Did you hear that one about the accountant...?

Why is it that poor old accountants are the butt of so many bad jokes? They get so much flack for doing such a thankless task. My personal favourite accountant joke....What does an accountant use for contraception? His personality.

Now, now, before I get loads of complaints, I'm an accountant too...and if we can't laugh at ourselves, 'tis a sad life. And why I am bringing out the  bad accountant jokes? Because I am about to head into serious accounting territory, so wanted to get you all loosened up first!

Ok, this is not as serious as having to re-do your tax returns, but I have been asked a specific accounting type question, so will answer it with an accounting based solution. However, please note that while I have recreated a P&L and Trial Balance, you will note that they are a "little" basic and only cover sales and cost of sales. This is because it still conveys the answer required, and doesn't take up heaps of space.

So, the question I was asked was....how do you create a rolling P&L, with each months' figures next to each other, without having to manually key in the figures from separate spreadsheets? I'll show you my solution, and there lots of ways of doing this, but this is the one I like for simplicity:

Lets assume you download a Trial Balance each month and save it somewhere. Lets also assume that your Trial Balance is governed by account numbers. So it looks something like this:

(Before all the accountants start yelling that a Trial Balance should net to zero, like I said, this is fictional and incomplete!)

You also want to have a P&L that looks something like this:

Please note the column headings - they jump from D to O because I have hidden the other columns, which contain March to December, until needed.

So, instead of having to type in each month's figures, or set up a fresh lookup formula and copy it all the way down, you can set this all up using an INDIRECT formula embedded in a VLOOKUP. I briefly touched on this in a prior blog, but I will take you through it step by step now.

First thing is in the set up. Obviously you want to set up your P&L to look just right the first time round. So do it, but only do all the formulas etc for the first month. Once you have it perfected, drag all the formulas across the rest of the columns.

Second thing is, it is better if you paste each month's trial balance into a new sheet within the workbook. This is because an INDIRECT formula will bring back an #REF! error if the workbook it is looking up to is closed.

Right, I have pasted my Trial Balances into my workbook for January and February, and my tabs look like so:

To keep this as simple as possible, I have just shown one formula (for Sales for Widget A) and some of the other more basic formulae:

Now, the step by step walk through (its not nearly as scary as it looks):

IFERROR - this formula is saying "if the results of the following formula comeback as an error, then return 0 instead". That is what the 0 at the end of each line is for. This will also make sure your YTD total doesn't show errors when you drag the formula across for future months.

VLOOKUP - this is your basic VLOOKUP formula as discussed in prior blogs (click here for a refresher). The first brings back your Debit totals, and the second brings back your Credit totals, and these are added together for a total for each account number. This example is based on account numbers, but you can use anything as long as each line is unique. So descriptions are fine too, just make sure the spelling is identical in both sheets.

INDIRECT - instead of  having to set up the formulas each month once you have your TB file, you simply point your lookup to the month name in row 3, and if your sheet is named the same, it will perform the lookup in that month's sheet. So when you add in your February figures to the sheet named Feb, it will automatically lookup the numbers. Just be sure to check the TB data is always in the same columns.

Once you have this setup, it really is as simple as pasting a TB into a sheet in your workbook to update your YTD P&L - obviously unhide each month as you need it.

One word of warning - it is always a good idea to have some kind of automatic sum check to compare your P&L totals to the sum of the P&L accounts in your TB. I haven't put a solution in here as everyone's TB will look different, but just bear it in mind. Sometimes automating things too much can make you miss some crucial points (or new TB accounts!).

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Happy Spreadsheeting!