When a spreadsheet is the right answer and when it is not

I sell spreadsheets, so treat this with appropriate suspicion. I still think most people reach for software too early and a few reach for it far too late.

Where a spreadsheet wins

When the thing you are doing is arithmetic you want to see. A quote build up, a break even, a comparison of four properties. Software hides the calculation behind a result, and when the result looks wrong you have no way in. In a sheet you can follow the number back to where it came from and argue with it.

When the process is yours rather than standard. Every small business does something slightly odd that no product accounts for, and a spreadsheet bends. Software makes you do it the way the product manager imagined, or pay for a plan that allows custom fields.

When there is one of you. Most business software is priced and designed around a team collaborating. Alone, you are paying for coordination you do not need.

Where a spreadsheet loses, badly

Anything with more than one person editing at once and real consequences to getting it wrong. Two people in a stock sheet on a Friday afternoon is how you end up with numbers nobody trusts by Monday.

Anything that has to notify. A sheet cannot chase an unpaid invoice or tell you a payment is due tomorrow. If the whole value is in the reminder, buy the thing that reminds.

Anything legally binding or externally audited. Payroll and tax filing are not places to be clever.

And volume. There is a size where a sheet stops being slow and starts being fragile, and it always arrives sooner than expected.

The failure mode I see most

Not people using a spreadsheet too long. It is people buying software to solve a problem they have not defined, then keeping a spreadsheet alongside it because the software does not quite fit, and now maintaining both.

If you are running a shadow spreadsheet next to a paid tool, one of the two is wrong and it is worth deciding which.

An honest test

Write down what you actually need it to do. If most of it is calculate and record, a sheet is probably fine and you will have it working this afternoon. If most of it is notify, collaborate or comply, buy the software and do not feel clever about saving forty a month.