Seven signs your spreadsheets have stopped working

A spreadsheet is an excellent tool and a poor system of record. The difference shows up slowly, which is the problem: nothing breaks on a particular Tuesday. The file keeps opening, the totals keep totalling, and the number at the bottom keeps being used for decisions long after it stopped being true.

Seven symptoms, roughly in the order businesses hit them.

1. Someone asks what the stock is worth and the answer takes a day

Not because the data is missing, but because it is in four files that disagree, and somebody has to decide which one is right. If the answer to a routine question needs an investigation, the question will stop being asked, which is worse.

2. Two people have the same file and neither knows which is current

The giveaway is a filename with a date in it, or the word final. Version names are a symptom of a missing system: when there is one record, there is nothing to version.

3. The sales figure and the bank do not reconcile, and nobody knows where it diverged

A spreadsheet records outcomes, not events. It can tell you the total was different last week, but not which transaction changed, who changed it or when. Without that trail, reconciliation becomes archaeology, and the usual resolution is an adjusting entry that hides the cause.

4. Prices depend on who answers the phone

Discounts live in a sales person head or a private sheet, so the same customer gets two prices in a month and nobody can say which was correct. This is the point where margin stops being measurable, because the price was never a rule - it was a decision, repeated inconsistently.

5. Month end involves copying numbers between files

Every copy is a chance to paste into the wrong column, and the error is invisible because the total still looks plausible. If closing the month is a sequence of copies, the close is a set of transcription risks, and it gets longer every year.

6. You cannot answer a question about last year

The file was overwritten, or the formula was changed, so the number you reported in March cannot be reproduced in November. For tax and audit purposes, being unable to reproduce a figure is a bigger problem than the figure being wrong.

7. Everything depends on one person

One person understands the workbook, the lookups and the exceptions. That is a real risk even when they are excellent, and it only becomes visible when they are on leave.

What actually changes

Moving off spreadsheets is not about losing flexibility. The specific thing that changes is that an event - a sale, a receipt, a stock movement - is recorded once and everything else is derived from it. The stock report and the inventory account read the same movements. The customer statement and the receivables balance read the same invoices. Nobody reconciles two sources, because there is one.

Keep the spreadsheets for what they are good at: modelling, scenarios, one-off analysis. Export from the system, work on the copy, throw it away. What should not live in a spreadsheet is the record itself.