Formula vs. Function: What’s the Difference in Excel?

When Microsoft first developed Excel in 1985, people thought of it as a spreadsheet application for businesses to use for their finances. Today, it's useful for many other reasons across different industries. In fact, many employers consider Microsoft Excel an in-demand job skill. Professionals ranging from retail managers and accountants to data analysts and business analysts use Excel. 

Formulas and functions are significant parts of using Excel spreadsheets, but many people confuse the two and even use them interchangeably. While they both perform calculations and allow you to manipulate data, they are two unique operations. Take a closer look at what formula versus function means in Excel and how you can sharpen your Excel skills. 

Read more: How to Earn a Microsoft Excel Certification (+ Why You Should)

What is a formula in Excel?

In Excel, a formula is a calculation that you, the user, design. You can use it in a cell to learn the value of that cell without having to do the calculations manually. To use this equation, start with an equal sign, followed by numbers, math operations, references, constants, and operators. Formulas can also contain functions—Microsoft refers to these as nested functions [1]. When you create a formula, you can assign it a defined name.  

Read more: What Is Excel? Formulas, Functions, and More

Advantages of formulas

Formulas allow you to create personalized solutions to your unique problems using Excel. Here are a few other advantages of formulas:

• You can save solutions for future repetitive use, which may speed up your productivity and make you more efficient.

• Formulas can also help you develop more organized layouts for your spreadsheets and help reduce the number of errors in your data.

• Formulas can also help you simplify complex calculations, but they can also help avoid creating complex situations.  

Disadvantages of formulas

Formulas designed by users come with their own set of limitations. You can't use them to insert, delete, or format cells, add names to a workbook, or change the Excel environment. Formulas also come with a complicated interface and a substantial learning curve that challenge even advanced Excel users to master.

What is a function in Excel?

Unlike user-created formulas, functions are predefined and already exist in the application. It uses arguments in a specific order or structure. Like formulas, you can use them for calculations you won’t have to perform manually. The primary difference between formulas and functions is in their creation. Users create formulas and functions using Microsoft Excel software. When using Excel, look at the ribbon at the top of the page and find the "Formula" tab. You'll find all of the functions listed there. 

Functions also start with an equal sign. Next, you'll add the function's name, followed by the arguments placed in parentheses. According to Microsoft, arguments can be numerals, logical values such as TRUE or FALSE, arrays, text, error values such as #N/A, cell references, constants, and formulas, among other functions [2]. 

Advantages of function 

Since functions are predefined, using them may help you speed up a task, like finding a sum or the minimum or maximum value of cells. Like formulas, functions can also help you simplify complex calculations. Functions are also great for sorting and extracting information from vast data sets. In general, users often find them easy to learn and use. 

Disadvantages of function

Functions have few disadvantages, but they do have their limitations. For example, functions only allow up to 255 arguments, which could impact your ability to use Excel for large-scale projects. You will also discover room for error if you aren't careful when using a function. Typing it incorrectly can prevent it from working correctly. 

How to build advanced skills in Excel

Taking courses, practicing working with Excel, and getting certified are all ways to begin advancing what you can do while working in this program. Having advanced skills in Excel on your resume may help you get a job or progress in your career. Knowing how to use Excel means improving your data management and analysis skills, sharing information more efficiently, and streamlining specific tasks, making you more productive. The following list offers ways to build your Excel skills.

Course work

Taking a course is one way to learn or perfect your Excel skills. Look for one online or in-person through colleges, universities, and other organizations or learning institutions. These options allow you to choose courses and programs designed to help you learn Excel within a specific timeframe, making finding one that fits your needs relatively simple. 

Boot camp

These fast-tracked programs help you learn the application quickly, usually within a few days. For example, Stanford University offers a three-day Excel boot camp that ends with you earning a Stanford Technology Training Excel Proficiency Certification upon completing the exam. Emory University also provides an Excel boot camp with format options like instructor-led online, instructor-led in-person, and flexibility-paced. The boot camp promises to prepare you for the Excel certification exam as well. 

Online tutorial

Microsoft itself offers an online tutorial for learning Excel. This video training program is free for anyone to access, and you can start with an intro and some basic topics, like "cells," "formatting," and "rows and columns." You can also watch a video on formulas and functions and a formula creation tutorial. 

Practice

If you learn by doing, practicing Excel through hands-on experience may be best for you. Microsoft has various tasks you can perform, as listed on its website. You can also find several other websites online that allow you to practice using multiple exercises.     

Read more: Google Sheets vs. Excel: What’s the Difference?

Certification 

Earning Excel certifications can help you gain skills and look good on your resume. Microsoft offers two Microsoft Office Specialist certifications in Excel: Associate and Expert. You can also choose the one that correlates with the version of Excel you use: 2016, 2019, or 365. For each certification, you'll take part in training and then complete and pass an exam. 

Getting started with Coursera

Excel is a valuable skill to learn, with uses ranging from simple calculations to complex data functions. Learning advanced Excel skills may help you succeed in your chosen position. 

You'll find numerous options for learning Excel or building upon your current Excel skills offered by some of the world's top businesses and educational institutions on Coursera. Consider Work Smarter with Microsoft Excel provided by Microsoft, Excel Basics for Data Analysis offered by IBM, or Business Analytics with Excel: Elementary to Advanced from Johns Hopkins University.