Is bookkeeping necessary for a micro entrepreneur?

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I’m wondering if bookkeeping is really necessary for my business.

At the moment, I have a cash flow which I’m very comfortable with. I have this filled out with the expected amounts for each month. I have one bank account for my ME, and I can simply go through the monthly statement and put in the actual numbers and see where I’m at in terms of the balance.

Alongside this I have an invoice log to keep track of any payments I’m due.

At the moment the business is not really operative - I’m working on the back-office stuff (like this) and training in the skill I will be ‘selling’ via my Micro Entrepreneur (coaching) and plan to start working with clients in September this year.

The income and expenditure are really simple at this stage and will stay that way for the foreseeable future - there will be a monthly payment to me, some software and subscription payments (web domain, zoom etc) and a few small bits - office stationary, travel etc.

There are no loans, assets etc for the company. I dont really plan to expand it much - I just want to grow it to the point where I have enough clients to earn what I need to live on each month, plus a bit extra for leeway, and leave it there. I dont want to employ anyone else if I can avoid it. If I do (ie an accountant, or web designer etc) it will be on a 1 off, freelance basis.

I dont really have a clear understanding of the difference between bookkeeping and just having some records I keep manually on excel. My concern with starting to use a bookkeeping platform is that I will not really understand it or the company finances (this was the case with my last, much bigger, company in the UK - I always felt a bit baffled by the reports our finance admin produced).

Alongside this, obviously, there is the added monthly cost of paying for a bookkeeping platform and/or a bookkeeper. |

Can you advise? I’m keen to set things up correctly from the start so I have things in place for when I grow it to the size I described above, but also to keep things as simple as possible and ensure I fully understand and can personally access/ work with all aspects, rather than the situation I had before where, as the company grew, I increasingly felt a bit lost and out of control in terms of a clear understanding of the financial side of it.

Thanks so much! This may sound silly or quite basic but this area, the finances, is where I get a bit stuck in terms of the business.

Have a great day.

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