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Does the thought of bookkeeping fill you with uncontainable excitement? Probably not. What about money in the bank to make your business ambitions a reality? Now we're talking. 

It turns out that boring ol' bookkeeping and business capital have more in common than you might think. You need cash to grow your business, but as you well know, money doesn't grow on trees. You're going to need to secure top-notch financing to get ample capital to invest in your business. 

But before lenders start doling out the big bucks, they're going to want to make sure you're a safe, reliable applicant. They'll look at your credit score, cash flow history, financial projections, business plans, and more. And how do you keep these critical financing factors in tip-top condition? With fundamental bookkeeping habits, of course.

You can't qualify for business financing without the proper financial documentation. And even if you do have your finances neatly organized in a silver 3-ring binder, the numbers need to prove to lenders that you and your business are a worthwhile risk. Fortunately, bookkeeping not only helps document and organize your finances, but it arms you with the information necessary to improve your business's health and qualify for financing. 

Win-win.

There's no need to make bookkeeping more complicated than it needs to be. With just a few basic, routine habits, you can stay on top of your books each month with little-to-no hassle. Follow these bookkeeping best practices, and you'll be well on your way to bigger, better financing for your business.

1. Adopt Cloud Bookkeeping Software

First, it's 2019—ditch the spreadsheets and ledgers and get cloud bookkeeping software. Tech can do practically all of the tedious bookkeeping for you. Okay, not everything, but a bookkeeping platform like Sunrise can automate your invoicing, expense tracking, income categorization, and financial reports. That adds up to a lot of saved time.

Software doesn't replace the need for professional accounting guidance, but it does simplify the minutia of running a business. It'll help you get your finances in order and keep them in order. Plus, by using a cloud-based solution, you'll always have real-time financial data on your business's performance—no need to wait until end-of-week or end-of-month reconciliations.

Make sure your bookkeeping tool also has high-quality document management features. The right tool will streamline the process of managing financial documents like invoices, daily expenses, payables, receivables, and receipts. The software should also allow you to easily share your files with your accountant—no copy/paste or screenshots necessary. Less time bookkeeping means more time focusing on growing your business.

2. Track All of Your Expenses

Before you start paying, tracking, and reporting, you need to separate your personal and business expenses. While it might be convenient to just swipe one piece of plastic in your life, this practice will ultimately make tracking your expenses a nightmare.

Open a separate bank account and get a business credit card. By separating your accounts, you won't have to waste hours sifting through your expenses at the end of the month. You'll always know how much your business has spent and what the money has been used to purchase.

Now that you've separated your accounts, it's time to track all of your expenses. Business lunches, printer ink, travel expenses—everything. There are a ton of small business tax deductions you can capitalize on, and every penny counts.

3. Create Cash Flow Forecasts

This process is where bookkeeping turns from entries to insights. Yes, bookkeeping is a necessary evil for legal purposes, taxes, and audits, but it also informs and drives your business strategy.

With detailed financial records, you'll be better able to forecast your cash flow. With accurate cash flow forecasts, you'll always be prepared to make the best financial decisions for your business. These insights will help you avoid dangerous amounts of debt and leverage your existing capital to its utmost potential. Coming full circle—these informed business decisions will improve your financial health and help you qualify for financing.

4. Pay Your Taxes

Remember when we talked about separating your personal and business expenses? Yeah, tax time is when you really reap the rewards of that upfront decision.

Income tax, payroll tax, unemployment tax, excise tax, sales tax, property tax...that's a lot of taxes. Don't let the fees creep up on you come tax season.

If you've been consistent and organized with your bookkeeping, tax time will be a breeze. If you're using a solution like Sunrise, you can simply invite your accountant to access your transactions and financial reports —they’ll take care of the rest. Easy peasy.

5. Regularly Review Your Financial Records

Financial reports won't do you much good if you never use them. Make it a habit to frequently analyze your statements. Keyword: analyze. Don't just glance at them or give them a quick read—dive into the details. These are the same reports lenders will be looking at to decide if you qualify for financing. You should be looking for the same red and green flags they're trying to discover.

To some degree, you should check your financial records every day. At the end of each day, make sure the money in the bank matches the receipts. By monitoring your transactions daily, you'll be able to catch errors, fraud, and unexpected fees before it's too late.

While it's important to track day-to-day transactions, you also need to review the big picture with month-to-month statements. The profit and loss statement, balance sheet, and cash flow statement are your most important financial reports. These telling financial documents will give you quick and deep insights into your business's health. They're also the first thing lenders and investors will look at when examining your business's potential.

