Excel and Business

The question of the day is: How important is strong working knowledge of Excel in today’s business environment, particularly finance and accounting?

I started writing an email response to this, but after 100 words of how important Excel is, I decided to make it a blog post. Plus, I didn’t really believe what I was writing. I wrote a couple hundred words of a blog post which basically said that Excel isn’t that important, but erased all that. I conclude that this question is too vague and that’s why I’m so schizophrenic regarding my answer. For my third attempt, I’ll answer some questions that weren’t even asked. These answers and opinions will be geared toward finance and accounting, but feel free to leave your own opinions from your own perspective. With the help of businessenergyuk.com you can save a lot on electricity and help your business as well.

Will Excel skills help me get a job?: Absolutely not. Every resume I’ve ever seen lists Microsoft Excel under the skills section. My resume says “expert-level proficiency in Excel” to help it stand out. It also mentions this blog and my MVP award. Like every Tom and Harry that lists Excel as a skill, I list Word, Outlook, Access, etc… as skills – to which experts in those areas may scoff. Listing Excel and other Office apps on your resume is a given. The only way those will stand out is if you omit them.

In March, I took an Excel test at Robert Half in Tucson (I can talk about this now!). I scored 100% and was the second person ever to do it in the Tucson office, according to the receptionist. They were duly impressed, but it wasn’t too difficult. The next day, they asked me to come down and sit for the Access exam. I did and scored 100%. The receptionist told me I was the only person to ever get all the questions right on that one. The receptionist’s comments have more to do with the quality of the test takers than my skills with either Excel or Access, I assure you. The point is, I blew those tests away and got exactly zero job offers. Anecdotal though that story may be, I firmly believe that you will neither get hired nor fired based on your Excel skills.

Are Excel skills a step on the corporate ladder?: Maybe, but they don’t have to be. If Excel skills can help get your job done faster, more efficiently, or with higher quality, then certainly they can help you progress. I just don’t know any VPs of Finance that use Excel at any advanced level. Were these people advanced Excel users on their way up, but just quit using it when they got that corner office? I tend to think that other skills are more important if that’s the objective.

Enough about what Excel isn’t, let’s talk about what Excel is. Excel is ubiquitous throughout the world’s business offices. According to a podcast I heard, Excel is the second largest data store behind Outlook. It is, in my opinion, the largest significant data store. Just because people don’t clean out their Outlook pst, doesn’t mean that data is particularly meaningful.

Microsoft Office’s market share is somewhere north of 95%, I think. That makes Excel important simply because it’s on so many desktops. Even if you work for a company in the minority, Excel skills would be useful because they translate so easily to the competition, mostly StarOffice and OpenOffice. It is a given that everyone who works in a business office should have some rudimentary Excel skills. I would argue that those workers who have advanced Excel skills will produce better results than their less skilled co-workers.

I’ve never heard Excel referred to as a large data store before, but it’s an intriguing idea. Just think of all the data in all the workbooks in your office. If you added up the sizes of all those workbooks would it be more or less than the SQL Server, Oracle, or Pervasive databases? I haven’t done it, but I’m sure the Excel workbooks would be twice the size of the 300MB Pervasive databases in my office. There’s a lot of information out there in XLS format and your ability to work with that data could be very important.

Excel is a tool. If you know how to use the tool, it can be to your benefit. If you only have a rudimentary knowledge of how to use the tool, the benefit will be limited. If you are a master of the tool, your work product will look more like art than work. Business people should learn how to use all of the Office applications, but the application that’s central to your job should be mastered, not just learned. Secretaries should master Word. Accountants should master Excel.

Final question: Should university require advanced Excel classes for accounting/finance majors? I think, yes. If the universities don’t teach it, the accountants will have to learn it on their own. It’s the job of the university to prepare the students for their chosen field. If they don’t teach Excel, they aren’t doing their job and someone else will be forced to do it. Namely, the employer.


14 thoughts on “Excel and Business

  1. VBA in finance is an advantage. Everything you do in financial services involves spread sheets. You will be a star if you can automate your department’s spread sheets. You can probably be sent to the trading desk, which is what everyone wants, to help traders engineer their pricing and risk models. A position on a desk can lead to trading or other front office roles.

