Excel vs Google Sheets for financial modeling

The recommendation, up front

• Raising money, or a model anyone will audit: Excel. Diligence expects it and the auditing tools are not optional at that point.
• Collaborative budgeting across departments: Google Sheets. Simultaneous entry and comment threads beat emailing versions around.
• Both: collect inputs in Sheets, consolidate and run scenarios in Excel. This is what most finance teams we work with actually do.

Where the difference actually bites

The auditing gap is the real one

Trace Precedents is not a convenience. On an inherited model, following what feeds a number is the difference between an afternoon and a week, and Google Sheets has no equivalent. Neither does it have Evaluate Formula, which steps through a nested expression one operation at a time.

If a model will be handed to someone else — a CFO, an acquirer, a diligence team — build it where it can be interrogated. This is the argument that overrides collaboration preferences.

What Sheets gives you instead

Version history that records who changed which cell and when, which Excel does not match outside a properly configured SharePoint. For a model several people edit, that audit trail is worth something real.

Modeling conventions that matter in both

• One input cell per assumption, formatted distinctly, never repeated inside formulas. A growth rate written into thirty cells is thirty edits and one missed.
• Left to right, top to bottom. Calculations should flow in one direction. Backwards references are where circularity bugs breed.
• Balance checks that shout. A row that computes assets minus liabilities minus equity and turns red when non-zero catches errors long before a reviewer does.
• One formula per row. If a row is not internally consistent across all its periods, something has been pasted over. Consistency also makes an error visible at a glance.
• Scenario switch, not scenario copies. A single CHOOSE-driven case selector beats three duplicate tabs that drift apart.

Migrating between them

Sheets to Excel usually survives. Excel to Sheets is where things break, and predictably: Data Tables do not convert, Power Query and Power Pivot have no counterpart, most VBA is lost, some array formulas need reworking and heavy conditional formatting degrades.

Budget a rebuild of the calculation layer rather than expecting an import, and test the balance checks first — they will tell you immediately whether the conversion preserved the logic.