A do-it-yourself automated invoicing system: even a CPA with little computer training can build one.

Key to Instructions

To help readers follow the instructions in this article, we use two different typefaces.

Boldface type is used to identify the names of icons, agendas and URLs.

Sans serif type indicates commands and instructions that users should type into the computer and the names of files.

You don't have to be a technology wizard to he]p your company or client take a major first step into the advanced computer age. For example, in less than an hour even a low-tech CPA can create an automated invoice and billing system to replace the slow and error-prone paper-based methods many of their small business clients use. Not only can such a system practically eliminate mistakes and speed bookkeeping and accounting tasks, but it also takes less than an hour of training to teach staff how to use it.

Follow along with me and I'll show you how to set one up; all you need is a computer loaded with Excel and some rudimentary knowledge of that application.

EASY TO BUILD

To illustrate how it can be done, I've designed an Excel spreadsheet for a small garden shop that will generate invoices and perform routine accounting tasks.

Let's begin by creating two Excel worksheets. Name one Customers and add data to columns with headings such as customer names, addresses, phone and fax numbers and any special selling terms offered them. It should resemble the format of exhibit 1, below. If you wish, you can download an operational copy of the finished Excel file from www. aicpa.org/download/pubs/jofa/2004_04_rose-example.xls.

[ILLUSTRATION OMITTED]

Now assign a number to each customer and sort the worksheet by those numbers. To perform a Sort, highlight everything except the column headings and then click on Data, Sort.

Name the other worksheet Products. It will store your product information: item number (or code), description and unit price. It should resemble exhibit 2, above. Sort that list by item number, too.

Next we'll create a basic invoice form, again in the same Excel file, that will eventually link to the Products and Customers worksheets. The invoice form doesn't have to be a drab looking conventional spreadsheet; Excel has very attractive typefaces, and you even can insert your company logo if you have it saved in electronic form. If you don't and you have a scanner, scan it in. Of you can get it scanned at any office supply shop.

To access Excel's graphics and all its typefaces, click on Insert, Picture and WordArt. Exhibit 3, at right, is an example of the type of invoice you can quickly create with Excel.

[ILLUSTRATION OMITTED]

Once you've finished the invoice design insert the formulas that transform the spreadsheets to work as a database. We'll be using Excel's VLOOKUP functions. After we're done, a clerk simply has to type into the invoice a customer number, the product codes of the customer's purchases and their quantities. Once entered, VLOOKUP takes over--automatically filling in the necessary information about the customer and the order, as illustrated in exhibit 3.

The VLOOKUP functions must be entered into every cell that relates to information about Customers and Products. To make it easier to visualize on the sample invoice, I've colored yellow the cells that will be entered by the store clerk. The VLOOKUP formulas automatically fill in the red and blue cells. The colors are for reference only and are not needed in your final product. Red cells contain VLOOKUP functions that retrieve data from the Customers sheet and blue cells contain functions that retrieve data from the Products sheet. The Date cell contains a TODAY function that automatically fills in the date of the sale.

Let's begin with the red Customer Name cell (F12 in the sample worksheet). With the cursor in that cell, click on Insert, Function, Lookup & Reference, VLOOKUP and then on OK. That will bring up the VLOOKUP function arguments (exhibit 4, page 75), which tell the software where to locate data.

[ILLUSTRATION OMITTED]

The first argument is the Lookup_value, which refers to the cell that is used to look up information from other sheets. For the customer data, the Lookup_value for all VLOOKUP functions will refer to the cell where the customer number is entered into the invoice (the yellow F11 cell in the sample file). For product data all Lookup_values will refer to the cells where product numbers are entered to the invoice (the yellow C25 and C26 cells in the sample file).

The Table_array refers to the location of the data the invoice will be seeking. For all VLOOKUP functions in the red customer-related cells, choose the range of data in the Customers sheet, excluding the headings (A4:L7 in the sample file). For the Column_index_number, type the column number where the specific data field you need to retrieve is situated. For example, when you create a VLOOKUP function in the Customer Name cell, you would enter 2 for the column number, because the customer names are listed in the second column of the Customers sheet.

Finally, set the Range_lookup to FALSE, which forces the function to look for an exact match for the customer number in the Customers sheet. The completed VLOOKUP function for the Customer Name cell (F12) is presented in exhibit 5, above.

[ILLUSTRATION OMITTED]

The only portion of the VLOOKUP functions that changes for the various red customer information cells is the Column_index_number. That is, all of these VLOOKUP functions use the customer number entered by the clerk as the Lookup value (F11) and all of the customer VLOOKUP functions look up data from the Customer sheet (A4:L7).

PRODUCT NUMBERS

Now I'll create VLOOKUP functions to locate products. The blue Description and Unit Price fields fill in automatically upon entry of an item number. The Lookup_value for each of these functions will be the cell where a product number is entered in the invoice (C25 and C26 in the sample file). Each product description and price cell will require a different Lookup_value because multiple product numbers can be entered on the invoice. The Table_array is the range of data from the prices table (A4:C13), and the Column_index_number again will correspond to the column that marches the data you wish to pull out of the prices table (that is, 2 for Description and 3 for Unit Price). The total and subtotal fields simply have SUM formulas, and the total price field calculates unit price times quantity. Exhibit 6, at left, presents the VLOOKUP formulas needed for each red and blue cell on the Invoice sheet.

