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How to Edit Waterfall Chart in Excel

Cody Schneider••8 min read

Creating a waterfall chart in Excel is a great way to show how a starting value is affected by a series of positive and negative changes. But a default chart rarely tells the full story. This tutorial will walk you through exactly how to create and edit a waterfall chart in Excel, giving you the control to format it for maximum clarity and impact.

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What is a Waterfall Chart, Anyway?

A waterfall chart (sometimes called a bridge chart) is a data visualization that shows a running total as values are added or subtracted. It's perfect for understanding the cumulative effect of sequential positive and negative values. The "floating" columns make it easy to see the individual contributions that lead from a starting point to an ending point.

You can use a waterfall chart for many scenarios, including:

  • Financial Performance: Breaking down net income by showing how revenues and various costs contribute to the final profit or loss.
  • Inventory Analysis: Showing changes in inventory levels over a period, accounting for purchases, sales, and returns.
  • Sales Pipeline: Visualizing how many leads move from one stage to the next, from initial contact to a closed deal.
  • Project Budgets: Tracking how specific budget items add up to a total project cost.

How to Create a Basic Waterfall Chart in Excel

Before you can edit a waterfall chart, you need to create one. Excel has a built-in chart type for this, making the initial setup straightforward. The key lies in structuring your data correctly.

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Step 1: Prepare Your Data

Organize your data in two columns. The first column should contain the labels for each category, and the second should contain the corresponding values. Use positive numbers for increases (like revenue or incoming inventory) and negative numbers for decreases (like expenses or cost of goods sold).

It's also crucial to include rows for your starting and ending totals. For these total values, you can either calculate them manually or use a simple formula like =SUM().

Here's an example dataset for a simple profit and loss statement:

Step 2: Insert the Waterfall Chart

Once your data is ready, creating the chart is just a few clicks away.

  1. Highlight your entire data range, including the headers and the cells for your totals.
  2. Go to the Insert tab on the Excel ribbon.
  3. In the Charts group, click the "Insert Waterfall, Funnel, Stock, Surface, or Radar Chart" icon.
  4. Select the Waterfall chart option.

Excel will instantly generate a waterfall chart. However, you'll immediately notice it probably doesn't look right - your totals are likely displayed as floating columns instead of grounded pillars. This is where editing comes in.

Essential Edits to Format Your Waterfall Chart

Your default chart is a starting point, not a finished product. Let's make the crucial edits needed to make it accurate and easy to read.

Set Your Start, End, and Subtotal Bars

This is the most important edit you'll make. Most waterfall charts begin and end with columns that represent totals, grounded on the zero axis. To fix this, you need to tell Excel which bars are totals.

  1. Double-click a bar you want to set as a total (e.g., "Starting Revenue"). This will select only a single bar, not the whole series. You will see the “Format Data Point” pane on the right.
  2. If the Format Data Point pane doesn't appear, right-click on that single bar and choose "Format Data Point."
  3. In the pane, check the box for "Set as total." Excel will immediately drop the bar down to the baseline.
  4. Repeat this process for any other total or subtotal columns, such as "Gross Revenue" and your "Net Income" total.

After setting your totals, your chart will instantly provide a much clearer narrative, showing the starting point, the step-by-step changes, and the final result.

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Customize Chart Colors for Better Context

By default, Excel uses a standard color for increases and another for decreases. While functional, you can make this more intuitive.

  1. Double-click on one of the bars representing an increase. All 'increase' bars should be selected.
  2. In the Format Data Series pane on the right, go to the Fill & Line tab (the paint bucket icon).
  3. Under Fill, choose a new color. Green is a universally understood color for positive change.
  4. Now, double-click on a bar representing a decrease.
  5. In the same Fill & Line tab, choose a different color. Red is a common choice for negative change or costs.
  6. You can also change the color for the total bars in the same way to make them stand out. A neutral blue or gray often works well.

