Many data processing organizations worldwide use Microsoft Excel to offer data processing services. This spreadsheet helps us in excel data processing and managing money with its unique features. Some of the essential functions that MS excel can support include budgeting, organizing, analyzing, etc. If you are passionate about building a career in the financial services industry, money management is a skill you should develop.

Read this blog to get a fair idea of how MS excel can help you manage money.

1. Excel Data Processing Helps You Perform Basic Calculations 

Finance and accounting professionals are one group of people who will have to perform various calculations regularly for money management. Copy and paste the required data on an excel sheet, and you can easily find the sum of even a large set of numbers. You can also perform other basic mathematical operations like subtraction, multiplication, and division on a given set of numbers.

2. It Helps You Monitor Your Income And Expenses And Stick To Your Budget

It is customary for every organization or individual to set a budget and make all the possible efforts to stick to it. Setting a budget and monitoring our income and expenses to see if we stick to it is an excellent way to know if we are overspending.

Microsoft Excel is a beautiful tool that can help us keep track of essential details like monthly income and expenses. Then, whenever you notice spending more than planned, you can check for areas where you can cut down your costs.

3. It Helps You Summarise Relevant Data For A Better Understanding

Agencies providing data processing services will use various methods to make the data useful. For example, data processing can help you classify the available data into multiple categories. Then, when presented in the form of, say, percentages or graphs, this classified data will make it easy for you to understand various details. This will help us utilize this information to make decisions or wherever required.

Thus, Excel can help you manage money and perform well at work. This basic knowledge will help you quickly learn the critical excel functions and build an image as a team player once you start working. It will also give you an idea of how you can perform some of the primary activities which you can do independently despite availing of expert data processing services.

In the present world scenario, data processing has become extremely important for many professionals. One of the leading professionals who have benefited from data processing, particularly excel data processing, is finance professionals. This blog will brief you on some of the critical excel functions helpful in solving financial problems. An important point to remember during excel data processing is that we can use some functions independently and other functions as a combination.

1. Effect

This function helps finance professionals calculate the actual annual interest rate in case of non-annual compounding. Professionals handling lending and borrowing-related activities are those who mainly use this function.

2. XIRR

The XIRR function helps us to ascertain the internal rate of return for a group of cash flows on specified dates. This function is very important for finance professionals.

3. MIRR

In this function, IRR undergoes modification. Calculated using the formula MIRR (cash flows, cost of borrowing, reinvestment rate), ‘M’ denotes modified. You can use this formula if you wish to invest the returns from one investment in another. One of the simplest examples from daily life to understand this concept is investing the returns from a privately run business in a government bond.

4. PMT

Finance professionals who do financial modeling for real estate firms will know more about this formula. Once you have the interest rate, the number of years/ months or any other period, and the amount borrowed sum, say, mortgage, you can calculate the value of the mortgage payment.

5. IPMT

Using the formula (rate, current period #, total # of periods, present value), this function helps us ascertain the interest of a fixed amount of debt. This function works perfectly well with PMT. Separating interest payments for every period will give you the principal amount you must pay every time.

6. DB

This is another crucial excel function used by finance professionals. It helps us calculate the depreciation expense of every period. Analysts involved in financial modeling generally come up with depreciation schedules independently.

Do you feel like learning more? These days, we can see a lot of books and videos that will help anyone know more about excel data processing. Make sure you utilize those resources to the maximum to become an expert in the data processing. So, which of the above functions do you think will be most helpful for you at work?