Books of Account for Professionals and Freelancers: What BIR Expects and How to Stay Compliant

 

If you’re a professional or freelancer in the Philippines—whether a doctor, consultant, creative artist, or independent contractor—managing your Books of Account properly is crucial. The Bureau of Internal Revenue (BIR) requires self-employed individuals to keep accurate financial records to support tax filings and maintain transparency.

This guide will help you understand what books you need to keep, how to register them, and tips to stay compliant, so you can focus on your craft or profession without worrying about penalties.

Who Needs to Keep Books of Account?

According to the BIR, the following self-employed professionals and freelancers must maintain Books of Account:

Doctors, dentists, lawyers, architects

Freelance consultants and trainers

Independent creatives (writers, designers, artists)

Contractors and service providers registered with the BIR

Even if your business isn’t incorporated, if you are registered as a self-employed taxpayer (with an Authority to Print receipts and registered under the BIR), maintaining books is mandatory once you exceed a certain gross sales or receipts threshold.

What Books of Account Do Professionals and Freelancers Need?

The required books depend on your business method and tax registration:

Manual Books (most common for freelancers)

General Journal – Records all daily financial transactions in chronological order

General Ledger – Summarizes all transactions by account (e.g., income, expenses, assets)

Cash Receipts Book – Records all incoming cash from clients

Cash Disbursements Book – Tracks all payments made for business expenses

Loose-Leaf or Computerized Books (for higher volume or preference)

Same as manual books but in electronic format

Requires additional registration with the BIR and submission of backup files

Registering Your Books with the BIR

Before you start recording, your books must be registered and approved by the BIR.

For manual books: Bring your columnar notebooks to your RDO to have them stamped and registered.

For loose-leaf or computerized books: File BIR Form 1900 to request approval and secure the Permit to Use (PTU) before use.

Using unregistered books can lead to disallowed deductions and penalties during an audit.

Best Practices for Bookkeeping Compliance

1. Record Transactions Promptly

Avoid piling up entries. Update your books at least weekly or as soon as transactions occur.

2. Keep All Supporting Documents

Retain official receipts, invoices, contracts, and payment proofs linked to your entries.

3. Use Consistent Account Titles

Maintain clear and uniform names for income and expense accounts to make tracking easier.

4. Reconcile Monthly

Cross-check your cash flow with bank statements and receipts to ensure accuracy.

5. Retain Books for 10 Years

BIR requires keeping books and supporting documents for a minimum of 10 years.

Common Mistakes to Avoid

Using unregistered or blank books

Delaying entry of income and expenses

Not keeping supporting receipts and invoices

Mixing personal and business expenses in one book

Failing to register replacement books after filling the current ones

Why Good Bookkeeping Matters

Helps you file accurate income tax and VAT returns

Supports claims for business deductions and exemptions

Reduces risk of BIR audit penalties or surcharges

Gives you a clear picture of your financial health and cash flow

Helpful Tools for Freelancers

Use simple spreadsheet templates or mobile accounting apps designed for freelancers

Consider basic accounting software that can generate reports compliant with BIR standards

Consult with a BIR-accredited accountant for guidance and annual filings

Final Thoughts

Keeping proper Books of Account may seem daunting at first, but it’s a necessary step toward professional credibility and tax compliance. With the right tools, regular habits, and a clear understanding of BIR requirements, you’ll stay on top of your financial records—letting you focus on what you do best.

Need help registering your books or setting up a simple bookkeeping system? Reach out to a tax consultant or accountant who can tailor advice for your profession.