Show or Hide Connector Lines

Connector lines are the thin gray lines that connect the end of one column to the beginning of the next, helping the eye follow the flow. By default, they are on, but you may want to remove them for a cleaner look.

  1. Right-click any of the bars to select the entire data series.
  2. Choose "Format Data Series...".
  3. Under "Series Options" (the bar chart icon), you'll see a checkbox for "Show connector lines."
  4. Simply uncheck this box to hide them, or check it to bring them back.

Format Data Labels

Data labels display the value of each bar directly on the chart, which can make it much easier to read without having to constantly look at the vertical axis.

  1. Right-click on your bars and select "Add Data Labels."
  2. The values will appear on the chart. To customize them, right-click on any of the new labels and choose "Format Data Labels..."
  3. In the formatting pane, you can change the position (e.g., Inside End, Center), number format (e.g., Currency, Percentage), font size, and color. For currency values, it's often helpful to set the Number Category to "Currency" and adjust the decimal places.

Advanced Waterfall Chart Edits in Excel

Once you've mastered the basics, you can apply a few more touches to make your waterfall chart even more professional and effective.

Adjusting the Gap Width

The gap width controls the space between the columns. Decreasing this can make your bars thicker and more substantial.

  1. Right-click any of the bars and choose "Format Data Series."
  2. Under "Series Options," look for the Gap Width slider.
  3. Slide it to the left to decrease the space between columns (a value around 50% often looks good) or to the right to increase it.

Customizing the Axes and Gridlines

Improving the readability of your axes can have a big impact.

  • Vertical (Value) Axis: Click on the vertical axis to select it, then right-click and choose "Format Axis." Here, you can change the minimum and maximum bounds, set major and minor units, and format large numbers to be more readable (e.g., display in thousands or millions).
  • Horizontal (Category) Axis: Click on the horizontal axis labels. You can format the font size and style. If your labels are too long, you can use the Alignment options in the Format Axis pane to rotate them.
  • Gridlines: Most charts are cleaner with gridlines removed or made less prominent. Click on a gridline to select them, then press the 'Delete' key to remove them. Alternatively, you can format them to be a lighter color, like a faint gray.

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Adding a Clear Chart Title

Never leave the default title like "Chart Title." Double-click the textbox and give your chart a descriptive title that tells the viewer exactly what they are looking at. For example, "Q3 2023 Profit and Loss Breakdown" is much more useful than just "P&L."

Common Waterfall Chart Problems and Fixes

  • Problem: My total columns look like just another increase/decrease. Fix: This is the most common issue. You forgot to set them as totals. Go back, double-click only that specific bar, right-click, choose "Format Data Point," and check the "Set as total" box.
  • Problem: The chart colors don't make sense. Fix: Excel's standard colors aren't always intuitive. Manually format the data series. Double-click on an 'increase' bar, set a color (like green), then double-click a 'decrease' bar, and set another color (like red).
  • Problem: Reading the chart is difficult because the numbers are too big. Fix: Format the vertical axis. Right-click the axis and go to "Format Axis." Under "Display Units," you can choose Thousands, Millions, etc., to make the axis labels cleaner. Also, adding data labels directly to the bars can eliminate the need to reference the axis at all.

Final Thoughts

Mastering a few simple formatting and editing techniques in Excel transforms a basic waterfall chart into a powerful tool for visual storytelling. By ensuring your totals are set correctly, applying logical colors, and formatting labels for clarity, you can provide an at-a-glance understanding of complex data that spreadsheets alone can't offer.

Of course, building and fine-tuning these charts in spreadsheets often involves repetitive manual steps, especially when your data updates. This is why we built our tool, Graphed, to help. After connecting your data sources like Google Analytics, Shopify, or even a Google Sheet in a few clicks, you can ask for a chart using plain English - for example, "Create a waterfall chart showing my revenue breakdown from Salesforce this quarter." We automatically generate a live, interactive visualization for you, skipping the manual setup and formatting so you can get straight to the insights.

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