- Ruth Kogan
- 2 days ago
- 6 min read
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While it might seem intimidating at first glance, learning your way around an Excel spreadsheet is one of the most powerful skills you can add to your toolkit. But before you start writing complex formulas or building colorful charts, you need to understand the foundation of this document type and the Excel file itself.
This guide will break down exactly what an Excel file is, explore the different formats available and help you choose the right one for your specific project so you can work smarter, not harder.
TL;DR: Excel file types cheat sheet
Here's a quick summary of the file extensions you’ll see most often and when to use them.
Ffile extensionf | Name | Best used for | Why it matters |
.xlsx | Excel Workbook | Everyday use | The standard format. Safe, compact, and compatible with everything modern. |
.xlsm | Macro-Enabled Workbook | Automation | Allows you to run saved code (macros) to automate repetitive tasks. |
.xlsb | Binary Workbook | Large datasets | Compresses massive files so they open and save faster. |
.csv | Comma Separated Values | Data transfer | A plain text version used to move data between different apps (like email tools). |
.xltx | Excel Template | Blueprints | Saves a layout as a starting point for future files without overwriting the original. |
.xls | Excel 97-2003 Workbook | Legacy software | Only needed if you are working with very old versions of Excel. |
What is an Excel file?
An Excel file is essentially a digital workbook created by Microsoft Excel. Think of it like a physical binder. Inside this binder (the file), you have individual sheets of paper (worksheets).
Each worksheet is a giant grid made up of columns (lettered A, B, C...) and rows (numbered 1, 2, 3...). The magic happens where a column and row meet, a cell. A cell can hold text, numbers, dates or formulas.
Unlike a simple text document, an Excel file is dynamic. If you change a number in one cell, it can automatically update totals, charts and summaries across the entire workbook. This ability to link data together is why Excel is used for everything from tracking inventory in a small boutique to managing complex project timelines for creative agencies. It transforms static data into a living, breathing plan.
Learn more: What is a Word doc?
The 6 main Excel file types explained
Microsoft Excel has been around for decades, and over time, it has developed different file formats to handle specific jobs. Choosing the right one means your data stays safe, your formulas keep working and your file size doesn't balloon out of control.
01. The standard: Excel workbook (.xlsx)
This is the default Excel file type. If you open Excel today and click "Save," this is the format it will choose automatically. The .xlsx format was introduced in 2007 to replace the older versions then available and it brought some major improvements.
The x at the end stands for XML (Extensible Markup Language). Without getting too technical, this means the file is structured in a way that is much lighter and harder to corrupt. It essentially zips your data into a smaller package every time you save.
When to use it:
Daily tasks: Creating budgets, content calendars, or client lists.
Sharing: Sending a file to a teammate or client.
General storage: Keeping records that don't require complex automation code.
Practical tip: If you aren't sure which format to pick, always go with .xlsx. It's the safest bet for 99% of projects.
02. The automator: Excel macro-enabled workbook (.xlsm)
Have you ever wished Excel could do your work for you? With Macros, it can. A Macro is a small computer program (script) written in a language called VBA (Visual Basic for Applications) that runs inside Excel. You can record a Macro to do repetitive tasks, like formatting a report or cleaning up data, with a single click.
However, standard .xlsx files strip out these codes for security reasons (viruses love to hide in Macros). To save a file with these automated scripts, you must use the .xlsm format. The m stands for Macro.
When to use it:
Recurring reports: If you have to reformat the same sales report every Monday morning.
Complex tools: Building a custom calculator or interactive dashboard for your business.
Practical tip: Be careful when opening .xlsm files sent by strangers. Because they contain code, they can be a security risk. Only enable content if you trust the sender.
03. The speedster: Excel binary workbook (.xlsb)
If you're working with massive amounts of data—we’re talking tens of thousands of rows—you might notice your .xlsx file starts to get slow. Opening it takes forever and calculating formulas freezes your computer.
Enter the .xlsb file. The "b" stands for Binary. Instead of using the XML structure, it saves data in binary (zeros and ones). This is much faster for the computer to read and write. It can shrink a huge file size significantly, making it easier to manage.
When to use it:
Big Data: Analyzing years of transaction history or massive inventory logs.
Performance issues: If your current spreadsheet takes more than 30 seconds to open.
Practical tip: While fast, .xlsb is less compatible with other non-Microsoft spreadsheet tools. Stick to this only when speed is absolutely critical.
04. The translator: Comma Separated Values (.csv)
Technically, a CSV isn't purely an Excel file—it’s a text file. But Excel is the most common tool used to open and edit them. In a CSV file, there are no grids, no formulas and no bold text. It's just raw data separated by commas.
Why would you want a file with no formatting? Because it's the universal language of data. Almost every piece of software in the world can read a CSV. If you want to export your contacts from Gmail and upload them to a CRM, or move products from one ecommerce platform to another, you'll use a CSV.
When to use it:
Import/export: Moving customer lists into email marketing software (like Wix Email Marketing).
Backups: Saving a raw version of your data that can be opened by any program.
Practical tip: Remember that CSVs do not save formulas or formatting. If you highlight a row in yellow and save it as a CSV, that yellow highlight (and your formulas) will be gone the next time you open it. Always keep a master .xlsx version if you need to preserve the look and logic of your sheet.
05. The blueprint: Excel template (.xltx)
Do you find yourself creating the same spreadsheet over and over again? Maybe it’s a monthly invoice or a project timeline. Instead of opening last month's file, deleting the old numbers, and clicking "Save As," you should create a template.
An .xltx file is a blueprint. When you open it, Excel doesn't open the original file; it creates a brand new copy based on that file. This means you can never accidentally overwrite your master template.
When to use it:
Branding: Creating a standard invoice with your logo and colors already in place.
Standardization: Making sure your whole team uses the same format for their weekly status reports.
Practical tip: Spend time setting up your template perfectly once—fonts, headers, formulas—and you will save hours of setup time in the future.
06. The legacy: Excel 97-2003 workbook (.xls)
This is the dinosaur of the bunch. Before 2007, .xls was the standard. You will recognize these files by their older, blockier icons.
Today, there is very little reason to use this format. It is larger, more prone to corruption, and holds less data (it caps out at 65,536 rows, whereas modern Excel handles over 1 million). The only reason to save a file as .xls is if you are sending it to someone who is using a computer that hasn't been updated in 20 years.
When to use it:
Never: Unless you are forced to by very old legacy software.
Learn more:
What is an Excel File FAQ
Can I open an Excel file without having Microsoft Excel installed?
There are several ways to view and edit these files without buying the software. You can upload the file to Google Sheets, which allows you to edit it in your browser. Microsoft also offers a free online version of Excel (Excel for the Web) that handles basic tasks perfectly.
Is an Excel file secure?
An Excel file is only as secure as where you store it. While you can add a password to open a workbook (Go to File > Info > Protect Workbook), this is not military-grade encryption. If you have highly sensitive customer data, avoid emailing Excel files back and forth. Instead, store them in a secure cloud environment where you can control who has access to the link.
What happens if I save a macro file (.xlsm) as a standard file (.xlsx)?
If you do this, Excel will give you a warning. If you proceed, the file will be saved, but all your macros (the VBA code) will be stripped out and deleted permanently. The data and formatting will remain, but the automation buttons will stop working. Always check the file type before saving if you have written custom scripts.
How do I reduce the size of my Excel file?
If your workbook is too big to email, try saving it as a Binary Workbook (.xlsb). You can also look for unused formatting—sometimes people accidentally format empty rows all the way down to the bottom of the sheet, which bloats the file size. Deleting those empty, formatted rows can drastically shrink the file.
