Waterfall Chart in Excel: Setup and Troubleshooting

To set up a waterfall chart in Excel for Microsoft 365 on Windows, put each step and its positive or negative change in two columns, select the data, then choose Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall. In the chart, mark opening and closing balances as totals so they start from the baseline rather than appearing as additional changes.

What a waterfall chart shows

A waterfall chart explains how a starting value changes through a sequence of additions and subtractions to reach an ending value. Its floating bars make the running effect visible: increases rise from the previous subtotal, while decreases fall from it. Connector lines help the eye follow that progression across the chart.

This makes the chart useful for explaining a budget variance, monthly cash movement, inventory changes, or the steps behind a change in profit. It is different from a standard column chart, where every bar normally begins at zero. In a waterfall, most bars represent the difference between two running balances, not the complete balance at that point.

That distinction matters when preparing the source data. Enter the changes as values, not a list of cumulative balances. The chart uses the sequence and signs of those values to build its visual steps.

Prepare the source data

Use one column for category names and one for the numeric values. Keep the rows in the order you want them to appear, with an opening amount first, the changes in the middle, and an ending amount last. Include a header row to make the series easier to identify.

Use positive numbers for increases and negative numbers for decreases.
Enter actual numbers in the value column, not numbers stored as text.
Use a consistent unit, such as dollars, thousands of dollars, units, or percentage points.
Keep each row to one meaningful step; combine tiny items into a category such as Other if they clutter the explanation.
Do not insert blank rows inside the data range, because they can create empty categories or interrupt the chart.

For instance, a simple cash movement might list Opening cash balance, New receipts, Refunds, Operating costs, and Closing cash balance. If the opening balance is 100, receipts are 30, refunds are -12, and costs are -20, the closing balance is 98. The arithmetic is 100 + 30 – 12 – 20 = 98. The first and last entries are balances; the three entries between them are changes.

Create the chart in Excel

Enter the category labels in the first column and the amounts in the second, including the column headings.
Select the full range, including the headings. For the cash example, select the two columns containing the five categories and their values.
On the ribbon, choose Insert > Insert Waterfall, Funnel, Stock, Surface or Radar Chart > Waterfall.
Excel inserts the chart on the worksheet. Drag it to reposition it, or use the chart handles to resize it.
Check that the categories appear in the intended order and that the bars move from the opening balance through the changes to the closing balance.

If the chart button is not visible, look in the Charts area of the Insert tab for the chart-type dropdown. Ribbon layouts can differ slightly with window size or Excel updates. On current Excel for Mac versions, use the Insert tab and choose the Waterfall chart type from the chart options; menu placement can look different from Windows. If you cannot create or edit that chart type in Excel for the web, open the workbook in the desktop app.

Mark opening balances, ending balances, and subtotals

A total is not another change. It represents the full balance at a particular point and should begin at the chart’s baseline. Excel may not interpret every balance in the way your audience expects, so inspect the first and last bars and explicitly set them as totals when needed. The same applies to intermediate subtotals, such as a quarterly total between monthly changes.

Click the chart, then click the specific bar once to select the data series and again to select just that data point.
Right-click the selected point and choose Set as Total.
Repeat for the opening balance, closing balance, and any intermediate subtotal that should start from the baseline.

A total bar should visually extend from zero to its amount, while the changes should float between the previous and new running values. If you set a change as a total by mistake, use the same context menu to clear its total status, if that option is shown, or choose Set as Total again to toggle the setting. Verify the resulting step against the underlying arithmetic rather than relying on color alone.

Format the chart for easy reading

Give the chart a title that describes the movement and its period, such as Cash balance changes, Q1. To edit the title, select it and type the replacement. For more chart elements, select the chart and use Chart Design > Add Chart Element. Depending on the element, you can add axis titles, data labels, a legend, or gridlines. Data labels can be useful when readers need exact values, but a label on every small step can make a busy chart hard to scan.

Use a number format that matches the units in the source data. If the figures are in thousands, say so in the title or an axis title; do not rely on readers to infer the scale. To change number formatting, right-click the relevant axis or data labels and choose Format Axis or Format Data Labels, as appropriate. Keep category labels short enough to read, and widen the chart if long labels wrap or overlap.

