36 golden Excel principles

Principles in a nutshell
#1 Keep your formatting consistent 1
#2 Choose a uniform architecture 2
#3 Don't be afraid to remodel 3
#4 Consider the worksheet order 5
#5 Don't be afraid to add another worksheet 6
#6 Keep your timeline consistent 7
#7 Separate input, output, and calculations 8
#8 Use consistent labels 9
#9 Keep formulas readable 10
#10 Avoid duplication 11
#11 Avoid hard coded numbers in formulas 12
#12 Do not merge cells 13

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#13 Protect, don't hide 14
#14 Build in automated checks 15
#15 Save styling for the end 16
#16 Follow company rules 17
#17 Keep conditional formatting simple 18
#18 Don't ignore new possibilities 19
#19 Clearly indicate negative numbers 20
#20 Use Power Query 21
#21 Clearly label units 22
#22 Document your work 23
#23 Avoid VBA 24
#24 Use simple ranges 25
#25 Delete what you don't need 26
#26 Mind your version management 27
#27 Properly finalize your model 28

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#28 Don't take shortcuts 29
#29 Garbage in, garbage out 30
#30 Every model needs a second opinion 31
#31 Don't use Excel for everything 32
#32 Don't reference Pivot Tables 33
#33 Retire old models 34
#34 Use consistent names 35
#35 Use external sources sparingly 36
#36 Even you make mistakes 37

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#1 Keep your formatting
consistent
Consistent formatting makes a spreadsheet easier to follow. The importance of
uniformity is proportional to the complexity of the model. A well-formatted
model is good for maintainability, especially for other users. Being consistent
means that colour, fonts and row- and column formats are used predictably
throughout your model.

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#2 Choose a uniform architecture
Spreadsheets can last for many years. That's why it's critical to
choose an architecture that suits all the functional
requirements. Architecture concerns the choices made with regards to the
modelling of your Excel file. For example, an architectural decision is to always
have a separate input worksheet for
database imports, or to consistently have an
ID-column to the left of your data.

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#3 Don't be afraid to remodel
Form follows function. If the function of a model changes, so
must its form. Don't turn your spreadsheet into a ‘hack’: if new
requirements call for a change in the calculation model, don't hesitate to apply
those changes. Only by keeping your model up to date do you keep it from
turning into a convoluted mess.

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#4 Consider the worksheet order
Large models often come with many worksheets. Take note of
the order in which you place them in Excel. Do you work from
left to right? From result to source or from input to conclusion? Every
spreadsheet calls for a different approach, but in every case a consistent,
predictable worksheet order makes a model nicer to work with.

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#5 Don't be afraid to add
another worksheet
A common misconception is that more worksheets make a spreadsheet more
complicated. In fact, usually the opposite is true. Worksheets that try to do too
many things, like include multiple tables, tend to be the most error-prone.
Excel used to be limited in the number of worksheets it accepts, but that was
in the distant past. Although additional worksheets can make a spreadsheet
look more complicated from a
schematic perspective, in practical
terms it actually makes the model
easier to use.

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#6 Keep your timeline consistent
By way of exception, in Excel you are allowed to compare
apples and oranges. After all, both are fruit. What you should
not do is to include quantities of a different unit. So a list with apples and
oranges should not contain an item labelled ‘fruit’ (except as a sum perhaps),
and a list of days should not be mixed with week or month records.
Ideally, introduce a separate table for every unique unit.

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#7 Separate input, output,
and calculations
Excel doesn't make it immediately obvious which cells contain formula results
and which are entered values. It's important to keep them well separated;
ideally in separate worksheets, or else through
clear formatting. This way you avoid accidentally
overwriting calculations with new input data.
When mixing in- and output is inevitable, take
extra care to give them a distinctive look.

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#8 Use consistent labels
Whether used to provide clarity to the next user, to remind
yourself, or for the creation of tables and charts, clear labels are
incredibly important. Therefore, use good labels: Titles, row & column headers,
named ranges, and clear worksheet names.

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#9 Keep formulas readable
It sometimes seems like a competition of who can write the
longest formula. However, much more challenging is to design
a calculation model that is easy to understand for other people. It's a case of
finding a balance between compactness and readability. Break up a formula
too much and it becomes hard to follow. Keep it too long and people lose
track trying to decipher it. Tip: use clear labels for intermediate columns. Also
place repeating calculations in their
own column and refer back to
those where needed.