Make sure to block off time in advance to take care of your bookkeeping tasks. You're likely extremely busy, and many things might seem immediately more important than tracking your day-to-day finances. Don't slip into the procrastination trap—set aside time at the end of each day and month to reconcile your books.

6. Remember the Rule of GIGO

Remember: "garbage in, garbage out." GIGO. The reward of your consistent bookkeeping is equal to the quality time and thought you put in every day and month. It's not enough to just go through the motions and check bookkeeping off your to-do list each day. You need to ensure the quality and legitimacy of your entries if you ever want your reports to benefit you.

Come tax time or a surprise audit, your financials won't do you much good if you got sloppy for a month or two here or there. Saving minutes now will cost you hours later (and likely a more substantial fee from your CPA, too).

7. Consider Hiring a Professional

Numbers and entries might not be your thing, and that's okay. As an entrepreneur, you have to wear a lot of hats—fortunately, you can hand off your bookkeeping hat with little hassle.

If you know you don't have the bandwidth or the slightest desire to deal with day-to-day bookkeeping, consider hiring a professional bookkeeper. Bookkeepers can help track your transactions, reconcile your books, explain your financial reports, and answer all your number-related questions.

You can hand the entire bookkeeping process over to a professional and get back to doing what you do best—growing your business.

Excellence Is Not an Act—It's a Habit

At first, you might approach each of these bookkeeping habits as tasks. You may need to add reminders on your phone and calendar to nudge you to get the job done. Some days you may have other pressing obligations, and other days you might simply forget. That's fine and dandy—it's all part of the process.

Over time, however, diligence to these tasks will evolve from act to habit. You'll find the value in bookkeeping and make it a priority—not a burden. That's when you'll achieve true bookkeeping excellence. And that's when your bookkeeping labors will really start to pay off.

Better Books Lead to Better Financing

With your books in order, you're ready to pursue your financing ambitions with confidence. Armed with financial insights, you'll know exactly how much cash you need and how much you can afford.

At a moment's notice, you'll be ready to apply for whatever financing you need. Your awareness of your business finances will help you determine if you even need financing—and if you do, which loan makes the most sense. 

For example, you may discover your cash flow is taking a hit because your clients are dilly-dallying on their payments. If that's the case, you may want to consider accounts receivable financing instead of a short term loan. Or maybe you find that you consistently receive more sales during November, leading you to acquire a business line of credit to hire seasonal help.

Better bookkeeping practices lead to better financing—it's that simple. Once you receive that lofty sum of cash with oh-so reasonable terms, you'll realize all the tracking, reconciliations, and reports were all worth it. Get after it, entrepreneur. Your next loan is just a handful of bookkeeping habits away.

Knowledge is power. Ignorance is weakness.

As an entrepreneur, it's critical to arm yourself with the knowledge necessary to make sound business decisions. Without that knowledge, you'll always be at a substantial disadvantage—as if owning and operating a small business wasn't hard enough already.

There's no better way to learn about your business than through financial reports. These reports tell a story about your business—from the past to the present and to the future. Sometimes it's a sad story of conflict and loss. Other times, it's a Cinderella story of triumph born from struggle. For your business to experience its happily-ever-after, it's critical you learn where your business currently stands and where it's headed.

We know you're busy with owning, operating, and growing your business. It's a lot—we get it. However, effectively running a business is impossible without financial reports. They're an unnegotiable part of managing a successful company.

To help preserve your precious time, we've narrowed down the reports you need to analyze. No matter if your business is big or small, whether you go solo with bookkeeping software or you have an entire accounting team, you need to know these 3 financial reports like the back of your hand. These are the reports you should be creating, reviewing, and taking action on month-to-month to keep your business moving in the right direction.

1. Profit and Loss Statement (P&L)

Ideally, the goal is for your revenue to exceed your expenses (a.k.a. a profit). However, that's not always the case, but you won't know you're incurring losses if you don't frequently generate and check this financial report. If you're profitable month-to-month, then great job. Now look for ways to optimize and grow. If you're incurring losses each month, take a step back and start looking for areas to make changes. You’ll likely be able to find areas for improvement in your cash flow statement (more on that later).

2. Balance Sheet

By comparing balance sheets from month-to-month and year-to-year, you can identify trends and make more informed financial decisions. You'll also be able to monitor the key financial ratios that lenders use to determine your company's health: liquidity and leverage.

