Difference Between Formula and Function in Excel

Many people use formulas and functions in Excel interchangeably. Interestingly, these two are not the same, and even people already working on Excel are unaware of this. This article will discuss the differences between formula and function in Excel.

Content

• Formulas in Excel – Definition
• Functions in Excel – Definition
• Difference Between Formula and Function in Excel

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Formulas in Excel – Definition

As the name suggests, a formula in Excel is a mathematical equation. It is made from values ​​or mathematical data we have entered into the cells. You can create a formula from direct values ​​or with cell references. All formulas begin with the symbol = and then add the equation values.

Formulas must begin with an equal sign. Further, you must add the arguments to calculate and get the final expressions. Once you add a formula to a cell, you’ll see it displayed in the formula bar at the top of the sheet.

Formulas With Functions

If you select a function that you want to use, add it to the formula, and then include arguments that can include cell references, numbers, or text values. Examples of simple formulas that use functions in Excel are:

=SUM(B2:B10)

=COUNT(B2:B10)

=AVERAGE(B2:B10)

=TRIM(B1)

Formulas Without Functions

You can use formulas alone, without functions. This way, you can perform tasks such as adding numbers and multiplying cell values. Examples of basic formulas without functions in Excel include:

=A1+A2

=C1-C2

=2*4

=B1/B2

=D1*D2

Functions in Excel – Definition

Functions in Excel are formulas predefined within the spreadsheet; they are executed using specific values ​​known as arguments. These values are structured and follow a particular sequence, like an Excel macro.

Unlike formulas, we cannot modify the content of functions. Functions perform simple calculations such as SUM or AVERAGE but also many more complex ones. They are displayed in capital letters, available for selection and use, and can be inserted into created formulas.

Every function in Excel requires a specific syntax or composition. You can see this syntax when entering a function that helps you create the formula. For example, if you click the Insert Function (fx) icon to the left of the formula bar, you can search for a function to insert.

The required syntax for each function in the list is displayed at the bottom of the window.

In Functions, you can see some syntax arguments, like “value” or “number.” These arguments tell the function what it needs to calculate. You can use some functions without arguments. However, you can’t use functions like the SUM function. It must be placed in a formula that contains arguments enclosed in parentheses.

On the other hand, functions can also be used without arguments. For example, to insert the current date and time into a cell, you can use NOW(), a fundamental function. As you can see, there are no arguments, but parentheses accompany the function as part of the syntax.

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Difference Between Formula and Function in Excel

The main difference between a function and a formula is that a function is a predefined formula available in MS Excel, while a formula is a predefined calculation that uses cell references or hard-coded numbers to calculate a cell value.

Technically, you can call a function a formula. The only difference is that a function is a predefined formula. We do not get to create functions. We can use formulas with functions. 

So, the easiest way to tell the difference between a function and a formula in Excel is to insert a function into a formula you create.

• Function: Predefined by Excel and can be inserted into a formula.
• Formula: User-defined and can be used with or without a function.

Here is a comparative table suggesting the main difference between formula and function in Excel

You can create functions from mathematical formulas, but you cannot modify them. The program predefines them.

They have in common that both resources facilitate mathematical operations, beginning with the = symbol. But its structure is different. You can create formulas by adding values ​​and assigning the mathematical operation (+,-,*,/).

Functions are made from arguments using parentheses. A practical case would be:

Example of a formula: = A1+B1

Example of a function: =SUM(A1:B1)

Excel helps fill in the arguments correctly. If you miswrite any sequence, a warning pops up and offers options to correct it.

Check how Excel recommends correcting a typo in the formula in the above example. However, you need to pay attention to ensure that you don’t make any errors while creating any formula; Excel detects typos and no major misses.

How to Handle Errors in Excel Formulas

Excel provides built-in error handling to indicate any issues in a formula. These errors may occur mainly because of incorrect syntax, invalid references, or impossible calculations. Recognizing these errors and troubleshooting them can improve accuracy. 

Common Excel Errors and Fixes

1. #DIV/0! (Division by Zero Error)

Occurs when a number is divided by zero or an empty cell.
Example: =A1/B1 (if B1 is 0 or blank)
Fix: Use IF or IFERROR:

=IF(B1=0, "Error", A1/B1)

2. #VALUE! (Invalid Data Type Error)

Happens when a formula includes incompatible data types (e.g., text in arithmetic).
Example: ="Text" + 5
Fix: Convert text to numbers:

=VALUE(A1) + 5

3. #REF! (Invalid Cell Reference Error)

Occurs when a formula refers to a deleted cell.
Example: =A1+B1 (if B1 is deleted)
Fix: Restore the deleted reference or update the formula.

4. #NAME? (Undefined Name Error)

Appears when Excel does not recognize a function or range.
Example: =SUMM(A1:A10)
Fix: Correct function names (SUM instead of SUMM).

5. #N/A (No Available Value Error)

Occurs when a lookup function cannot find a value.
Example: =VLOOKUP(50, A2:B10, 2, FALSE)
Fix: Use IFNA:

=IFNA(VLOOKUP(50, A2:B10, 2, FALSE), "Not Found")

6. #NUM! (Invalid Number Error)

Occurs in invalid calculations like =SQRT(-4).
Fix: Use ABS:

=SQRT(ABS(A1))

7. #NULL! (Incorrect Range Operator Error)

Caused by incorrect range syntax.
Example: =SUM(A1 A10)
Fix: Use : instead:

=SUM(A1:A10)

Excel errors can be prevented and resolved efficiently using IFERROR, IFNA, and proper syntax.

Conclusion

We hope you now understand how functions and formulas are essential tools in spreadsheets and mathematical calculations and serve different purposes. A formula is a user-defined expression that calculates a value based on specific inputs using operators and cell references. In contrast, a function is a predefined operation that performs a particular task and simplifies complex calculations, often requiring only a few inputs. Understanding the difference between these two helps users apply the appropriate method to achieve accurate and efficient results in their data analysis and problem-solving tasks.