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#10 Avoid duplication
Don't calculate the same thing twice. It's unnecessary.
Much better to perform the calculation once and refer
back to it in subsequent cells. It doesn't just help improve performance, it also
saves you from forgetting to update all cases when a change is required. Using
a formula result a lot? Turn it into a defined name!

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#11 Avoid hard coded numbers
in formulas
With fixed (also 'hard coded') numbers in formulas, you will lose the plot in no
time. These numbers are pretty much impossible to check because you have
no references in your formulas. When a number is used often (like VAT) you will
almost definitely change it in some formulas and forget to change it in others
when it's hard coded. It's much better to group and name values in one place
and then refer to them. Frequently used constants should be given a defined
name.

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#12 Do not merge cells
It's tempting, for the formatting, to merge a couple of
cells into one big one, but merged cells generally cause
more problems than they solve. When you try to reference a merged cell, and
you don't reference the top left space,
it simply doesn't work. Merged cells
also make sorting, filtering, copying,
and pasting a nightmare. If you really
want to line out a label with several
columns or rows, use the "center
along selection" option. Then the
merging is only done visually.

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#13 Protect, don't hide
Don't worry! It's ok to hide worksheets which don't need
to be looked at by the user, but never hide cells, rows,
and columns! Even the sneaky way (by making the text color white). Hiding
information is just asking for problems, information gets
forgotten, and things can be changed
unintentionally. It's much better to just
protect formulas.

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#14 Build in automated checks
Excel is the kind of numbers, use that to your
advantage! For example, add-up subtotals and compare
that result to the total, makes sure those two numbers are equal. With bigger
models we even suggest a seperate worksheet called a "control sheet." Use
smart formulas there that check if a model is, for example, balancing properly.
This one you can see in one glance if something is going wrong.

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#15 Save styling for the end
Make sure you're not wasting time on formatting that
may need to change when the model is done. Format
just once by only adjusting the formatting of tables, lines between groups of
cells, and even titles only after you have all the data you need.

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#16 Follow company rules
If you discuss standards with your colleagues on how
you will deal with formulas, formatting, and structure,
then your models become much easier to understand, maintain, and transfer.
Especially in larger companies it's important to set standards for what an Excel
model should look like, and have these recorded and shared with Excel users.

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#17 Keep conditional
formatting simple
Conditional formats are meant to make a spreadsheet easier to read, but they
can quickly become a mess. If you have too many rules you start to get
conflicting ones, you get ones that were copied accidentally, and it can slow
down your spreadsheet when every cell is
trying to calculate which formatting it
should take. So, use conditional formats,
but use them sparingly.

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#18 Don't ignore new possibilities
Let's face it, people are creatures of habit. We are quick
to do what we know, and slow to learn. Sadly many
Excel users use outdated methods and formulas when newer, faster, better
solutions exist. Excel is constantly developing, our habits must do the same.

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#19 Clearly indicate
negative numbers
Take the revenue, subtract the costs, what could possibly go wrong? Well if, as
in many cases, the costs are saved as negative, then by subtracting them you
will actually be performing an addition. When a number is under
0 you're asking for problems. That's why we advise you to
make negative numbers very clear, for example, you can
make them red.

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#20 Use Power Query
If you are gathering data external to your model, like
from another workbook or csv file, then use Power
Query. With this feature you can clean up the data before you start working
with it, and in many cases Power Query will simply work faster and better than
the older features many still use in Excel.

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#21 Clearly label units
You were taught to do this at school, clearly label units!
Sadly it still goes wrong pretty often. Kg's that are
understood as lb's, hours calculated as minutes. Use number formats, label
your columns, or use comments/
helper cells to make it clear what
a number represents.

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#22 Document your work
On average, each spreadsheet is used by 13 people. It's
important to verbally discuss your work with your
colleagues, but nothing goes above clear documentation. This is not just
about how your model works, but should also
discuss things like version management. Do you
have a log sheet in the model where you track the
changes that each user has made? Think about not
just finding an old version, but actually
understanding what others are doing and why
certain things have been changed in the model.