3. Cash Flow Statement

One of the best ways to use your cash flow statement is to predict future cash flow. Data-backed estimates will help you budget and make important financial decisions. If your cash flow isn't looking so hot, it may be a sign you need to acquire temporary financing to fill the gaps. Or perhaps you need to cut some of your expenses.

Using These 3 Financial Reports

In the best-case scenario, your reports will verify that your business is operating smoothly and on a healthy growth trajectory. At worst, you'll discover significant weaknesses to act on and improve. Uncovering these vulnerabilities early on will give you time to make strategic business decisions to recoup and recover.

That's why we encourage you to generate and look over these reports every month. If you wait 3–4 months to analyze your financials, you may not be able to dig yourself out of a deep, deep hole.

If you're a small business owner with enough on your plate already, take a load off your shoulders with bookkeeping software. Software like Lendio's can automatically create and deliver these financial reports—meaning fewer spreadsheets and calculators for you. That also means less time crunching numbers and more time doing what you do best—running the business.

You're busy, so don't spend hours drowning in numbers. Stick to these fundamental reports. Armed with the financial knowledge these reports provide, you'll have the know-how and insights necessary to propel your business forward.

Do you want to take your small business to the next level? If so, you need to make every financial investment into your business count. 

Successful business owners combine due diligence, a deep understanding of business processes, and keen foresight to turn a small business into a profitable one. One key financial principle that business owners must understand is ROI. 

What is ROI? 

ROI stands for return on investment. With any investment, whether it is time or money, there is going to be a financial gain, loss, or break-even point. ROI is the analysis of this financial performance in the business world.

Here’s an example: you purchase $500 in stocks today. If you were to sell those stocks tomorrow for $1,500, you would have a gain—a positive return on your investment. If you were to sell those stocks tomorrow for $100, you would have a loss.

Why Does ROI Matter? 

Having the foresight to determine if an investment will result in a positive return allows you to make financial decisions that will ultimately help you successfully grow your business. 

ROI is especially important when it comes to business financing. If you’re borrowing money, you want to make sure the growth opportunity will generate enough revenue to justify the cost of the loan. Otherwise, you could find yourself drowning in debt. 

Calculating ROI can also come in handy if you’re trying to determine which investment makes the most sense for your bottom line. Here are some examples of how you might put an injection of capital to use: 

• Replacing outdated equipment or machinery
• Redesigning your website to take your brick-and-mortar shop online 
• Hiring a marketing manager to kickstart new marketing and advertising initiatives
• Opening a second location on the opposite side of town
• Diversifying your product line and services to sell more to existing customers and attract new customers 
• Franchising your small business to expand it nationally—or even globally
• Consolidating several forms of high-interest business debt under a new loan 

The investment path you choose depends on many factors. It depends on where your business stands now and what it has to offer. It depends on the market and future trends. It depends on how far you want your business to grow. And it depends on you, your team, and your combined strengths and weaknesses.

With all of these factors in mind, you will need to decide which of the above paths is most likely to create a positive ROI. 

How to Calculate ROI 

Calculating ROI can be a bit tricky if you start overthinking it. InvestingAnswers offers a simple ROI formula that small businesses can use to determine the return on investment for most ventures.

ROI = (Net Profit ÷ Cost of Initial Investment) x 100

Here are a couple of examples of this formula in action based on a few of the small business expansion ideas mentioned earlier. Please note that these are just examples of the ROI formula in use and not typical results of the specified investments.  

Scenario #1

Your business invests in a complete redesign of your website. The total cost of investment is $15,000, which includes a custom e-commerce website design and quality photos of your entire product line. 

After the first month, your new e-commerce store generates a net profit of $3,000. This net profit is calculated after deducting monthly website hosting fees, product shipping and handling costs, and additional costs associated with your new e-commerce store.

The ROI of your website redesign, for the first month alone, is ($3,000 ÷  $15,000) x 100 = 20%. 

Scenario #2 

Your business invests in a new marketing manager. The total cost of investment is $52,000 for the first year based on the new hire's salary, benefits, and initial training. 

After the first year, new marketing initiatives generate a net profit of $120,000. This net profit is calculated after deducting advertising fees, monthly marketing software fees, and additional marketing spend.

The ROI of your marketing manager for the first year is ($120,000 ÷  $52,000) x 100 = 231%. 

Scenario #3

Your business invests in opening a second location. The total cost of investment is $225,000, which includes permits, POS equipment, inventory, payroll, and the retail space itself. 

After the first year, the net profit for your new boutique is $85,000. This net profit is calculated after deducting standard operating costs and taxes. 

