From the user guide:
This software is supplied free of charge to users who will submit 2017/18 ILR data to the Skills Funding Agency in the funding year but who do not have access to a data management system. This application will not be supported where data sets exceed 500 learner records.
This tool was developed by the ESFA for those Training Providers who have a small cohort of learners and where the cost of a Management Information System that could produce an ILR file was not cost effective.
As the tool does not validate data or provide reporting for Programme management the ESFA have set the cohort size to 500 but in practice this can be exceeded but it does slow it down.
If you have over 500 learners you should consider the beifits of a MI system for management of your learners.