Starting a business in the Philippines comes with responsibilities—not just to your customers and employees, but also to the government. One of the most essential, and often overlooked, aspects of compliance is maintaining proper books of account as required by the Bureau of Internal Revenue (BIR).
Whether you’re running a sari-sari store, managing a growing startup, or freelancing as a creative, this guide will walk you through everything you need to know about BIR-registered books of account.
What Are Books of Account?
Books of account are official records of a business's financial transactions. These include sales, purchases, expenses, assets, and liabilities. The BIR requires businesses to keep these books accurately and up-to-date for tax and audit purposes.
Who Needs to Keep Books of Account?
All businesses and self-employed individuals registered with the BIR must keep books of account, including:
Sole proprietors
Partnerships
Corporations
Freelancers and professionals
The type and complexity of the books depend on your tax type, business size, and accounting method.
Types of Books of Account
There are three major types of books recognized by the BIR:
1. Manual Books of Account
These are physical, pre-printed ledgers where entries are handwritten.
Common books include:
General Journal
General Ledger
Cash Receipts Book
Cash Disbursements Book
Sales and Purchases Book (for VAT-registered businesses)
Best for: Micro and small enterprises
Requirements: Register at the BIR before use by having each page stamped.
2. Loose-Leaf Books of Account
Printed versions of accounting records, usually generated by software and compiled in binders.
Key requirements:
Must submit a sworn statement and sample printout to the BIR for approval.
Once approved, loose-leaf pages must be printed and submitted yearly.
Best for: Businesses using Excel or accounting systems without full BIR-accredited software
Annual submission of printed books with BIR is required.
3. Computerized Books of Account
These use accounting software systems that capture, store, and report business transactions digitally.
Key requirements:
Submit an Application for Permit to Use (PTU) computerized accounting system to BIR.
Submit backup files, reports, and certifications from the software provider.
Best for: Medium to large enterprises with high transaction volumes
Tip: The system must be BIR-accredited or comply with BIR's data structure requirements.
How to Register Your Books of Account with the BIR
Here’s a general process applicable to all types of books:
Step 1: Register Your Business with the BIR
Before registering books, make sure your business is registered with the BIR and has:
Certificate of Registration (BIR Form 2303)
Tax Identification Number (TIN)
Official Receipt or Sales Invoice authority (ATP)
Step 2: Choose Your Type of Books
Decide between manual, loose-leaf, or computerized based on your business size and needs.
Step 3: File the Required BIR Forms
Depending on the type of books:
| Type | Required Forms/Documents |
|---|---|
| Manual | BIR Form 1905 (for initial or additional books) |
| Loose-Leaf | BIR Form 1900 + Sworn statement + Sample formats |
| Computerized | BIR Form 1900 + System documentation + Sample reports |
Step 4: Submit to the BIR RDO
Bring your documents to your assigned Revenue District Office (RDO). For manual books, the BIR will stamp each page.
When to Register or Update Books of Account?
Upon initial business registration
When there are changes in accounting method
When shifting to a new system (e.g., manual to computerized)
When books are full (for manual)
Penalties for Non-Compliance
Failure to register or maintain proper books can lead to:
Fines up to ₱50,000
Suspension of business operations
Issues during BIR audits
Best Practices
Update books regularly—don’t wait for tax deadlines.
Keep backup copies, especially for computerized and loose-leaf books.
File your annual submissions on time.
Consult with an accountant or tax advisor to ensure compliance.
Final Thoughts
Maintaining proper books of account isn't just about staying legal—it helps you understand your business better and make smarter financial decisions. With the right setup and guidance, BIR compliance becomes a powerful tool for growth, not just a burden.
Need help registering your books of account or choosing the right system? Drop your questions in the comments or contact a certified accountant today!
إرسال تعليق