The ROI of your second location for the first year is ($85,000 ÷ $225,000) x 100 = 38%. 

What is a Good ROI?

For most scenarios, any positive return is considered a good return on investment. If you want your business to have exponential growth, you will want to aim for the highest ROI possible. 

You’ll want to increase your sales without increasing your spend. You can employ several tactics alongside major investments and business expansions to increase your overall revenue. 

Focus on providing excellent customer service and remind all of your customers to review your business online. Your business rankings in search engines will steadily improve as it receives a larger quantity of positive rankings, leading to exposure among your ideal customers. Also, be sure to respond to your reviews, as that can help improve your local rankings, according to Google.  

Train all of your employees to upsell. If you can increase the average dollar amount of each sale, you will increase your business's overall revenue without having to increase marketing or advertising spend to attract new customers to your store. 

For small businesses with online stores, look for ways to improve online conversions. Place opt-in forms on every page of your website for visitors to share their email address to receive future sales promotions. Utilize A/B testing tools, like the one provided by Google Analytics, to test your product sales pages and determine which changes result in the highest conversion rates. 

Once you understand ROI, you’ll be able to make informed financial decisions for your small business that will lead to its success. After thorough research and some careful calculations, you may find that the path that seems riskiest may have the potential to generate the highest return on investment. And that will be the best scenario for taking your business to the next level. 

Yes, credit card interest is deductible for businesses. But with recent changes, how much you can deduct has changed.

Is business credit card interest deductible for small businesses?

Credit cards are a great tool that many businesses use to keep themselves running. If you don’t pay your balances in full at the end of each billing cycle, you’ll probably end up paying some interest.

The long answer to whether or not you can deduct credit card interest on your taxes depends on the situation. Let's take a quick look at when you can write off your business credit card interest:

• Most (if not all) business-related credit card interest. Interest you pay on business credit cards is deductible when used for business-related expenses. The interest deduction also applies when the debt is directly related to your business operations, even if it's a cash advance. As long as it went toward operating your business, you can write it off.
• Different forms of interest within the paid year. You can only deduct qualified interest during the year in which you incurred the debt or made the payments.
• Your business credit card's annual fee. Some business credit cards come with an annual fee. If you have one of these credit cards, then you can write off the annual fee on your taxes.

Remember to keep your credit card statements and receipts to smooth the process of filing your small business tax returns. The IRS provides a host of resources to help you understand this process better, but in some cases, it may be a good idea to hire a qualified professional to do your taxes.

When is your business credit card interest not tax deductible?

One reason to opt for a business credit card rather than using a personal credit card for your business is that interest on a personal credit card isn’t usually tax deductible. Unless you can separate expenses from personal ones on your personal credit card, it can be hard to write off the interest.

Additionally, how much interest you can deduct has changed with the Tax Cuts and Jobs Act. When you file your taxes, businesses can only deduct up to 30% of their interest payments.

How to make claiming credit card interest easier.

Claiming credit card interest on your taxes might sound difficult. Here are some steps to make it easier for you:

• Don’t use a personal credit card for business purposes. Maintain separate credit card accounts for easy accounting.
• See if you can find an automatic way of tracking your credit card expenses and the interest that you pay on them.
• Hire a professional accountant or tax lawyer who will evaluate your specific business situation and give you a clear picture of how you can take full advantage of your small business tax deductions.

Small business tax deductions can add up to a significant amount of money back in your pocket each year. Remember that hiring a professional can help you maximize your tax return so that you can continue investing in your business.

It’s a new year, and you know what that means: it’s a great time to consider planning for financial success in 2019.

You probably don’t relish thinking about tax time, but this year’s tax season could be a game changer for your business, bringing with it some new opportunities to save money. Significant alterations to Section 179 were made in the Tax Cuts and Jobs Act (TCJA) of 2017 that can lead to improved cash flow, and that means more funds available for your company.

There's good news in the bonus depreciation allowance, too, with an increased depreciation rate that can be claimed sooner. Both these measures allow you to deduct the assets you need for business activities more quickly and for higher amounts than you could before.

It’s always a good idea to review your options thoroughly before you file taxes. You could find new opportunities for the growth of your business in the fine print. Here’s what you should know about Section 179.

Section 179

Section 179 was first established in 1958, with the intention of stimulating small business investment in goods that benefit the business, simplifying accounting, and reducing the tax burden.

In order to qualify for the deduction, you must use the goods for business for a minimum of 50 percent of the time. The cost of the goods can be deducted in the tax year the goods were “placed in service”—that is, ready to be used in the business.

