Short Answer
Philippine businesses generally need to maintain appropriate books of accounts and supporting accounting records that accurately document their transactions. Depending on the bookkeeping method used, records may be manual, loose-leaf, or computerized. Businesses should also retain invoices, vouchers, returns, and other source documents supporting their entries. Current BIR rules generally require these books and accounting records to be preserved for five years.
Key Takeaways
• Businesses subject to Philippine internal revenue taxes are required to keep relevant and appropriate bookkeeping records.
• The BIR recognizes manual, loose-leaf, and computerized books of accounts, subject to the requirements for the method selected.
• Bookkeeping records need supporting documents such as invoices, vouchers, returns, and other source documents.
• Books of accounts and supporting accounting records generally need to be preserved for five years under current BIR rules.
• Good bookkeeping is not simply record storage. It supports tax filing, financial reporting, compliance, and better visibility over the company’s financial position.
What are the bookkeeping requirements in the Philippines?
Bookkeeping is a regulatory requirement as well as a basic financial management function.
The Bureau of Internal Revenue (BIR) states that corporations, companies, partnerships, and other persons required to pay internal revenue taxes must keep and use relevant and appropriate bookkeeping records.
For a business, that means transactions should not simply exist in bank statements, spreadsheets, invoices, or an accounting platform. They need to be properly reflected in the books and supported by appropriate records.
This becomes particularly important when financial information is used to prepare tax returns and financial statements or when records are requested for examination.
For foreign-owned companies, the same principle applies. Establishing a Philippine entity creates an ongoing accounting and tax function that needs to be maintained after registration. Our guide to accounting for foreign businesses in the Philippines explains how bookkeeping fits into that wider responsibility.
What books and records should a business maintain?
The exact set of books appropriate for a business depends on its circumstances and accounting system. Current BIR materials dealing with records for examination identify books and records such as the general ledger and subsidiary ledgers, general journal, sales and purchase books or registers, cash receipts records, cash disbursement books, and trial balances.
In practical terms, common records may include:
| Record | What it generally captures |
| General journal | Transactions and accounting entries recorded chronologically |
| General ledger | Transactions organized by individual accounts |
| Sales records | Revenue and sales transactions |
| Purchase records | Purchases made by the business |
| Cash receipts records | Money received by the company |
| Cash disbursement records | Payments and money leaving the company |
| Subsidiary ledgers | Detailed information supporting particular general ledger accounts |
Not every company should assume that the exact same collection of books applies in the same way. The bookkeeping setup should reflect the taxpayer’s circumstances and the accounting method being used.
What matters is that the business maintains relevant and appropriate records capable of supporting its transactions and tax reporting.
Manual, loose-leaf, or computerized books?
Philippine bookkeeping does not necessarily mean handwriting every transaction into a physical ledger.
The BIR currently recognizes three types of books of accounts for new business taxpayers: manual books, loose-leaf books, and computerized books of accounts.
Each operates differently.
Manual books use permanently bound physical books. The BIR’s current registration checklist provides for registration through the Online Registration and Update System (ORUS), which can generate a QR stamp for the books, as well as a manual registration process.
Loose-leaf books allow accounting records to be generated in loose-leaf form, subject to applicable BIR requirements. Current BIR guidance states that taxpayers opting for loose-leaf books need the required Permit to Use before use.
Computerized books of accounts allow records to be maintained electronically using an approved computerized approach. Current guidance similarly requires the applicable Acknowledgment Certificate for computerized books or a Computerized Accounting System before use.
The right method depends on the business, transaction volume, systems, and operational needs.
For growing companies, the broader benefit of digital bookkeeping for business compliance is that financial records can be maintained through a more structured process instead of relying on disconnected files and manual reconciliation.
Supporting documents matter as much as the books
A ledger entry alone does not tell the entire story of a transaction.
Businesses also need source documents supporting what has been recorded.
Under BIR Revenue Regulations No. 7-2024, “other accounting records” include corresponding invoices, receipts, vouchers, returns, and other source documents supporting entries in the books of accounts.
Depending on the business and transaction, supporting records can therefore include sales invoices, purchase invoices, vouchers, purchase orders, delivery receipts, debit or credit memos, and other relevant documentation. BIR examination guidance lists many of these records among documents that may be required depending on the taxpayer’s circumstances.
This is why good bookkeeping is more than entering a number into accounting software.
If the business records an expense but cannot establish what the expense was for or produce the appropriate supporting documentation, the accounting record is incomplete from a compliance perspective.
