Look at the example shown below, which shows the same profit and loss statement first of all in whole Euros and then again in thousands of Euros (TEUR). Which column is easier to understand?
🏅 The second column wins hands down. This is because the average number of digits shown per number (significant figures) in the Euros column is 6 or 7 and in the TEUR column it is just 3 or 4, which is much easier to read and comparing columns (e.g. years) also becomes much easier.
Select appropriate units
Decide at the planning and design stage which units you will use for values in your workbook. The best units to choose depends upon the size of the numbers which you will be dealing with: the larger the numbers, the less digits you should show. For monetary units, I generally recommend either:
- Thousands of Dollars/Pounds/Euros/etc. (with no decimal places) or
- Millions of Dollars/Pounds/Euros/etc. (with one decimal place)
Select the units so that values shown have no more than 4 significant figures (visible digits in each number). This makes them easier to enter, use and interpret. Using too many digits not only make these tasks harder, but also gives a false sense of accuracy in plan figures.
State your units
Clearly state the units you are using at the top of each worksheet or even each row of your workbook, so users know what they represent.
You may wish to use whole dollars/pounds/euros in some circumstances, where this is more understandable and user-friendly – e.g. for price per article or average salary – but especially here you must clearly state the units. Ensure you convert results to the standard workbook units of (says) thousands of Euros for further calculations or outputs.