Microsoft released its latest version of the Office family of products at the beginning of 2007, and the newest incarnation of the spreadsheet application Excel was highly anticipated. Significant improvements were expected.

Excel 2007, however, was received with mixed reviews by its early adopters -- some users love it, but others do not. Despite the large gap in opinion, many users find there is a significant learning curve to become proficient with their newest investment.

There are still a large number of users that have not upgraded to the new version, opting to stay with Excel 2003 or an earlier version until they can determine whether or not they should make the leap. Several are asking questions about the differences between their current version and Excel 2007 in order to evaluate if it is worth the time and financial investment required to upgrade.

If you or your clients are considering an upgrade, read on to learn the most significant changes and evaluate the benefits and/or drawbacks of that decision.

Major Facelift

The first and most surprising difference you will notice is the user interface, which will likely be the biggest factor in determining whether or not you like it. The familiar menu- and button-driven toolbars have been replaced by the "Ribbon." The Ribbon is a component of Microsoft's new fluent user interface, which is designed to increase productivity.

All the familiar commands are now organized into a collection of logical groupings listed under an activity tab such a "Page Layout" or "Formulas." Additionally, certain tabs such as "Picture Tools" will remain hidden to reduce screen clutter and will appear only when needed.

There is no way to replace the Ribbon with the traditional toolbars and menus from the earlier versions of Excel; however, it can be minimized to increase the amount of viewable screen. Older versions of Excel allowed you to add or remove toolbar buttons for easy customization or create buttons to activate custom macros. The Ribbon does not have this functionality; instead you can only add the buttons to the quick access toolbar.

Be advised -- there could be a significant learning curve with the Ribbon. The new interface has taken users up to two to three weeks to become proficient and accomplish similar tasks they completed before the upgrade. The major part of the learning process is figuring out which tab on the Ribbon holds the functions you want to use. Soon you will find that many of the functions that were buried in a "Built-in Menu" in earlier versions (e.g. filters) are now available on one of the tabs or appear when you need to use them, such as the "Picture Tools" mentioned above.

Macros

If you like macros, there's encouraging news. If you created custom toolbars with macros using a previous version of Excel, the macros and toolbars can be imported into Excel 2007, though macros are handled differently in the new version.

Many macros written in Excel 2003 and earlier will not run properly in 2007, so they will have to be modified. The modification will be challenging because the macro recording function may not give you the necessary clues to make the corrections. Additionally, if you password protect a workbook containing macros, then macros will be disabled unless you make a modification in the Windows registry entry that enables this security function by default.

If the macros and toolbars are attached to a separate Excel worksheet, opening that worksheet in the new version will import those macros and toolbars and create a new tab on the Ribbon labeled "Add-Ins." Although you will lose the ability to move the toolbars to different parts of the screen, the significant time spent creating these custom toolbars and macros will not be lost completely. Additionally, though the macros can be edited, the toolbars and buttons cannot be changed.

Performance Enhancements

Speed and capacity. Excel 2007 has been programmed to take advantage of newer system hardware such as multiple processors and multithreaded chipsets, which are found in the current mainstream desktop and laptop computers. This allows the application to complete calculations on large, formula-intensive worksheets faster than its predecessors. The application's memory management has been revamped to utilize twice the amount of memory to two gigabytes, which further enhances performance. Other improvements include increasing Excel's capacity to more than 1 million rows and more than 16,000 columns. All of the enhancements will allow users to handle massive amounts of data and improve Excel's efficiency. The individual cell capacity is also increased. You will no longer get the annoying "255 character limit" message when you are copying worksheets, and now large text boxes will not get truncated.

Have you upgraded to Excel 2007? Yes No, and I'll wait as long as I can before upgrading No, but I plan to very soon

Data analysis. Sorting and filtering are enhanced to making it faster and more efficient to arrange your worksheet data and work with larger amounts of complex data. It is now possible to sort by cell background color, date and up to 64 different levels of items. The "AutoFilters" function allows you to select any number of items for filter conditions using the multi-select option. Quick filters, such as filtering by quarter, are also available for simple data sorting. Finally, filter sets can be reapplied with the single click of a button.

Charts. Another difference is the development of "Shared Charting." Excel 2007 charts can be shared by other Office applications such as Word and PowerPoint. This will allow these applications to take advantage of all of Excel's functionality, such as the use of formulas, sorting, filtering and charting to external data sources like Microsoft SQL Server. Excel charts used in PowerPoint can be enhanced with animations to place emphasis on data and increase the quality of the presentation. In addition, Excel 2007 charts can be copied and pasted into other programs such as Word or PowerPoint either as an embedded object or a separate file. Once pasted into the program, the chart will automatically change to match the current presentation or you may opt to retain the Excel chart format.

Finally, charts in Excel 2007 have been updated from their predecessors to include special effects formats such as 3-D, transparency and soft shadows. The charts are now created by OfficeArt, allowing you nearly the same flexibility and options for the charts or any of their elements. For example, you can use transparency to make any area stand out that may be partially obscured in a chart layout. The chart lines have been cleaned up to appear less jagged and ClearType fonts are now available to add to the visual appeal. The color palette has been expanded to allow you to select more than 16 million possible colors.