    But then again, not to open up old wounds, your VBA skills will most likely be replaced by someone with VSTO skills in the future. I’m not saying soon, but it is inevitable. I’ve read Eric Carter/Lippert’s VSTO book and they’ve mentioned that this is only a transition period, soon Excel objects will be changed so that it will be more natural for .Net. VBA will not be around in the future. Someone please correct me if I’m wrong.

  2. To play Devil’s Advocate a bit here …
    As an interesting alternative viewpoint, with all the SarBox regulations now there seems (from where I’m sitting anyway) to be a lot of pushback coming from IT people that Excel spreadsheets are uncontrolled and need to be reigned in (yeah right, I’m going to swap my Excel models for your SAP BW – I don’t think so!).

    My personal feeling is that Excel is irreplaceable in modern business and therefore any improvement in your skills must be of benefit. However, most people evaluating someone for a job will take Excel skills as a given because they just won’t appreciate the difference between beginner and advanced.


  3. Advanced Excel skills combined with subject knowledge, motivation, general problem solving skills, creativity, confidence, acceptable communication skills and a boss that understands how to use your skills if all presesnt can make you the super-star problem solver of the office. I doubt any company intentionaly goes out to try to hire one of these. And how could they? That said, advanced excel skills without the nessecary complimentary skills isn’t worth all that much.

  4. “If they don’t teach Excel, they aren’t doing their job and someone else will be forced to do it. Namely, the employer.”

    And most employers assume that their employees are smart enough to get to grips with Excel on their own, without any training.

    Yeah, right, sure.

    They will learn. But it is far from effective and many of them will never really outgrow the beginner level.

  5. Dick,

    I can agree with most of the opinions You state but not all of them.

    # University

    I dislike that higher education support commercial tools like MS Office.

    Preferable is to use other similar tools as OpenOffice et al, at least in my part of the world, as the public education system is financed with public resources.

    The target with tools like Excel et al in higher education is not to get well trained students in how the tools works. The target is to create relevant information for decision making and simulations of business interest, i e the focus is on decision making and not the tool itself.

    # General
    Excel has now been around for nearly 20 years and
    companies as well as individuals assume that co-workers at least has got the basic knowledge under the belt.

    Right or wrong? I can only refer to what I see and I’m no longer surprised over the low level.

    # Corporates vs individuals
    For corporates Excel is not a critical tool/platform while for individuals it still is and perhaps always will be.

    Kind regards,

  6. I agree with your comments.

    Everyone now seems to “know” Excel. What they know is minimal. Most haven’t taken a formal course to really learn Excel. What I have learned over the years comes out of a strong interest to be able to use it as a true helpful tool. I used to think that everyone should learn it but have come to the conclusion that I will develop a program so they can use that. I password protect it and then hope they don’t goof it up.

    The best sources for learning Excel has been J-Walk books and website, then your blog! Always glad to see your posts. – an Architect, Tacoma

  7. “The target with tools like Excel et al in higher education is not to get well trained students in how the tools works. The target is to create relevant information for decision making and simulations of business interest, i e the focus is on decision making and not the tool itself.”

    I agree but there are many people using Excel with skills to use the tools insufficient to generate the right information in the right way so that the right decisions are made.

    I have inherited many spreadsheets that were badly designed, flawed and full of bugs. How good were the decisions made with that information.

    In many ways, Excel is a dangerous tool in the wrong hands. Proper training is critical.

  8. Nearly evey post mentions it but are we not seeing it? Excel is a tool! A wonderful, versatile tool but still just a tool.

    A pencil, a hammer, a shovel, a truck and a gun are also tools! They all are devices that aid us in performing a task. They allow us to do something better, faster or in a larger quantity than we could without the tool.

    Training in the basic concepts is most important. Once that is understood the need to master Excel will be obvoius.

    To focus on the how and not the why dooms people to dead-end career paths.

  9. Dick,

    I agree with you for the most part. Dennis makes a good statement though when he says that Excel is just a tool. There are other tools available and educating Excel at university is ok as long as people are also tought that there are other tools available and that they shouldn’t limit theirselves to just one solution. In spreadsheet land there are numerous other players and I reckon that some of those are more suitable for certain jobs then Excel. To get the best solution you have to be open minded to all options.

