A spreadsheet on paper is a table of rows and columns generally used in accounting. An electronic spreadsheet, like Microsoft Excel, is a table of rows and columns that can contain data items or formulas, and is stored as a computer document. The data items can be numbers, words, paragraphs, dates, money values and number formulas among other things. The power of an electronic spreadsheet is its ability to calculate, manipulate and display data based on entries in the table.

Without having a specialized computer accounting package, knowing how to use a spreadsheet is very important for managing your business. Being able to set up and understand a spreadsheet will help in predicting likely financial outcomes. You may be able to better forecast possible increases or decreases in your expenses or income, based on what you know now. But a spreadsheet is also used for the general analysis of data, including scientific results from experiments, statistical analysis, and of course, analyzing various financial models.

Electronic Spreadsheets Give Insight into Business Financials

Say you have a seasonal business and know that you do well during the summer and the winter holidays and nose-dive in January through March. You can use a spreadsheet to help you budget during the fat times to have some cash padding during the lean times. You can also look years into the future and get an idea of how small changes may affect your overall financial picture.

Even someone that will not be using a spreadsheet for business can use one for estimating costs at home.

Spreadsheets are Handy for Home DIY Projects Too

Perhaps you are considering a DIY project like building a shed. You may have a gut feeling that a 15 foot by 15 foot shed will cost more in lumber and nails than a 12 foot by 12 foot shed, right? Well, setting up information on the size of the shed and the costs of nails and boards, in your spreadsheet, will better help you estimate the overall cost of your project. This could mean the difference between completing your project or running out of money when the project is almost finished.

These examples just scratch the surface when it comes to why someone should learn how to use a spreadsheet such as Microsoft Excel. MS Excel is the most widely used electronic spreadsheet ever, and is an incredibly power tool. Those who can quickly set up spreadsheets using Excel, have a huge advantage in so many ways.