What's New?

Aside from the enhancements to the user interface and performance, there were some other useful additions to the new version.

Formatting made easier. It may seem like a simple task already, but formatting cells is now even simpler. The new "Format Preview" function takes a lot of the guess work out of formatting. This new function allows you to preview fonts, text and cell colors, and text styles before you apply them. You can browse the various options and the selected cells will change to match whatever you scroll over. You no longer have to change the formatting multiple times to find the one you want.

Mini Toolbar. Another new function that makes formatting easier is the "Mini Toolbar." When you right-click on a selected cell, a Mini Toolbar appears in addition to the typical menu you are used to seeing in earlier versions. This toolbar is an abbreviated version of the formatting toolbar and provides quick access to commonly used functions, such as font, font size, cell color and many others.

Status bar. You are probably familiar with Excel's status bar, which is typically used to display the sum or average of highlighted cells. To change the display from sum to average or count, you had to right-click and choose the new option. Now, instead of being stuck with only one option at a time, you can select to display all six options at once, including sum, average, minimum and maximum. You can also change several other display options for the status bar (up to 22 in total). Although simple, this is still another significant improvement over previous versions that will help improve productivity.

Formula bar. In previous versions, the formula bar would expand as additional rows of text were added. For cells with a lot of text, the formula bar could even expand to cover all or part of the worksheet, making it difficult to view your work. The improved formula bar can be expanded to multiple rows or minimized to one row of text. Microsoft also added a scroll bar allowing you to scroll through multiple rows of text without the formula bar covering your workspace.

Compatibility

When making the decision to upgrade, it would help to consider what version your clients and business partners are using. Although older versions of Excel are easily compatible with Excel 2007, backward compatibility is no longer automatic. Excel 2007 files now have an ".xlsx" extension compared to ".xls" in previous versions. This is because the files are now based on an Open XML Format. Microsoft has reported that this new format provides additional benefits, such as built in ZIP compression for file size reduction up to 75 percent, improved damaged-file recovery and better privacy protection.

The new and improved file structure does create compatibility issues when you attempt to share files with users who still have older versions of Excel. These new files cannot be opened in older versions without downloading a special add-in provided by Microsoft, but even then the files can only be viewed. Excel 2007 does allow you to save the files in a compatible file format, but this virtually eliminates many of the benefits of upgrading to the new version. Some of the formulas and functions are incompatible with older formats, so they are often disabled, generate errors or produce invalid formula results when viewed using the previous version. There is a built-in "Compatibility Checker" that will automatically check for compatibility issues and help you correct them before you share the file.

Considerations

As you can see, there are several differences, enhancements and even some challenges moving from Excel 2003 to 2007, which makes the upgrade option tempting to most power users. However, for the typical user who only uses the basic functionality of the spreadsheet application, it may not offer any additional benefits to warrant the cost and the learning curve.

But the reality is that the older versions of Excel will eventually sunset and Microsoft will no longer support them -- so it would be more practical to begin the transition into the newest platform before that time comes.

As a side note, we must all remember that software, no matter what the version, is not 100 percent infallible, which may support the case that it is best to wait before you rush out to buy an upgrade. Some of the early adopters discovered what appeared to be a serious mathematical calculation flaw soon after Excel 2007 was released. However, upon further analysis, it was discovered the flaw was an issue in the way the calculation results were being displayed and not how Excel actually performed the calculation. This issue has been addressed and will be patched by Microsoft presently, but there will likely be other issues that arise as the application continues to gain popularity.

Before taking the plunge, take these factors into consideration:

• How do you use Excel on a daily basis?
• Do you prepare simple worksheets or create complex, data-intensive spreadsheets?
• Is your typical Excel user a basic, day-to-day user or a power user whose work stresses the limits of the application's abilities?
• What kind of hardware are you using? Will the performance and capacity enhancements be too intense for your existing equipment? Or, are you also in the process of upgrading your equipment?
• What version do your clients, business partners or other operating units use? Will you need to make most of your files backward compatible for sharing externally or will most files be kept for use internally?

After answering these questions, you will be in a better position to decide whether you want or need to upgrade to Excel 2007.

The opinions expressed in this article are those of its authors and not of the authors' employers.

JAMES P. DAVIS, JR., CPA, CITP, is a senior accountant with Colby and Company, PLC in Chesapeake. In addition to specializing in IT consulting at Colby, he has many years of experience in traditional accounting services for various industries. He was voted as a Super CPA for 2007 and also sits on the VSCPA Editorial Task Force.

HAVEN S. POPE, CPA, MBA, CFE, is a senior internal auditor at CarMax, Inc. in Richmond. He has more than seven years of audit and accounting experience. Before joining CarMax, Inc. in October 2007, he was a manager in Audit & Enterprise Risk Services at Deloitte & Touche LLP. He also sits on the VSCPA Editorial Task Force.