    You, me and most other people reading this have trained themselves to use Excel, exploring options and possibilities, trying to get as much out of it as we can. But, ironically, in doing so some folks also narrow their view and tend to use Excel as a wonder-cure for most problems. How many examples do you know of people using Excel as a semi-database whilst a (real) relational database would have been a better choice?
    Note that at this stage one doesn’t need detailed knowledge of databases yet, just knowing the key differences between spreadsheets and databases would have been enough to make an other decision.

    I think we should look at that process as a more general way of solving problems. Don’t learn people to stick with just one ‘solution’ but make them aware of the fact that there are multiple tools to choose from, sometimes even different methods. That’s what they should teach at university. Of course, students ahve to practice and Excel isn’t a bad choice given the fact that they are likely to run into it in real life. But solving real life problems are details, and are found downward in the tree of decision making when it comes to solving problems.

    One more thing: I totally agree with you that placing it on your resume isn’t really going to help you getting a job. However, once you got the job and get the chance to ‘show off’ with what you can do with Excel it will certainly help you in keeping the job and even moving up.
    As they say here; in the land of the blind one eye is king ;-)

  10. Dennis and Rembo have been following the argument that Excel and other software applications are tools. This is a very good thing to keep in mind.

    Since I was in college, I’ve been using computers as tools. We used these tools for data acquisition from the laboratory tests we were running, and to help us analyze and understand these results. My objective was not to write a program, it was to figure out what the data was telling me, and sometimes writing a program was a great way to do this.

    Later, as a researcher in the corporate world (which has become an oxymoron), I continued with computers and software as tools. In addition to data acq and analysis, I learned to use computers to automate mundane tasks. I learned to use Solver in analyzing and predicting materials behavior under cyclic loading. I had to run Solver to analyze the loading cycle, then the unloading cycle, then repeat the halves of the cycle until the Solver solutions converged. My first nontrivial VBA procedure was a tool to automate this cyclic Solver analysis. It took over a week to get it to work, but in the end, the manual Solver process, which took 1-2 days for a page of different cases, was reduced to a VBA procedure that took under 5 minutes. I have yet to duplicate that productivity gain.

    Now as a developer, I keep the attitude that Excel, and my programs developed in Excel, are just the tools that a client may use to accomplish a task. It keeps me honest, so although we all know Excel is a flexible and powerful tool, I don’t forget that it’s not always the right one for the job. I also realize that this is how most clients view the programs I produce, and knowing that my programs are tools helps me to design better tools.

  11. Excel is not necessary for advancement in Finance/Accounting. I have worked many years in the field and all my bosses have had only a rudimentary knowledge of Excel and none of VBA. During my time, very few if any “geeks” got to be boss. I consider myself a geek and somehow got up to CFO at several orginazations. Excel/Access/VBA helped me do my job, but honestly, knowing Excel wasn’t a factor in my advancement.

  12. Was knowing how to use an IBM Selectric typewrite a necessary skill back 25 years ago, or was it sufficient to know how to type?

    I’m Darwinian. Universities shouldn’t provide their students any spreadsheets training, but when appropriate some classes should require spreadsheet modeling. Those that can learn on their own won’t have a problem. Those that can’t would be in for a huge shock once they enter the real world and have to work with other systems for which they weren’t trained in school, e.g., most if not all legacy mainframe and mini applications.

    Spreadsheets have become poor tools. Back in the 1980s they were better than most of the alternatives. Formulas could calculate with numbers and manipulate text, and the underlying grid allowed easy creation of simple interfaces. MUCH, MUCH easier than dBase or BASICA programming. That isn’t the case today. There are visual interface development tools that are much better than what spreadsheets provide, and given a library of spreadsheet-like functions, most if not all programming languages would provide better control and easier verification and maintenance.

  13. “…just don’t know any VPs of Finance that use Excel at any advanced level.”

    I got made VP because of my ability to utilise Excel in the securities industry. I’m able to take raw database data from our trading systems and pop it into Excel giving breakdowns on clients, how much they spend with us and our profit levels per client.
    Furthermore, the advanced level of VBA that I do also allows automation of many tasks that the traders perform, giving them more time to watch the market…

    I would estimate that I’ve easily given back around 1-2 hours each day to each trader. Ongoing efforts will ensure more time is available for new financial initatives (which of course will require automation later, ensuring that not only have I got more work, but that the company has a higher monetary return rate per trader as time passes by).

    Don’t sell it short…

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