Many growing businesses run on informal bookkeeping for years without issue, until a specific moment forces a change: incorporation, a new investor doing diligence, or a lender asking for financial statements that hold up to scrutiny.
The most common gaps we find at that point are a lack of segregation between owner and business transactions, no consistent chart of accounts, and management reports that exist only in the owner's head rather than on paper.
Formalising does not have to mean building enterprise-grade systems overnight. It means putting a structure in place that can produce accurate numbers on demand and grow with the business rather than being rebuilt at the next milestone.