Increase, decrease, and total bars can have different fills. Select an individual bar and use the formatting pane to set its fill, or apply a restrained color scheme that remains clear when printed in grayscale. Color should reinforce the direction of movement, not replace signs, labels, or a sensible category order. Connector lines can help show the running sequence; if they are distracting, select the series and check the available series formatting options.

Check the arithmetic and tell a clear story

Before sharing the chart, calculate the running balance independently or reconcile it to a trusted total in the workbook. For the cash example, the intermediate balances are 130 after receipts, 118 after refunds, and 98 after costs. The displayed closing total should therefore be 98. If the final bar instead appears to add 98 to the preceding balance, Excel is treating the closing figure as a change rather than a total.

Also consider whether the order is meaningful. A bridge from opening to closing balance usually follows the actual process or a consistent grouping. If the categories are rearranged to emphasize the largest effects, make that choice clear; a different order can change the visual story even when the final arithmetic is unchanged. For a financial variance, separate favorable and unfavorable changes only when the direction is defined from the intended point of view. A lower expense may be favorable even though its numeric movement is negative.

Waterfall charts are most effective when there are a manageable number of steps and one clearly defined measure. If dozens of small movements obscure the main drivers, group them, show a selected set of contributors, or provide a supporting table. Keep the detailed data available for readers who need to reconcile the summarized view.

Common problems and how to fix them

Every bar looks like a full column. Check whether the data contains cumulative balances instead of individual changes. Keep the opening and closing balances as totals, and use the differences between balances for the middle rows.
The ending number is wrong. Confirm the signs of decreases, the order of the rows, and the arithmetic. Then select the ending point and use Set as Total if it is being plotted as a change.
A decrease moves upward. A value entered as positive is an increase to Excel. Correct its sign in the source data and confirm the chart updates.
Labels or bars are missing. Check that the selected data range includes all intended rows and that the values are numeric. Text-formatted numbers may not behave like numbers; convert them to numeric values before charting.
The chart includes an unwanted blank category. Inspect the selected range for blank rows, extra cells, or a stray label, then adjust the source range.
The chart is hard to interpret. Add or clarify the title and units, label the important values, shorten category names, and remove unnecessary decoration. A chart can be technically correct but still confusing if the audience cannot tell what the totals represent.

Editing, updating, and sharing the chart

When you change a value in the chart’s source range, Excel generally updates the chart automatically. Adding rows directly below a range does not always expand a chart that uses a fixed cell range. If a newly added step does not appear, select the chart and use Chart Design > Select Data to inspect or adjust the chart data range. Converting the source range to an Excel table can make data management easier, although you should still confirm that the chart includes new rows after changes.

For a clear handoff, keep the chart near its source data or place it on a separate presentation sheet with a visible link to the supporting detail. Include the period, units, and definitions of key terms. If you share the workbook with someone using another Excel version or a non-Excel spreadsheet app, check the chart after opening it there; chart appearance and editing support can vary. A static image may preserve the appearance for a presentation, but it will not update when the source numbers change.

Frequently Asked Questions

Can I make a waterfall chart in Excel without a template?
Yes. In Excel for Microsoft 365, select a two-column category-and-value range and insert the built-in Waterfall chart from the Insert tab. Then mark the opening, closing, and subtotal points as totals where appropriate.

Why does my final total appear to be added again?
The final balance is likely being treated as another change. Select that bar, right-click it, and choose Set as Total. A closing balance should show the result of the preceding changes, not be added on top of them.

Can a waterfall chart show both positive and negative values?
Yes. Enter increases as positive values and decreases as negative values. Excel uses the sign of each change to show whether the running balance rises or falls.

Can I change the colors of individual bars?
Yes. Select the particular data point and use the formatting pane to change its fill. Distinct colors can clarify increases, decreases, and totals, but retain labels or other cues so the chart remains understandable without color.

What is the difference between a waterfall chart and a regular column chart?
A regular column chart usually plots each value from a common zero baseline. A waterfall chart plots changes as floating steps from the previous running balance, while totals start from the baseline. Use the waterfall when the path from a starting value to an ending value is the story.

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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