Microsoft Excel is an incredibly powerful tool for small businesses. In this software, even the simplest functions and formulas can add major value to the way you operate.
For a small retail business, Excel may be all you need to ensure your bookkeeping stays up to date and manage your cash flow. In order to use Excel to its full potential in your business, you need to set up your spreadsheets to ensure they work for you.
How excel can be used in a small retail business.
Not sure about how Excel can assist your business?
Let’s look at the most common uses:
Inventory management.
Inventory is a critical part of any retail business. You need to know how much stock you have of each product you sell and how quickly it’s moving off the shelves. Excel can help you to monitor these numbers, especially if you create your invoices in spreadsheets too.
Invoices.
Speaking of invoices, an Excel spreadsheet makes a great base for an invoice. You can set up a highly professional invoice using one of the many templates available online and ensure your small retail business looks professional.
One of the best parts about using Excel is that all calculations are done for you, meaning you reduce the risk of human error when adding up line items and prices on your invoice. It’s all about setting up the formulas correctly.
Forecasting.
Data visualization is an important element for every business and there are plenty of tools you can use to see where you’re heading. However, Excel can help you do the job too. When you use Excel for both your billing system and your inventory management system, you can pull that data together to start making predictions and forecast where your business is heading.
You’ll be able to see how stock numbers of particular items move throughout the year and other important data, allowing you to ensure you have enough stock when a busy period rolls around. You can also look at areas that you should focus on growing your business based on the data shown.
The 6 formulas you need to use.
The Functions Library in Excel has just under 500 formulas for you to choose from. While every one of these formulas has its place and use, you don’t need to worry about knowing them all.
These are the first 6 that you should learn upfront. Thereafter, you can expand your knowledge as your retail business grows.
=SUM
This is the most basic function on any spreadsheet and is an absolute must for business, especially if you’re using Excel for invoices and billing. SUM will automatically calculate figures for you, removing the risk of human error when adding, subtracting, multiplying, or dividing.
You can input the SUM formula by typing into the target cell =SUM followed by the figures you want to work with or selecting the cells that have values you want to work with.
Just be sure to include the figures or cells in the correct order if you’re doing something more complicated than straight addition or subtraction.
=COUNT and =COUNTA
These two functions are great for helping you work out stock numbers and what potentially needs to be ordered. COUNT will tell you how many numerical values are in a range of cells, and COUNTA will tell you how many cells are occupied in that range of cells, regardless of whether they’re occupied by numbers, letters or error codes.
=AVERAGE
Working out averages is very useful in business if you want to see how much you’re making per sale or per a specific time period. You can use this information to predict busier times in your store or make forecasts about future sales.
The AVERAGE function is a quick way to do the calculation rather than you having to manually create a SUM formula over a range of cells.
=MIN and =MAX
These two functions will give you either the lowest number within the range you select or the highest number, depending on whether you use MIN or MAX. You can use this to find the highest or the lowest sale for the day or the month, for example.
=CONCAT
This is a very useful function if you’re working with lots of data that you need to simplify on your spreadsheet. Using it will bring information from various selected cells into one cell. For example, if you have a contact form that customers complete in your online shop and each answer (name, surname, street number, street, etc.) all falls into different cells, you can use CONCAT to bring them together. With this function, you can combine name and surname into one cell, and the full address into another cell.
=IF
An IF statement is a powerful function for invoicing and billing for any business. You can basically tell Excel that if something is true in one cell, then in the cell with the IF statement, something specific must happen. If it’s not true, then the cell with the IF statement must do something else.
This is great for adding in shipping or a discount on your invoices. For example, you can write in an IF statement that says if someone has ordered 10 units of a specific product, then apply a 5% discount. If the quantity is less than 10, the discount mustn’t get applied.
Make your business life easier with excel.
You don’t always need to opt for expensive accounting software to keep your small retail business running smoothly. In fact, you probably already have everything you need in Microsoft Excel.
It’s possible to do everything from billing to inventory management with this powerful and versatile program. You can use an Excel invoice template to create different types of invoices that feature your business branding and other customizations. You can track income, monitor stock levels and make predictions for the future of your company, all with Excel.
Using this Microsoft software will help you to stay organized, streamline your accounting processes, and grow your business with every sale. The best part is, you probably already know how to use it—you just need the right formulas to take it to the next level.
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