability of investment projects with non-uniform cash flows over time.
PMT and IPMT:
Function: PMT calculates the payment for a loan based on constant payments and a constant interest rate, and IPMT computes the interest payment for a given period of a loan.
Example: To manage debt portfolios, you can use PMT to determine monthly loan payments and IPMT to understand the interest portion of each payment.
Solution 7’s Excel Functions
As well as having access to the standard functions you would expect in Excel, our solution has added extras. Designed to aid in getting NetSuite data into Excel, the functions we discuss below are what finance teams to easily report on any data.
All the Solution 7 functions start with NSGL, for NetSuite General Ledger, are followed by A, N, or T for account number, account name, or account type, and are then followed by three letters. The two basic functions are:
NSGLABAL, NSGLNBAL, and NSGLTBAL:
Function: Each function returns a general ledger account balance either by account number, account name, or account type.
Example: To manage, compare, or consolidate account budgets, use NSGLxBAL to pull from NetSuite directly into Excel.
NSGLABUD, NSGLNBUD, and NSGLTBUD:
Function: Each function returns a general ledger account budget either by account number, account name, or account type.
Example: To manage, compare or consolidate account budgets, use NSGLxBUD to pull from NetSuite directly into Excel.
Advanced Balance Functions
Solution 7 offers a range of advanced balance functions that have been developed to give you more control over the data that you want to return. They can be used to give more granular level control, for example, if you want to do bi-weekly reporting. It should be noted that these are picked up by document date, also known as the tax point date in the UK, rather than using the financial period.
Using the Solution 7 Functions
Solution 7 has been built to sit subtly in Excel, appearing as a tab in the top ribbon. Here you will find the function button alongside a host of other useful features. Then it is as simple as selecting the function you want while in the cell.
Once you have the function entered into a cell, you will be given a user-friendly interface to help build out your formula. For each option, you can either click on cells to select them, type in the bar, or use the lookup button to choose from NetSuite.
Advanced Data Visualization Techniques:
Data visualization is a cornerstone of effective financial analysis, offering a compelling way to communicate intricate insights. Advanced data visualization techniques in Excel go beyond the conventional bar charts and line graphs with things like waterfall charts capable of illustrating cumulative financial impacts over time, and heat maps, ideal for displaying complex data sets with color gradients.
Beyond the aesthetic appeal, these advanced visualization techniques serve a practical purpose, allowing you to distil complex financial information into visually digestible formats. Finance teams incorporating these tools into their repertoire can enhance their ability to present financial data in a compelling and accessible manner, fostering clearer communication and aiding stakeholders in making informed decisions.
Financial Modelling Best Practices:
Well-constructed financial models not only facilitate accurate analyses but also contribute to informed decision-making and strategic planning. Let's delve into key best practices that finance teams should consider when constructing financial models:
Documentation, Version Control, and Modular Design
Finance teams should document assumptions, formulas, and methodology clearly, making it accessible to other team members or stakeholders. Embracing version control practices ensures that changes are tracked, and the model's evolution is well-documented over time. Modular design, breaking down complex models into manageable components, enhances readability, facilitates collaboration, and allows for easier troubleshooting.
Error Checking and Sensitivity Analysis
Effective error checking is crucial to identify and rectify any inconsistencies or inaccuracies in financial models. Finance teams need to implement robust error-checking mechanisms to catch formula errors, circular references, or data inconsistencies promptly.
Sensitivity analysis is a valuable practice that involves testing how changes in key variables impact financial outcomes. By varying assumptions and observing the model's response, finance teams can gain insights into the model's sensitivity to different inputs, enhancing its reliability.
Finance teams should conduct thorough reviews of formulas, assumptions, and calculations to identify potential errors or discrepancies. Auditing also involves validating the model's outputs against external benchmarks or industry standards. Through diligent model auditing, finance teams can instil confidence in the reliability of their financial models and ensure they align with organizational objectives.
As finance teams continue to navigate the intricate landscape of financial management, mastering advanced Excel functions is an invaluable skill. The functions discussed in this blog offer a glimpse into the diverse toolkit available for financial modelling, data analysis, and decision-making. By incorporating these advanced functions into their Excel arsenal, finance teams can elevate their analytical capabilities, streamline financial processes, and make more informed and strategic decisions for the benefit of their organizations.
In adopting financial modelling best practices, finance teams can enhance the efficiency, transparency, and accuracy of their financial analyses. These principles not only contribute to the creation of robust models but also empower teams to make well-informed decisions based on trustworthy financial insights.