Excel Waterfall Chart Tutorial: Build and Format One

To make a waterfall chart in Excel for Microsoft 365 on Windows, put category labels in one column and the amounts that change a running total in the next, select the data, then choose Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall. After Excel creates the chart, mark subtotal or ending bars as totals by right-clicking each bar and choosing Set as Total.

What a waterfall chart shows

A waterfall chart, sometimes called a bridge chart, explains how a starting amount changes through a sequence of positive and negative contributions to reach an ending amount. Unlike a standard column chart, its intermediate bars usually float between the previous running total and the next one. The vertical position of each bar therefore shows its contribution, while its height shows the size of that change.

This makes the chart useful when the path between two totals matters as much as the totals themselves. Common examples include showing how a department’s opening budget becomes its closing budget, how revenue changes from one period to another, or how components of a profit figure contribute to the final result. It is less suitable when the purpose is simply to compare many unrelated values; a regular bar or column chart is usually easier to read for that.

Prepare the source data

Use two adjacent columns: one for the step name and one for the amount. Each ordinary row should represent a change, not a new running balance. Keep increases positive and decreases negative, and use a consistent sign convention throughout the series. For example, if costs reduce a balance, enter costs as negative values.

Here is a small budget bridge. The subtotal row is included as a checkpoint, rather than as another change to add:

Opening budget: 100
Additional funding: 35
Returns: -12
Subtotal after returns: 123
Costs: -50
Other adjustment: 8
Closing budget: 81

The arithmetic is 100 + 35 – 12 = 123, then 123 – 50 + 8 = 81. Because the subtotal is a checkpoint, it must be displayed as a total in the chart; otherwise Excel will interpret 123 as another increase and add it to the running amount. The opening and closing values are also totals, not changes. Put descriptive headers in the first row, avoid blank rows in the selected range, and keep numbers stored as numbers rather than text.

Create the chart in Excel

Enter the labels and values in adjacent columns, including the headers. For example, place Category in A1 and Amount in B1, with the seven example rows beneath them.
Select the complete two-column range, including the headers.
On the ribbon, choose Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall.
Excel inserts a chart based on the selected data. Move or resize it as needed by dragging its border or handles.
Inspect the opening, subtotal, and closing bars. Right-click a bar that represents a fixed checkpoint and choose Set as Total.

Excel commonly treats the first and last points as totals, but check the result rather than relying on that assumption. In the example, the subtotal after returns also needs to be set as a total. A correctly configured chart shows the opening bar from zero to 100, the changes stepping up and down, the subtotal at 123, and the closing bar from zero to 81. If the chart shows an unexpected jump at a subtotal, that point is probably being treated as a change.

Set subtotal and total bars

Waterfall totals are point-level settings. Select the chart, click the bar once to select the series, then click the same bar again to select that individual data point. Right-click the selected point and choose Set as Total. Depending on the selection, the first click may select the chart or the whole series; if the command is missing, click the intended bar again and open its context menu.

A total bar starts at the chart’s baseline instead of floating from the prior cumulative value. This is the right treatment for a starting balance, an ending balance, or an intermediate subtotal that represents the accumulated result at that stage. To reverse the setting, select the point and use the same Set as Total command again. Review every checkpoint after changes to the source data, because inserting or moving rows can alter which point the chart represents.

Format the chart for readability

Use a title that describes the measure and period, such as “FY2026 Budget Changes” or “Revenue Bridge, Q1 to Q2.” Category labels should be short enough to fit, but specific enough that a reader can identify each contribution without consulting a separate key. If labels wrap or overlap, widen the chart, shorten category wording, or reduce the number of displayed steps.

Excel distinguishes increases, decreases, and totals with separate fill colors. To change them, click the chart and open the Format Data Series pane, then adjust the fill settings for the relevant point categories. You can also select an individual bar and use the formatting controls on the ribbon. Keep the color logic consistent: for example, use one color for increases, another for decreases, and a neutral shade for totals. Avoid relying on color alone when the chart will be viewed in grayscale or by people with color-vision differences; clear labels and a legible axis still matter.

Use Chart Design > Add Chart Element to add or adjust a chart title, axis titles, data labels, or gridlines. Data labels can help when a precise change value matters, but too many labels can crowd a chart. A useful compromise is to label only important steps or to use a table alongside the chart. Keep the vertical axis scale appropriate to the story: truncating the axis can exaggerate visual differences, while a very wide scale can make modest changes difficult to see.

