Why Excel Isn’t an ERP System, and When Does It Start Costing You Money

An ERP connects what Excel keeps apart 

Excel can do a lot. One sheet holds over a million rows. With Microsoft 365, several people work in one file at the same time. For calculations and reports, Excel is often the fastest way.

The problem comes later. A managing director from B2B food wholesale describes the moment it tips over: "Too many people are working in Excel and transferring data. Then you get version issues on Dropbox. And suddenly you have no idea what's right anymore. Then you have to burn hellish amounts of time again."

An ERP solves a different task. It keeps all your business data in one place and connects it. When an order comes in from the shop, stock goes down. The delivery note and invoice are created, and accounting gets the document.

The difference lies in the connection: in an ERP, a change arrives everywhere it's needed.

When is Excel no longer enough? The number of orders rarely decides 

There's a rule of thumb floating around online: Excel is fine up to about 500 or 1,000 orders a month. Our conversations paint a different picture.

We analyzed initial conversations from 2025 and 2026 in which retailers ran their business mainly with Excel:

The range runs from 50 to 4,500 orders a month. What matters is how many places a change has to reach.

Excel gets expensive in these 6 places 

1. You sell through more than one channel 

You can run a single shop with Excel. Add a marketplace, a store checkout or a pop-up store, and you have multiple inventories. Excel doesn't know what you just sold on Amazon.

Meine Orangerie knows the feeling. Managing director Christoph Lindlar says: "Anyone who manages purchases in Excel and sales in the shop or in the Amazon Sellerboard can't reconcile the data anymore as revenue grows." The result: customers ordered plants on Amazon that were long out of stock.

2. A second person works in the same file 

As long as one person maintains the spreadsheet, they know what's right. With the second person come copies, interim versions and files like "Stock_final_v3". Nobody knows which version counts anymore.

Technically, several people can work in an Excel file at the same time. But there's no rule about who may change what and which value ultimately counts.

3. B2B orders arrive by email 

A catering supplies retailer receives more than half of its 300 monthly orders by email. Someone retypes every single one. Another retailer with B2B customers told us: "One order can easily take half an hour."

At 16 orders a day, that's a full working day.

4. You have to prove batches, best-before dates or serial numbers 

For food, cosmetics, medical devices or organic goods, a stock level isn't enough. You have to be able to show which batch went to which customer. In Excel, that means assigning every delivery by hand. Two of the businesses in the table above came to us for exactly that reason.

5. A trading partner demands an interface 

A young food producer with one employee won a major customer in grocery retail. The condition: an EDI connection within 6 months, meaning electronic data exchange for orders and invoices. That's impossible with Excel. Here, a contract dictates when to switch.

6. Accounting and tax run through exports 

Many businesses that work with Excel export CSV files, rework them and send them to their tax advisor. That costs time and has a legal side.

The GoBD (German principles for proper bookkeeping) require that accounting documents can't be altered unnoticed. An Excel file on a drive generally doesn't meet that, because you can simply overwrite the values.

Then there's e-invoicing. From January 1, 2027, you have to send invoices to business customers in a structured format if your prior-year revenue exceeds €800,000. From 2028, that applies to all B2B businesses. A PDF invoice from Excel then no longer counts.

A self-built Excel ERP only lasts for a while 

Some businesses go a step further. They build their own little ERP with formulas and macros. On forums like Reddit, you'll find plenty of projects like this. In our conversations, we see two typical problems:

• The knowledge sits with one person. A furniture retailer with 4,500 orders a month runs orders and production every day with Excel and VBA scripts. If the person who built the scripts drops out, orders and production come to a standstill.

• Every extension is its own project. A dietary supplement manufacturer built its own Excel solution for forecasting and production. It covers their special cases. For a new channel, they still have to rebuild it themselves.

Without macros like these, every report stays manual work. A team lead told us what her monthly reporting has looked like for years: "Since 2018, I go in every month and write down how much of which product was sold. It's no fun."

8 questions show how close you are to the tipping point 

Answer each question with yes or no:

1. Do you maintain inventory in more than one place?

2. Do more than two people work in the same spreadsheets?

3. Did you sell an item last month that was no longer in stock?

4. Do you retype orders from emails or marketplaces by hand?

5. Do you write invoices in a different program than the orders?

6. Do you export data for your tax advisor and rework it?

7. Does only one person know how the most important spreadsheet works?

8. Are you planning a new channel or B2B customers in the next 12 months?

Three or more yes answers: Excel is already costing you time and revenue. Calculate how many hours a week go into reconciliation and corrections.

One or two yes answers: You're close to the tipping point. Prepare your data now, and the switch will be easier later.

No yes answers: Excel is enough for your business. Check the questions again when you add a channel.

For some businesses, Excel is perfectly fine 

Not every business needs an ERP. If you work alone, sell through one shop and have few orders a month, Excel and an invoicing program are a good solution.

Many shop systems also come with simple inventory management. A fashion label with 400 orders a month deliberately decided against an ERP after our conversation. It keeps working with its shop system because that's enough for its size. That remains a good decision as long as no second point of sale is added.

Our conversations show a lower limit: below 100 orders a month, many businesses find an ERP too big.

