If you're running a business in the Philippines—whether it's a small retail shop, a freelance gig, or an online store—you need to keep track of your cash flow. That’s where Cash Receipts and Cash Disbursements Journals come in. These two books are essential for BIR compliance, and more importantly, for understanding where your money is coming from and where it's going.
In this guide, we’ll dive into how to maintain these journals properly, what the BIR expects, and how to avoid common mistakes that could cost you during an audit.
What Are Cash Receipts and Disbursements Journals?
These are two subsidiary books of account that track the inflow and outflow of cash:
Cash Receipts Journal (CRJ)
Records all cash received by the business.
Examples:
Cash sales
Payments from customers
Rental income
Service fees
Cash Disbursements Journal (CDJ)
Records all cash paid out by the business.
Examples:
Supplier payments
Rent
Utilities
Payroll
Business expenses
They are particularly important for businesses using the cash basis of accounting, which is common for small enterprises and professionals.
Who Needs to Maintain These Journals?
BIR requires all registered businesses and professionals to maintain books of account. If your business involves handling cash, the Cash Receipts and Disbursements Journals are essential, especially if you are:
A non-VAT taxpayer under the Percentage Tax system
A freelancer or self-employed individual
A small business owner (e.g., retailer, food stall, online seller)
How to Properly Record Entries
Whether you’re using manual, loose-leaf, or computerized books, your entries must be complete, accurate, and chronological.
Sample Format – Cash Receipts Journal
| Date | OR No. | Customer Name | Description | Amount Received | Account Credited |
|---|---|---|---|---|---|
| 05/01/2025 | 101 | Juan Dela Cruz | Payment for website design | ₱10,000 | Service Income |
Sample Format – Cash Disbursements Journal
| Date | CV No. | Payee | Description | Amount Paid | Account Debited |
|---|---|---|---|---|---|
| 05/03/2025 | 001 | ABC Supplies | Purchase of office materials | ₱2,000 | Office Supplies Expense |
Key Tips:
Use official receipt (OR) or cash voucher (CV) numbers
Record entries as they happen, not weeks later
Include detailed descriptions (e.g., “Payment for May rent,” not just “Rent”)
Totals should match what appears in your bank or cash balance
Manual vs Loose-Leaf vs Computerized Journals
| Method | Pros | Cons | BIR Requirements |
|---|---|---|---|
| Manual | Simple, low cost | Tedious, easy to miscalculate | Register and have pages stamped |
| Loose-Leaf | Typed, neater | Requires annual printing and submission | Must be BIR-approved before use |
| Computerized | Fast, accurate, good for high volume | Needs approval and backup systems | Requires Permit to Use (PTU) from BIR |
Best Practices for BIR Compliance
Chronological Recording
Never backdate or skip entries.
Avoid Erasures
Use a single line to correct errors. Never use white-out.
Keep Supporting Documents
Attach receipts, vouchers, or payment confirmations to each transaction.
Reconcile Regularly
Match your books with bank statements or actual cash on hand.
Year-End Submission (Loose-Leaf/Computerized)
Submit printed or backup copies to the BIR within 15 days after year-end.
Common Mistakes to Avoid
Recording lump sums without breakdowns (e.g., “₱50,000 income” with no source)
Missing documentation for disbursements
Forgetting to register new books when old ones are full
Failing to file and submit loose-leaf or computerized books annually
Why These Journals Matter
Maintaining accurate cash receipts and disbursements journals helps you:
Stay BIR-compliant and avoid penalties
Prepare for audits with confidence
Monitor your cash flow in real-time
Prove income or expenses when applying for loans or grants
Make smarter budgeting and investment decisions
Final Thoughts
For small business owners, cash is king—and the BIR wants to know how you're handling it. By properly maintaining your Cash Receipts and Disbursements Journals, you're not just checking off a compliance box—you’re setting your business up for financial clarity and long-term success.
Need help setting up your journals or formatting them for BIR submission? Comment below or contact a licensed accountant—we’re here to help make bookkeeping simpler for small businesses like yours.
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