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#23 Avoid VBA
VBA is found at the heart of many Excel issues. Excel is
easy to use, while VBA is much less intuitive. Even in the
hands of the best Excel users VBA can be hit or miss. Data gets thrown away
accidentally when saving, formulas suddenly stop working, and needed
references have vanished, and the error
messages are hard to decipher. Recorded
macros are easily the worst. These are
very difficult to edit and are often bound
to their original context, therefore
inflexible. A lot of the new Excel functions
replace what was once done in VBA,
avoid VBA whenever possible!

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#24 Use simple ranges
You would be surprised at some of the possibilities in
Excel. For example, if you separate two ranges with a
space, the overlapping cell range will be taken. Or think of a multi-sheet
reference, in which you use 1 reference to get data from several different
worksheets. It sounds really nice,
but it's very easy to mess it up, and
it relies on the current structure of
the model. That's why we advise
simple references whenever
possible.

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#25 Delete what you don't need
Just because a spreadsheet is big and complex, doesn't
actually mean it does very much. It happens way too
often that old parts of a spreadsheet just keep existing without any real
purpose because no one exactly knows
why it's there. This is where external
software can help a lot. If you want to
keep a model usable and readable, you
must remove unnecessary parts.

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#26 Mind your version
management
A colleague sends you a new version of a spreadsheet, in the cloud there are 2
different spreadsheets with the same name and you had also personally made
some edits in one of the versions locally. What's the newest version? How do
your merge the spreadsheets?
Version management isn't difficult
if you have clear aggreements
about naming and saving. Be
consistent in this, because when it
goes wrong it will be very difficult
to find the best version without
external software.
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#27 Properly finalize your model
The finishing touches make all the difference. In Excel
this isn't just visual, proper protection of formulas and
sheets is important as well. Testdata and helper formulas need to be removed,
and correctly labeling and formatting cells
and worksheets will encourage users to use
the model properly.

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#28 Don't take shortcuts
We've all said it before, "after the meeting
tomorrow, I'll finish up the model, but it
works for now." In reality this never really happens. The next
time you need that spreadsheet you'll be confronted with a
situational, temporary solution that hasn't been properly
finished as a model.

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#29 Garbage in, garbage out
As great as Excel is,
it's still true that if
you put garbage into your spreadsheet,
you're going to get garbage results. That's
we advise you to first properly control,
clean, and format your data before working
on the rest of the model.

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#30 Every model needs
a second opinion
Building a model on your own is usually fine, although it can cost a lot of time,
but you should, at the very least, have someone else look over the model
when it's done. Someone else will always see things just a bit differently. The
longer you spend building a model, the harder it is to spot your own mistakes.
In an ideal situation pick a few different testers for your model.

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#31 Don't use Excel for everything
Excel is awesome, and the best userd tend to be a bit
addicted to it. Be careful, Excel is usually a great solution,
but not always. Things like surveys should be hosted somewhere else and
then you can handle the results in Excel. Always consciously make the decision
to use software for the task it is best
suited for.

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#32 Don't reference Pivot Tables
Pivot tables are a poweful reporting tool, and look great
in a dashboard or report sheet. On the other hand, you
shouldn't use them as a calculation tool. Don't reference a Pivot table because
if data shifts the Pivot table won't recognize
the change in cell location, and will present
incorrect or incomplete results.

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#33 Retire old models
It might not feel like it, but even Excel files grow old.
Over the years old models will collect little bits and
unneeded pieces from older versions of Excel. At a certain point it is simply
better to rebuild the model from scratch to ensure your model runs optimally.

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#34 Use consistent names
Grab every opportunity to keep your model transparent,
since it greatly reduces the potential for mistakes.
Carefully consider how to name worksheets, row- and column headings, and
defined names.

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#35 Use external sources
sparingly
It's a dilemma. One the one hand you want data to come into
your model just right and automatically. On the other hand
you don’t want to lose overview of which external sources
are being used from predefined locations which could
result in issues when using the file somewhere else.
Either way the concept remains true: properly organize
your external sources. Clearly mark any areas you are using
external data, and don’t do this more than necessary. More
than 2 external sources is already risky. This doesn’t apply to
the proper use and application of Power Query, in that case
you can be a bit more flexible.
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#36 Even you make mistakes
You would assume people with more experience should
make less mistakes in Excel. We wish! Research has
shown that making mistakes in Excel is a constant. The rule is: The better we
get, the more things we try, and as complexity increases, we make more
mistakes. So, do not only trust your own abilities. Build in automatic controls,
control your work with external software, and have your colleagues double
check your work!

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