An effective monthly process should therefore connect each recorded transaction with the evidence supporting it.
How long should accounting records be kept?
Record retention is another important part of Philippine bookkeeping.
Revenue Regulations No. 7-2024 generally require books of accounts, subsidiary books, and other accounting records to be preserved for five years. The period is reckoned from the day following the deadline for filing the relevant return or, where the return was filed late, from the date it was actually filed for the taxable year in which the last entry was made.
The required format depends on the bookkeeping method. Manual books and bound loose-leaf records are preserved in hard copy, while computerized books and associated accounting records may be preserved electronically under the regulation.
There is an important qualification. If a taxpayer has a pending protest or claim for tax credit or refund and the records are material to that matter, the relevant books and records must be retained until the case is finally resolved, even if that extends beyond the normal five-year period.
Businesses should therefore avoid automatically destroying records simply because five calendar years have passed.
Why monthly bookkeeping matters
Keeping books technically registered is only the beginning. They also need to reflect what the company is actually doing.
Monthly bookkeeping helps prevent the accounting function from becoming a year-end reconstruction exercise.
When transactions are recorded consistently, management can identify missing documents, unreconciled amounts, unusual entries, and incomplete records while the information is still relatively recent.
This also matters for tax preparation.
Accurate tax returns depend on accurate underlying records. If bookkeeping is several months behind, preparing a return can require accountants to reconstruct transactions immediately before a deadline.
Monthly bookkeeping can instead create a recurring rhythm:
Transactions occur → supporting documents are collected → transactions are recorded → accounts are reconciled → tax and accounting work is prepared from organized records.
That process gives founders better financial visibility while creating a stronger foundation for recurring tax and compliance work.
Build bookkeeping into your compliance process
Bookkeeping should not operate separately from the rest of the company’s obligations.
Your accounting records feed into financial reporting and tax preparation. Tax requirements create deadlines for the accounting team. Changes in the business can affect how transactions need to be recorded and reported.
Treating these functions as completely separate tasks can create unnecessary coordination.
Through our Accounting and Bookkeeping service, we bring monthly bookkeeping, accounting, tax filing, and recurring compliance together with one professional team.
Our ongoing accounting and compliance service currently starts from ₱8,000 per month. The service includes monthly bookkeeping and accounting, tax preparation and filing, a compliance calendar, a dedicated Comply.ph account manager, and access to a Comply.ph CPA and compliance specialist.
We combine experienced accounting and compliance professionals with a modern client dashboard. Our professionals handle the accounting work, while the dashboard provides a clearer and more organized way to work with our team. It is not accounting software that you are expected to operate yourself.
For businesses already working with another accountant, moving the ongoing work does not require having incorporated through us. We can take over an existing company’s accounting and bookkeeping based on the agreed onboarding and service scope.
Keep your books current without managing the accounting yourself
Bookkeeping works best as an ongoing business process, not a task reconstructed when a tax deadline arrives.
We can manage your monthly bookkeeping, accounting, tax filing, and recurring compliance through one Philippine accounting firm, with a dedicated point of contact and access to accounting and compliance specialists.
Accounting and ongoing compliance starts from ₱8,000 per month.
Get started with Comply.ph Accounting and Bookkeeping. Talk to an expert now.
FAQS
1. Are businesses in the Philippines required to keep books of accounts?
Yes. The BIR requires persons and entities subject to internal revenue taxes to maintain relevant and appropriate bookkeeping records. The appropriate books and method depend on the taxpayer’s circumstances.
2. Can Philippine businesses use computerized books of accounts?
Yes. The BIR recognizes computerized books of accounts as well as manual and loose-leaf books. Computerized and loose-leaf methods are subject to their respective BIR authorization requirements.
3. How long should Philippine businesses keep accounting records?
Under current BIR rules, books of accounts and supporting accounting records generally need to be preserved for five years, calculated according to the rules in Revenue Regulations No. 7-2024. Certain records must be retained longer when relevant to an unresolved protest or tax credit or refund claim.
4. Do invoices need to be kept with bookkeeping records?
Businesses need to retain appropriate source documents supporting their accounting entries. BIR rules specifically include invoices, receipts, vouchers, returns, and other source documents within the definition of other accounting records.
5. Can Comply.ph handle both bookkeeping and tax filing?
Yes. Our Accounting and Bookkeeping service combines monthly bookkeeping and accounting with tax preparation and filing and recurring compliance support. The exact scope and monthly price are confirmed during onboarding.