Read and validate the result

Read the chart from left to right. Each floating bar represents a contribution to the running amount, not a complete balance on its own. A bar rising from the previous level indicates an increase; one falling indicates a decrease. Total bars return to the baseline and show the accumulated amount at a checkpoint. The horizontal connectors help show how the current level carries into the next step.

Before sharing the chart, verify the data independently. Add the changes to the opening figure and compare the result with the displayed closing total. Check that every expense or reduction has the correct sign, that subtotals are set as totals, and that the chart includes all intended rows. A chart can be visually polished while still being wrong if a negative sign is missing or a subtotal is counted twice. If the source values change later, recheck both the arithmetic and the point settings.

Common problems and how to fix them

A subtotal appears as a huge increase. Select that individual bar and choose Set as Total. A subtotal is a checkpoint value, not an additional movement.
The chart runs in the wrong direction. Check the signs in the source data. Increases should be positive and decreases negative when the chart is intended to show a running balance.
Labels or values are missing. Confirm that the chart source includes the full range, that the amount cells contain numeric values, and that there are no unintended blank rows or columns breaking up the data.
The wrong row is a total. Select the bar for the specific category, not just the whole series, and toggle Set as Total. If the data order changed, verify the point labels before editing.
The chart is hard to interpret. Simplify category names, reduce unnecessary data labels, and use a clear title. If many small steps obscure the main story, combine related categories where that is meaningful and retain the detailed data in a supporting table.

When to use a waterfall instead of another chart

Choose a waterfall when you need to explain how a sequence of changes produces a net result. A clustered column chart is better for comparing separate categories side by side, such as sales by region, because its bars share a baseline. A line chart is often clearer for showing a continuous trend over time. A stacked column chart shows how parts compose a total across groups, but it does not naturally communicate a sequence of positive and negative steps in a running balance.

Waterfalls work best with a deliberate order: opening value, meaningful changes, any checkpoints, and ending value. They can become confusing when the categories are numerous, the sequence is arbitrary, or the audience only needs to compare magnitudes. In those cases, a sorted bar chart or a table may communicate the information more directly. The goal is not to use a waterfall because it looks distinctive; it is to make the movement from one total to another easier to understand.

Excel version and platform notes

The instructions above describe Excel for Microsoft 365 on Windows. Current desktop Excel versions provide a built-in Waterfall chart type; if the option is unavailable in an older installation, update Excel or use a compatible desktop version. On Mac, the Waterfall chart is available in current Excel, though ribbon placement and context-menu wording can vary slightly by release. Look under the Insert chart options and use the selected point’s context menu to set a total. Excel for the web may present different chart editing controls; if a point-level formatting command is missing, open the workbook in the desktop app.

When collaborating, confirm that colleagues can view the chart in their version of Excel and that the workbook’s source data remains available. A screenshot is not a substitute for the underlying chart if others need to inspect or update the figures. For a presentation or report, include enough context—units, period, and sign convention—so the chart remains understandable outside the workbook.

Frequently Asked Questions

How do I make a waterfall chart in Excel?
Select the category and value columns, then choose Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall. Mark any intermediate subtotal bars as totals using the bar’s right-click menu.

How do I add a subtotal to an Excel waterfall chart?
Add a row containing the subtotal value to the source data, then select that chart point and choose Set as Total. This makes the bar start at the baseline instead of treating the subtotal as another change.

Why is my waterfall chart adding the subtotal twice?
Excel is treating the subtotal as a positive or negative step. Set that point as a total. Also confirm that later changes are measured from the subtotal rather than from an earlier balance.

Can a waterfall chart show negative values?
Yes. Enter a decrease as a negative number. Excel displays it as a downward step in the running total; use a consistent convention so positive and negative signs mean the same thing throughout the chart.

Can I use a waterfall chart for monthly cash flow?
Yes, if the chart is meant to show how an opening cash balance changes through inflows and outflows to a closing balance. Use positive values for inflows, negative values for outflows, and set opening, closing, and any checkpoint balances as totals.

Try it: the Percentage Formula Generator: percent of, percent change, increase and decrease, with the formula.

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Sources: Function behaviour and menu paths: Microsoft Support documentation for Excel. Method & sources

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