For businesses in the Philippines looking for a more efficient way to manage financial records, loose-leaf books of account offer a flexible middle ground between traditional manual books and fully computerized systems. However, the BIR has strict rules for their use—including approvals, formatting standards, and annual submission requirements.
In this comprehensive guide, we break down what loose-leaf books are, how to get BIR approval, how to format them correctly, and what mistakes to avoid to stay fully compliant.
What Are Loose-Leaf Books of Account?
Loose-leaf books are printed versions of your accounting records, typically generated from spreadsheets or basic accounting software. Instead of using pre-bound ledgers or a full computerized system, entries are typed, printed, and compiled in binders.
Think of them as a digital-prepared, physically submitted version of your books.
Ideal for:
Small to medium businesses
Enterprises using Excel or non-BIR-accredited accounting tools
Business owners who want cleaner, typewritten records without going fully computerized
BIR Requirements for Loose-Leaf Books
Before you can use loose-leaf books, BIR approval is mandatory. Here's what you need to prepare and submit.
Documents Required:
BIR Form 1900 – Application for Authority to Use Loose-Leaf Books of Account
Sworn Statement – Indicating:
The types of books you plan to use (e.g., General Journal, Sales Book)
How you will generate and store them
The exact format and structure
Sample Printed Books – At least 1 to 2 pages from each type of book to be used
BIR Certificate of Registration (Form 2303) – Photocopy and original
Valid government-issued ID – Of the taxpayer or authorized representative
Letter of Intent (optional but recommended) – Stating your reason for switching to loose-leaf
Submit these documents to your assigned Revenue District Office (RDO).
BIR-Approved Loose-Leaf Formats
Your loose-leaf books must meet specific formatting guidelines:
Standard Components:
Page Numbering – Sequential per book, with no skipped or duplicated pages
Headers – Each page must contain:
Company name
TIN and BIR registration address
Name of the book (e.g., "Sales Journal")
Tax period covered
Columns – Clearly labeled for date, particulars, references, debit/credit, and running balance, depending on book type
Common Types of Loose-Leaf Books:
General Journal
General Ledger
Cash Receipts Book
Cash Disbursements Book
Sales Journal (VAT/Percentage Tax payers)
Purchases Journal
Tip: Design your format to closely mimic manual book formats to increase chances of approval.
Annual Submission Requirements
Once you receive BIR approval, you must submit printed copies of your loose-leaf books every year, within 15 days after the end of the taxable year.
What to Submit:
Printed copies of all registered loose-leaf books (hardbound or neatly filed in binders)
Inventory listing of submitted pages
Notarized sworn statement (updated annually)
Failure to submit these on time can nullify your approval and result in penalties.
Common Mistakes to Avoid
Here are frequent errors that can lead to compliance issues or even BIR disapproval:
1. Using Loose-Leaf Without Approval
Many businesses assume printing records from Excel is fine—but without BIR authorization, it’s a violation.
2. Inconsistent Formats
BIR examiners will check if your pages are uniform and properly labeled. Any inconsistencies can raise red flags.
3. Missing Sworn Statement or Samples
Your application won't be processed without a signed and notarized sworn statement and sample pages.
4. Skipping Annual Submissions
Failure to print and submit your loose-leaf books annually invalidates your permit and may lead to penalties during audit.
5. Post-dated or Altered Entries
Just like manual books, loose-leaf entries must be timely and accurately recorded. Editing records after the fact is a major compliance risk.
Quick Compliance Checklist
Received BIR approval via Form 1900
Format follows BIR standards (headers, page numbers, columns)
Pages are sequentially printed
Year-end printed copies submitted within 15 days after fiscal year-end
Sworn statements are notarized and up to date
Books are stored securely and ready for audit when needed
Final Thoughts
Loose-leaf books of account are a practical solution for businesses that want more flexibility than manual books without the complexity of a computerized system. But BIR rules must be followed to the letter—from the initial permit to formatting and annual filing.
Done right, loose-leaf bookkeeping simplifies your financial reporting and helps ensure smooth tax audits. Done wrong, it could expose you to fines, disqualification, or worse—audit findings you’re not ready for.
Still unsure if loose-leaf books are right for your business? Consult with a BIR-accredited accountant or message us to help you prepare your documents and avoid common pitfalls.
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