Under TCJA, the list of assets that are eligible for Section 179 deductions has been expanded and the maximum deduction has been increased, along with the spending threshold.

You might find differences between your local authority and the IRS when it comes to definitions of tangible personal property and real property. Remember that qualifying property for the Section 179 deduction is defined by the IRS and not controlled by local law.

The IRS provides a complete list of qualifying property in Publication 946.

Tangible Personal Property

Tangible personal property is defined by the IRS as tangible property that is not real property. Examples of tangible personal property include fixtures inside or attached to a building, such as refrigerators, office equipment, printing presses, testing equipment, and signs. Numerous improvements to the interior, roofs, heating, security, and fire protection are also acceptable Section 179 expenses.

Machinery and equipment used for manufacturing, production, or extraction, or to provide transportation, communications, electricity, gas, water, or sewage disposal services are considered tangible personal property. Research facilities needed for business activities qualify for the Section 179 deduction, and air conditioners and heaters put into service after the tax year 2015 are also eligible.

Livestock qualifies for Section 179, as well as single-purpose structures for livestock and horticulture. Facilities used in relation to distributing petroleum or primary products of petroleum are also allowed.

Another potential deduction is off-the-shelf computer software purchased and put in service from 2003 and forward

Real Property

Certain property placed into service in the tax year can be treated as Section 179 property. Qualified real property includes certain leasehold improvement property, qualified restaurant property, and qualified retail property.

Generally, the property must be non-residential and meet requirements set out in the Internal Revenue Code. The IRS provides detailed information in "Special rules for qualified section 179 real property" in Publication 946.

Section 179 Limits

Section 179 is subject to two limits: an investment limitation and an income limitation.

Investment Limitation

You can deduct up to $1 million of qualified expenses per year, purchased and placed in service for your business in 2018 and following tax years. A dollar-for-dollar phaseout begins when expenses for the year exceed $2.5 million to a limit of $3,500,000—Section 179 deductions stop at that threshold amount. Both amounts are indexed to inflation.

Investment limitation amounts cannot be carried forward for future tax years.

Income Limitation

Section 179 deductions are not allowed to exceed the taxable income of the business, including wages and salaries. The limitation is calculated after the investment limitation. For example, if the taxable income of your business is $50,000, and qualified expenses total $75,000, Section 179 deductions are limited to $50,000.

Allowances that can't be used because of the income limitation can be carried forward indefinitely.

Bonus Depreciation Allowance

When you have exceeded the limits for Section 179, you're able to recover capital expenses for your business over a longer period and at a slower rate, by claiming depreciation deductions under Section 168(k), referred to as bonus depreciation. A few changes have been made to this allowance, too.

The Bonus Depreciation Allowance (BDA) applies to used qualified property now, as well as new acquisitions. The depreciation limitation has also been accelerated in the TCJA to temporarily allow you to deduct 100 percent of such purchases for the same year.

The cost of goods placed into service from September 28, 2017, through to the end of 2022 is eligible. Starting in 2023, the percentage for depreciation is scheduled to decrease in increments, down to zero percent by 2027 and after.

Though both Section 179 and bonus depreciation are available in the same tax year, claims must be filed in the right order. Claim Section 179 allowances first; then you may proceed to claim bonus depreciation for the amount that remains.

By accessing deductions under Section 179 and the bonus depreciation allowance, you could potentially deduct nearly all the expenses incurred for qualified acquisitions for the tax year—as long as the deductions are claimed appropriately.

Start the Year Right

Beyond researching Section 179, there’s a lot you can do at the beginning of the year to set yourself and your business up for financial success. Stay on top of all the changes to the tax laws, key tax dates, and other essential financial tasks with this Q1 financial planning checklist.

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This guest article was contributed by Irene Malatesta of Fundbox. Fundbox and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Advertiser Disclosure: Lendio receives compensation for the credit card offers. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Lendio does not include all card companies or all card offers available in the marketplace.

This editorial is from the viewpoint of Lendio, and not endorsed by any 3rd party. The information is accurate at the time of publication. 

*All information included in this article was current on its publication date (June 26, 2018) and is subject to change.

We’ve all been caught in an unexpected spring rain storm. Maybe you thought the worst had passed and you dashed out the door only to be hit by another sudden downpour. For small business owners, those rainy days can happen at any point during the year. That’s why it’s critical to be prepared with a rainy day fund for your business.