How to get out of Excel 

Before the switch, many retailers worry more about it than about the spreadsheets themselves. With a clear sequence, it becomes manageable:

1. Clean up your item master. One spreadsheet with all items, unique item numbers and current stock levels. Delete duplicate entries beforehand.

2. Collect customers and suppliers in one list each. Leave out old contacts with no revenue.

3. Import the data via CSV. Your Excel spreadsheets serve as the template. That's how Kinga Mathe brought its item data into Xentral.

4. Connect your most important channel first. Further channels follow once the processes are in place.

5. Test with real orders. Run Excel and the ERP in parallel for a short time and compare stock levels.

Excel doesn't disappear entirely afterward. It stays useful for reports and data exchange. It's just no longer where your business runs.

What it looks like after the switch 

At Sternglas, the team saves 20 hours a week. CEO Hennig Haberkamp says: "Many spreadsheets don't even exist anymore. Now there's an item master in Xentral with all the important information. You don't have to hunt for anything manually anymore."

At Kinga Mathe, Excel spreadsheets and manual picking were enough as long as only a handful of orders came in per week. Then the business grew: "When the first errors crept in, we realized we needed an ERP system." Today, the team saves 50% of its shipping time.

5. A trading partner demands an interface 

A young food producer with one employee won a major customer in grocery retail. The condition: an EDI connection within 6 months, meaning electronic data exchange for orders and invoices. That's impossible with Excel. Here, a contract dictates when to switch.

6. Accounting and tax run through exports 

Many businesses that work with Excel export CSV files, rework them and send them to their tax advisor. That costs time and has a legal side.

The GoBD (German principles for proper bookkeeping) require that accounting documents can't be altered unnoticed. An Excel file on a drive generally doesn't meet that, because you can simply overwrite the values.

Then there's e-invoicing. From January 1, 2027, you have to send invoices to business customers in a structured format if your prior-year revenue exceeds €800,000. From 2028, that applies to all B2B businesses. A PDF invoice from Excel then no longer counts.

A self-built Excel ERP only lasts for a while 

Some businesses go a step further. They build their own little ERP with formulas and macros. On forums like Reddit, you'll find plenty of projects like this. In our conversations, we see two typical problems:

• The knowledge sits with one person. A furniture retailer with 4,500 orders a month runs orders and production every day with Excel and VBA scripts. If the person who built the scripts drops out, orders and production come to a standstill.

• Every extension is its own project. A dietary supplement manufacturer built its own Excel solution for forecasting and production. It covers their special cases. For a new channel, they still have to rebuild it themselves.

Without macros like these, every report stays manual work. A team lead told us what her monthly reporting has looked like for years: "Since 2018, I go in every month and write down how much of which product was sold. It's no fun."

8 questions show how close you are to the tipping point 

Answer each question with yes or no:

1. Do you maintain inventory in more than one place?

2. Do more than two people work in the same spreadsheets?

3. Did you sell an item last month that was no longer in stock?

4. Do you retype orders from emails or marketplaces by hand?

5. Do you write invoices in a different program than the orders?

6. Do you export data for your tax advisor and rework it?

7. Does only one person know how the most important spreadsheet works?

8. Are you planning a new channel or B2B customers in the next 12 months?

Three or more yes answers: Excel is already costing you time and revenue. Calculate how many hours a week go into reconciliation and corrections.

One or two yes answers: You're close to the tipping point. Prepare your data now, and the switch will be easier later.

No yes answers: Excel is enough for your business. Check the questions again when you add a channel.

For some businesses, Excel is perfectly fine 

Not every business needs an ERP. If you work alone, sell through one shop and have few orders a month, Excel and an invoicing program are a good solution.

Many shop systems also come with simple inventory management. A fashion label with 400 orders a month deliberately decided against an ERP after our conversation. It keeps working with its shop system because that's enough for its size. That remains a good decision as long as no second point of sale is added.

Our conversations show a lower limit: below 100 orders a month, many businesses find an ERP too big.

How to get out of Excel 

Before the switch, many retailers worry more about it than about the spreadsheets themselves. With a clear sequence, it becomes manageable:

1. Clean up your item master. One spreadsheet with all items, unique item numbers and current stock levels. Delete duplicate entries beforehand.

2. Collect customers and suppliers in one list each. Leave out old contacts with no revenue.

3. Import the data via CSV. Your Excel spreadsheets serve as the template. That's how Kinga Mathe brought its item data into Xentral.

4. Connect your most important channel first. Further channels follow once the processes are in place.

5. Test with real orders. Run Excel and the ERP in parallel for a short time and compare stock levels.

Excel doesn't disappear entirely afterward. It stays useful for reports and data exchange. It's just no longer where your business runs.

What it looks like after the switch 

At Sternglas, the team saves 20 hours a week. CEO Hennig Haberkamp says: "Many spreadsheets don't even exist anymore. Now there's an item master in Xentral with all the important information. You don't have to hunt for anything manually anymore."

At Kinga Mathe, Excel spreadsheets and manual picking were enough as long as only a handful of orders came in per week. Then the business grew: "When the first errors crept in, we realized we needed an ERP system." Today, the team saves 50% of its shipping time.