After you've entered the functions, notice the cells that contain them are filled with a no-answer code--#N/A--before you input a customer of product number. That's because the VLOOKUP function cannot operate until the Lookup_value cell contains data. To eliminate the clutter created by the #N/A text, you can nest the VLOOKUP functions inside IF functions. The IF functions tell Excel not to input anything into the customer or product information cells when the customer number of product number cells are blank. The IF function for the Customer information cells looks like this: =IF($F$11="","",VLOOKUP($F$11,Customers!$A$4:$L$7,2)).

In this example F11 is the cell where the customer number is entered, and the VLOOKUP function is retrieving information from the second column of the customer table. When F11 is blank, the cell where the VLOOKUP function is input also is blank. When F11 is not blank, the VLOOKUP function operates. Create similar nested IF functions for all of the VLOOKUP functions on your sheet by clicking on a cell where there is a VLOOKUP function. In the formula bar at the top of the sheet, edit the function as shown above. The VLOOKUP functions for product information also must be edited. The edited functions for product information will look like this: =IF(C26="","" ,VLOOKUP(C26,Products!$A$4:$C$13,2)).

In this function C26 is where a product number is entered. The cell used in the IF function should match the Lookup_value in each of the product VLOOKUP functions.

DATA PROTECTION

You can add protection (access controls) to prevent unauthorized changes to the Customers and Products tables. To do that go to the Customers and Products worksheets. On the Tools menu click on Protection, Protect Sheet and type a password for the sheet (our password for the sample file is password).

Although access control is optional, consider this: If you don't provide protection, any user can change the data. When you protect a sheet, all cells are locked by default and cannot be changed. As a result the Invoice sheet requires that some cells be unlocked prior to protection. You must unlock the cells where users input information (that is, the yellow cells for the customer number, product number, quantity sold and invoice number). Select each cell or range of cells, click on Format, Cells, the Protection tab and then clear the Locked check box. After unlocking the appropriate cells, protect the Invoice sheet and create a password.

That's it. You've just created an automated invoice form. You can use the same procedures to create any type of automated forms (such as purchasing forms) and turn your Excel sheets into automated database tables.

Exhibit 1

Customer   Customer
number     name           Address          City       State

1          Ben Jones      333 Street       Norman     OK
2          Cathy Land     222 Here         George     IL
3          Martha Smith   444 Everywhere   Fluffy     NA
4          Jack Morris    000 Nowhere      Jupiler    NA

Customer   Customer       Phone
number     name           Country          State      Zip

1          Ben Jones      555-5555         US         12345
2          Cathy Land     555-5555         US         23456
3          Martha Smith   555-5555         US         34567
4          Jack Morris    555-5555         US         45678

Customer   Customer                 Discount    Discount    Net
number     name             Fax     % offered     days     days

1          Ben Jones      555-5555         2%        10      30
2          Cathy Land     555-5555         1%        15      30
3          Martha Smith   555-5555         5%        15      30
4          Jack Morris    555-5555         2%        20     120

Product List

Item                   Unit
number   Description   Price

101      Pansy          $2.00
102      Violet         $3.00
103      Fern           $4.00
104      Plant         $30.00
105      Stick         $20.00
106      Weed          $28.00
107      Cart          $50.00
108      Hose          $24.00
109      Sprinkler     $12.00
110      Shovel        $17.00

Exhibit 6

Item          Cell   Formula

Name          F12    =VLOOKUP($F$11,Customers!$A$4:$L$7,2,FALSE)
Address       E15    =VLOOKUP($F$11,Customers!$A$4:$L$7,3,FALSE)
City          E16    =VLOOKUP(SF$11,Customers!$A$4:$L$7,4,FALSE)
Country       E17    =VLOOKUP($F$11,Customers!$AS4:$L$7,7,FALSE)
State         H16    =VLOOKUP($F$11,Customers!$A$4:$L$7,5,FALSE)
ZIP           H17    =VLOOKUP(SFS11,Customers!$A$4:$L$7,8,FALSE)
Phone         J16    =VLOOKUP($F$11,Customers!$A$4:$L$7,6,FALSE)
Fax           J17    =VLOOKUP($F$11,Customers!$A$4:$L$7,9,FALSE)
Discount%     E20    =VLOOKUP(SF$11,Customers!$A$4:$L$7,10,FALSE)
Disc days     E21    =VLOOKUP($F$11,Cnstomers!$A$4:$L$7,11,FALSE)
Net days      K21    =VLOOKUP($F$11,Customers!$A$4:$L$7,12,FALSE)
Description   F25    =VLOOKUP(C25,Products!$A$4:$C$13,2,FALSE)
Unit price    I25    =VLOOKUP(C25,Products!$A$4:$C$8,3,FALSE)
Description   F26    =VLOOKUP(C26,Products!$A$4:$C$13,2,FALSE)
Unit price    I26    =VLOOKUP(C26,Products!$A$4:$C$8,3,FALSE)

AICPA

Conference TECH 2004: The AICPA Information Technology Conference May 2-5, 2004 Venetian, Las Vegas

JACOB M. ROSE, PhD, is an assistant professor at Montana State University, Bozeman, and principal of Progression Consulting Group (www.progresslongroup.com). His e-mail address is jakerose@montana. edu.