Writing Clearer Excel Formulas: A Simple Approach to Better Spreadsheets

Excel remains one of the most versatile tools in the business world. Its strengths are substantial:

• It provides immediate visualization of complex scenarios

• The tabular format helps organize information in a logical flow

• It's accessible to almost anyone with minimal training

• It's installed on virtually every business computer

• It offers rapid prototyping capabilities for data analysis

However, these strengths come with inherent limitations that aren't always obvious to users:

• The flexibility can lead to inconsistent approaches

• Complex models quickly become difficult to maintain

• Formula logic can become virtually indecipherable

• The lack of enforced structure can create sustainability issues

The Risk of Complexity

I still remember spending months developing an Excel model that only I could understand or maintain. This wasn't productive for my team or organization. What seemed straightforward to me was impenetrable to my colleagues, creating a single point of failure in our workflows.

Almost everyone who has used Excel extensively has created an overly complicated spreadsheet at some point. It's an easy trap to fall into - you start with something simple, add a few more conditions, and soon you're staring at a formula that stretches across the formula bar.

The Case for Simplicity

The best approach is typically to keep Excel models as simple as possible:

• Simple models are easier to maintain

• They can be understood by more team members

• They provide organizational resilience through staff turnover

• They reduce risk and time spent troubleshooting

When Complexity Is Necessary

Despite the advantages of simplicity, complex formulas are sometimes unavoidable. Business requirements often demand sophisticated calculations, multiple conditions, or intricate financial modeling that can't be reduced further.

In these cases, rather than avoiding necessary complexity, we can make it more manageable through better formatting.

A Structured Approach to Formula Writing

After consulting with numerous businesses and reviewing countless spreadsheets, I've found that a simple formatting approach can transform even the most complex formulas into something more understandable.

How to Format Excel Formulas:

• Use Alt+Enter (Windows) or Option+Enter (Mac) to create new lines within your formula

• Indent consistently with each nesting level (4 spaces works well)

• Place each major argument on its own line

• Align closing parentheses to make nesting levels clear

Example: Before and After

Here's a typical nested IF formula as most users would write it:

=IF(MID([@Blend],6,2)="DB","",IF(MID([@Blend],6,2)="RH",MID([@Blend],3,3)&"PR",IF(OR([@Site]="ALWC",[@Site]="WWC"),[@Var]&"WA",MID([@Blend],3,5))))

With proper formatting:

=IF(
     MID([@Blend],6,2)="DB",
     "",
     IF(
          MID([@Blend],6,2)="RH",
          MID([@Blend],3,3)&"PR",
          IF(
               OR([@Site]="ALWC",[@Site]="WWC"),
               [@Var]&"WA",
               MID([@Blend],3,5)
          )
     )
)

The logic is identical, but the visual structure makes it significantly easier to follow, debug, and modify.

Practical Benefits

This formatting approach delivers several tangible benefits:

• Logic errors become more visible

• Formula structure is immediately apparent

• Modifications can be made with greater precision

• Knowledge transfer to team members is smoother

• Long-term maintenance becomes less burdensome

Implementation Considerations

There are a few practical considerations when implementing this approach:

• Initial formula creation takes slightly longer

• Edits require maintaining the formatting

• Very long formulas may benefit from additional documentation

• Consider adding comments in nearby cells for especially complex logic

Conclusion

Excel isn't a database or programming environment, though it's often pressed into service as both. By borrowing this simple formatting practice from the programming world, we can significantly improve the quality and maintainability of our spreadsheets.

This small investment in formula clarity pays dividends in reduced troubleshooting time, easier knowledge transfer, and greater organizational resilience. When complex formulas are unavoidable, proper formatting ensures they remain manageable throughout their lifecycle.

Next time you find yourself writing a formula that wraps across your screen, take a moment to format it clearly. Your colleagues—and your future self—will appreciate the effort.