I want to upload monthly .xls sheets for my clients to download. It has come to my attention that heroku doesn't allow writing files. I don't want to use paperclip or S3 because the data is a tad sensitive (and I want the upcoming ones to overwrite the old ones).
Is paperclip\S3 my only option or is there a way to allow heroku to store some files?
Yes, it is possible. Read the details here devcenter.heroku.com/articles/dynos#ephemeral-filesystem. Note that every time you deploy, or switch dynos you will lose the files. Maybe you should look into other hosting options.