While rainy days in business do come in the shape of literal storms causing damage to your property or equipment, for most small business owners, unforeseen expenses pop up rain or shine. Like a trusty umbrella or a shelter from the storm, things like an emergency savings account, a line of credit, or a business credit card are critical for helping your business weather unexpected storms.

Keep your business afloat with an emergency savings account

Most small business owners don’t even think about having a savings account because their budget is so tight. That’s exactly why you should be building savings into your budget. If you treat savings like a monthly expense, you can slowly build a reserve that can help your business stay afloat in an emergency. An account like this can also help your business in the long haul if an opportunity strikes to launch a new product line, expand, buy out a competitor, or purchase some extra inventory at a good price.

How much should you keep in your business emergency savings account? According to SCORE small business advisors, “historical spending patterns are a good starting point in considering future spending plans.” Most experts say six months of operating expenses is ideal for an emergency fund.

Put your mind at ease with a business line of credit

A business line of credit is like keeping an umbrella by your front door in case of unexpected rain. You may not always need it, but knowing it’s there gives you a sense of security. A line of credit gives you capital to draw upon to meet a variety of business needs.

The great thing about a business line of credit is the funds are always there, but you don’t have to use them until you really need them. You only have to pay interest on what you use, and as you pay the line down, you also eliminate the interest charged.

Use a business credit card when you get caught in a downpour

Emergency savings funds and lines of credit are useful and can put your mind at ease, but sometimes, your unexpected business expenses require a more instant source of funding. Having a business credit card or two is a not only a great option for businesses that don’t qualify for traditional small business financing, it’s useful for every business owner to have this type of quick, easy access to working capital.

Another great feature of a business credit card is the ability to earn points you can funnel back into your business. Particularly handy for rainy day emergencies, these points can be saved up and redeemed when they’re needed most. For example, with the The Blue Business® Plus Credit Card from American Express, you can earn 2x the points in select business categories, which you can translate into cash toward business travel expenses, including those last-minute business trips that may pop up.

Rainy days will come—in both business and life. Having emergency funds in place will help you weather the storms, and most importantly, put your mind at ease so you can focus on building your dream business.

This editorial is from the viewpoint of Lendio, and not endorsed by any 3rd party. The information is accurate at the time of publication.

When you are preparing to work in accounting, you need to know how to make accounting work for the people around you. Much of your time is spent managing the ledger and preparing reports. However, you cannot do any of this if you are not aware of how to make the reports make sense.

When you are manipulating data in your reports, you are removing columns or rows that will help you get down to the bottom line. If you do not get down to the bottom line, people are going to get confused or bored.

You also need to make sure that you are aware of how to work with other financial institutions. You are the person who is required to work with the IRS at tax time, and you are the person who submits payments for payroll tax during the year. You need to have the people skills to manage these accounts while also creating an environment where people in the office understand what is going on.

Records are at the heart of any good business, particularly its accounting and finance records. Excel is an important tool that can help finance and accounting professionals create reports, analyze data, and prepare financial strategies. Although you may have a basic knowledge of Excel, you might not know about specialized functions that can make your job easier.

Making the Spreadsheets Accessible: General and Number Formatting

Custom formatting is key if you want other people to understand the model you've spent so much time creating.  So it is important to pay attention to presentation. For example, color coding can be tremendously useful. Designate colors for each field. Use blue for hardcoded inputs, black for calculated fields, and red or green for assumptions. Make sure you use a consistent style for numbers. Use custom formatting to turn 1000000 into $1 million (1e6) to make the report more easily readable and effective.

Pulling the Numbers All Together: VLOOKUP and HLOOKUP

VLOOKUP allows you to easily find data. For example, you might want to find all entries containing a particular product to put together a financial model or to prepare a financial report. VLOOKUP allows you to find this information (even if it's contained in multiple spreadsheets) if that item has a unique identifier, such as an item code number. HLOOKUP provides a horizontal lookup function across table entries. Both are important and provide accounting and finance professionals with an overview of the financial picture.

Data Manipulation and Navigation

Data manipulation is key to presenting financial reports of models. When you use data manipulation, you can insert or delete rows or columns and hide and unhide data, which gives you the ability to simplify reports and cut to the bottom line. It is also important to learn the shortcuts that provide accessible path for navigating the pages of the report. Data manipulation and navigation are tools that help both accounting personnel and management access information.

While some pundits say that thinking and planning is the most important aspect of success, there are some necessary basic Excel skills that will help you create accessible, clear, concise reports. Master general and number formatting, understand lookup functions such as VLOOKUP, and learn the ropes of data manipulation and navigation.