You are almost there.
Got to Format=>Number=>Custom and set up the format as mm:ss.00
You can then enter a time of 1 min 15.83 secs as 1:15.83 and that is how it will display.
Internally, Excel will still store it as fractions of a day and in the formula bar is will show as 00:01:16
Any calculations carried out, will add (or subtract) the decimal seconds you have entered correctly.