Copilot for Excel: Create Custom Skills

Key insights

• Copilot skills — Structured, reusable instructions that tell Excel Copilot how to complete repeatable tasks.
  They produce consistent, reviewable results instead of requiring new prompts each time.
• Benefits — Save time on repetitive analysis, reduce manual errors, and standardize reporting across teams.
  They make advanced Excel processes easier for non-experts to run reliably.
• Custom skills and SKILL.md — You build a custom skill by placing a SKILL.md file in its own folder inside a OneDrive "skills" folder.
  The markdown file can include metadata and, for advanced actions, reference Office.js code.
• How to create — Open the Copilot pane in Excel, go to Settings → Manage skills → Custom skills, and create the OneDrive skills folder.
  Then add a separate folder per skill and include a SKILL.md file to define each workflow.
• Requirements — You need Excel with Copilot access and OneDrive to store skills; use a well-structured SKILL.md and add Office.js for more complex workbook actions.
  Microsoft rolled custom skills out first to Insiders and then to broader Excel channels.
• Best use cases and platform changes — Ideal for finance, reporting, data cleansing, forecasting, and recurring management reports that need consistent steps.
  App Skills entry points are being phased out, so Copilot skills and Copilot Chat/Agent Mode will host most workflows going forward.

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Ami Diamond [MVP], a male Microsoft-focused creator, recently published a YouTube video that walks viewers through building reusable AI workflows inside Excel. In the video, he demonstrates how to create and deploy Copilot skills by placing a SKILL.md file in a OneDrive skills folder so that Copilot can detect and run them inside workbooks. Moreover, he highlights new finance-focused sample skills that Microsoft has started rolling out to help with tasks like discounted cash flows and monthly reporting. Consequently, the video frames Copilot skills as a practical way to standardize repeatable work and cut down manual effort.

What Ami Diamond Demonstrates

First, Ami shows a clear, step-by-step creation process that begins in the Excel Copilot pane and ends with a working custom skill available to teammates. He walks through creating a dedicated skills folder in OneDrive, adding a unique skill folder, and saving a properly formatted SKILL.md file inside that folder so Copilot can recognize it. Then, he runs sample scenarios such as variance analysis and monthly reporting to show how a skill applies structured logic rather than improvising on each request. As a result, viewers can see both the setup and the predictable output that makes reviews and audits easier.

Next, Ami demonstrates how to extend a skill with optional scripting, noting that more advanced workbook actions can use Office.js for deeper automation. He also shows Copilot detecting custom skills first in the Insiders channel and explains that Microsoft plans broader availability across Excel for web, Windows, and Mac. Additionally, he emphasizes practical examples over theoretical descriptions, which helps teams imagine the immediate value. Therefore, the video acts as both a how-to guide and a catalog of real-world possibilities.

How Custom Copilot Skills Work

At its core, a Copilot skill is a structured instruction set written in markdown that tells Copilot how to complete a recurring Excel task consistently. The skill must live in its own folder and include a front-matter block so Copilot can identify it as an Excel skill, which allows the assistant to use the provided workflow instead of starting from scratch. Moreover, skills can include metadata tags such as an excel tag, and they can call optional scripts when a task demands workbook manipulation beyond simple instructions. Consequently, this format supports repeatability and clearer output formatting, both of which help build trust in automated results.

In contrast to one-off prompts, skills encode a team’s best practices into reusable artifacts that anyone with access can invoke from Excel’s interface. This approach reduces the need for repeated prompt-writing and helps ensure that a finance model or cleansing routine follows the same steps every time. However, the system also requires discipline in naming, versioning, and documentation so teams know which skill to use for which purpose. Therefore, adopting skills changes how organizations manage process knowledge and technical assets.

Benefits and Real-World Uses

Ami highlights practical benefits such as saving time on repetitive analysis, standardizing calculations, reducing manual errors, and making advanced workflows accessible to non-experts. For example, he shows how teams can automate sales performance summaries, financial reporting templates, data cleansing routines, and forecasting steps so that users get consistent outputs fast. Moreover, turning organizational know-how into reusable skills helps scale expertise across departments without requiring everyone to master complex spreadsheets. As a result, teams can focus more on interpretation and decision-making rather than repetitive assembly work.

Furthermore, the video stresses that these skills make it easier to hand off work between teammates because the steps and expected outputs stay the same. This predictability also supports audit trails and internal controls, which matters most in finance and compliance-heavy functions. At the same time, the most valuable scenarios are often those that combine clear structure with occasional human review, so skills work best when they complement human judgement. Thus, organizations should view skills as a productivity multiplier rather than a replacement for oversight.

Tradeoffs and Governance Challenges

Despite clear advantages, Ami also touches on tradeoffs related to access, governance, and maintenance when teams adopt custom skills at scale. For instance, storing skills in OneDrive improves accessibility, but it also raises questions about permissions, version control, and who can update a shared process. Moreover, using Office.js scripts adds power but increases complexity, requiring review for security and ongoing maintenance when Excel APIs or organizational needs change. Therefore, organizations must balance the desire for rapid automation with the need for controls and oversight.

Another important change Ami notes is that Microsoft is consolidating entry points, with legacy App Skills being phased out and some scenarios moving into Copilot Chat and Agent Mode. While migration can simplify the landscape, it can also create short-term disruption for teams that depend on older workflows or advanced analysis modes. Consequently, IT and business owners must plan migrations and test critical reports thoroughly before decommissioning older solutions. Ultimately, careful governance and a staged rollout reduce these risks while enabling broader adoption.

Practical Steps to Get Started

To follow Ami’s guidance, you need Excel with Copilot access, a OneDrive account for skill storage, and a skills folder that holds a properly structured SKILL.md file for each skill. Then, open the Copilot pane, go to settings, and choose the manage skills option to point Excel at your custom folder so Copilot can discover and load your skills. Start small by automating a single, well-documented task such as a monthly report or a standard reconciliation, and test results with a pilot group. In this way, you can validate value, adjust instructions, and build governance gradually.

Finally, Ami encourages viewers to think about the first Excel task they would automate and to involve IT early for security and deployment planning. By iterating on simple skills and adding complexity only when needed, teams can balance speed and safety while building a reusable library of processes. Moreover, this approach lets organizations capture institutional knowledge and make it widely useful without losing control. Consequently, Ami’s video serves as a practical starting point for teams ready to make Excel work smarter with Copilot skills.

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