A business is a team effort
Your log is just fine for your part of the bookkeeping job, as long as you keep it honestly.
Your bookkeeper does the bookkeeping, all nice, neat and to GAAP standards. Filing taxes (not your job) is as easy as plugging in numbers out of the bookkeeping.
I’m not intimidated by anything, and I do bookkeeping... too much. However I work better when I’m not doing bookkeeping and focusing on the stuff that makes the business win. As businesses get bigger, this becomes mandatory. You don’t think Elon Musk or Jerry Yang do their own Quickbooks, do you? LOL, of course not, they have people to do that.
And the good news for you is, those people are much cheaper than you think they are.
In fact, I’ll make a bet. I bet you do not personally file your own personal tax forms, tabulating the income and expenses, hand writing the numbers onto the tax forms, and mail them in on paper. I bet you sit there on your computer, frazzled and stressed out, and go to TurboTax or H&R Block or some equivalent and try to find the numbers it asks you for. Now if you make enough money to think about opening your own business, I bet you’re paying way too much taxes because you’re missing deductions you’ve earned. Getting a bookkeeper to handle both your personal and business taxes may well pay for itself.
Certainly, “taking that load off your mind” will free your mind to do a better job pursuing your core business, and make more money.
Master yourself.
Understand that every human being has very strong feelings about money. There is mental programming burned into your brain even stronger than politics, and it is mostly subconscious. It’s placed there in childhood years, and from observation and experience (not book teaching).
People can be very powerfully affected by that, to the point where dealing with money in a certain way offends a values system they don’t even realize they have. Say, someone as a child watched money tear the family apart - endless fights, a gruesome divorce that was largely about money, etc. If that person values family, it’s gonna make them subconsciously think of money as toxic - and they may well “push it away” - not taking financial opportunities (“who needs it”), pushing money out of their wallet and bank account (“there’s never enough”), etc. Ironically they set themselves up for the same problem!
So with all due respect... when a smart person is inexplicably blocked from being smart with money, it’s worth looking into what might be behind that. The takeaway is that is very fixable, but the fix is not in our bailiwick here on money.se.
Trust me that accounting will make sense. In the meantime, take your lessons one at a time. Trying to gulp down a bookful of lessons in one go, is probably a bad idea anyway.
Don’t be evil
To stay out of jail, it’s that simple. Do your level honest best without being sneaky or clever. Don’t do anything that would cheat another person, including your fellow taxpayers. Don’t do sneaky things like pretending a huge flatscreen TV is a business expense. Keep it clean and honest, and jail becomes an impossibility even if you make honest mistakes.
Lesson of the day: keep finances separate
The takeaway for today is that you must think in terms of wearing two hats. Your personal life is your personal life. Your business life is a completely different “life”. The two do not mix.
It’s sort of like being a trustee. If you had a family member who had a mental disability and could not manage their own financial affairs, and it became your job to do that, then you would use their money to pay for their stuff. And your money to pay for your stuff. If your cable bill was due, you wouldn’t grab the trustee checkbook to pay it; that would be stealing.
You have the same mentality toward your business. Dolbier Widgets Unlimited gets a totally separate checkbook and credit cards. Pay cable bill with personal money, never grab the DWU checkbook to pay a personal expense. Likewise never pay for business needs out of your own pocket.
If you need to add money to the business, your bookkeeper will tell you how to do that. If you want to take profit from the business, again, your bookkeeper will tell you how to do that.
When you do that... and your business gets to a certain point, you can ask your bookkeeper to “throw a switch” and give you a liability shield. That makes it almost impossible to sue you personally due to problems with your products. In order to throw that switch, you must already be doing the above.
