Bookkeeping is both a practical and legally necessary part of doing business in the Philippines. Keeping accurate and organized financial records helps business owners manage their cash flow, track expenses, file taxes, and comply with government regulations. Understanding bookkeeping provides clearer insights into your daily financial operations for business owners and employers, helping you make smarter decisions and avoid financial mismanagement.
What is Bookkeeping?
Bookkeeping is the process of recording and organizing all financial transactions made by a business. These transactions include sales, purchases, receipts, payments, payroll, and more. In the Philippines, bookkeeping is also a legal requirement for businesses registered with the Bureau of Internal Revenue (BIR).
The primary goal of bookkeeping is to keep a clear and complete record of your business’s financial activities. This record is then used to generate reports like your balance sheet, income statement, and cash flow statement, which are essential for financial planning and compliance.
How to Do Bookkeeping
You don’t have to be an accountant to understand bookkeeping basics. You can start with these simple steps:
- Choose Your Bookkeeping Method
- Manual Bookkeeping: Using columnar books or ledgers to record transactions by hand. Smaller businesses usually do this with only a few transactions per day.
- Computerized Bookkeeping: Using software like Excel, QuickBooks, or Xero for more efficiency and accuracy.
- Set Up Your Chart of Accounts
This is a categorized list of all your accounts—assets, liabilities, equity, income, and expenses. Each account will have its own ledger to track specific transactions. - Record Transactions
Every transaction should be recorded with the following details (typically organized into columns in a ledger or spreadsheet):- Date
- Description
- Amount
- Account affected (e.g., sales, rent expense)
- Reference or receipt number
- Use the Double-Entry System
In the Philippines, the double-entry system is the standard. This means every transaction affects at least two accounts: one debit and one credit. - Reconcile Your Records
At the end of each month, reconcile your books with your bank statements to ensure they match. If you spot any discrepancies, investigate the cause. It could be a simple error, a sign of financial mismanagement, or even fraud. - Store Supporting Documents
Keep official receipts (ORs), sales invoices, billing statements, and other supporting documents for BIR audit purposes. As required by Philippine Revenue Regulations No. 17‑2013, these must be stored for at least 10 years. - File Required Reports with the BIR
Use your records to prepare and file monthly and quarterly tax returns. This includes VAT, percentage tax, income tax, and withholding tax reports.
Bookkeeping Sample Template
Here’s a basic example of what a manual bookkeeping entry might look like:
| Date | Description | Account Debited | Account Credited | Amount (PHP) |
|---|---|---|---|---|
| 2025-07-01 | Sale to Customer | Cash | Sales Revenue | 10,000.00 |
| 2025-07-02 | Office Rent Paid | Rent Expense | Cash | 5,000.00 |
In computerized bookkeeping software, these entries are automated through forms and templates, but the logic remains the same. While the software is helpful, it still requires a knowledgeable bookkeeper who can use it properly.
For businesses using Excel, you can create sheets for:
- Cash disbursement journal
- Cash receipt journal
- Sales journal
- Purchases journal
- General journal
Reading your bookkeeping records gives you a clearer understanding of your business’s financial health and operations.
Example of Bookkeeping
Let’s say you own a small sari-sari store in Quezon City (a simple example to help you understand). One day, you sell goods worth PHP 3,000, buy new inventory for PHP 1,500, and pay PHP 500 for electricity.
Your journal entries would look like this:
| Date | Description | Account Debited | Account Credited | Amount (PHP) |
|---|---|---|---|---|
| 2025-07-01 | Sale of Goods | Cash | Sales Revenue | 3,000.00 |
| 2025-07-01 | Inventory Purchase | Inventory | Cash | 1,500.00 |
| 2025-07-01 | Electricity Payment | Utilities Expense | Cash | 500.00 |
For smaller businesses, bookkeeping can be handled by a trained staff member. Since there are usually only a few transactions daily, it’s easier to record them and correct errors using manual bookkeeping or spreadsheets.
Medium – to large-sized businesses have more transactions, making it more difficult to record accurately and fix mistakes. To avoid errors and ensure compliance with regulations, they should consider working with a professional bookkeeping service.
Bookkeeping Services That Can Support You
We recommend that medium to large businesses outsource their bookkeeping for more accurate and efficient financial recording. Triple i Consulting offers various outsourced bookkeeping services to support your business needs.
- Recording all transactions in the accounting system
- Maintenance of books of accounts
- Preparation and assistance in the filing of various tax returns
- Other accounting and legal services are listed here
Instead of hiring a bookkeeping officer, purchasing software, and constantly worrying about your records, you can leave the paperwork to us. Our team of tax experts and accountants uses advanced software to streamline your bookkeeping, allowing you to focus on running your business.
Final Thoughts
Understanding the basics of financial recordkeeping will help you stay on top of your business and avoid legal or tax problems down the road. It may seem overwhelming, especially when preparing for government compliance requirements. However, once you establish a system, it becomes a manageable part of running a business. For medium to large businesses, outsourcing your bookkeeping tasks to a professional service is often more efficient.
Do You Need Help Managing Your Bookkeeping? Our Experts Are Here to Support You
Staying on top of your business finances in the Philippines can be challenging. Maintaining accurate bookkeeping helps with financial management and is a legal requirement. Poor recordkeeping or failure to meet BIR requirements can result in penalties or even business suspension.
That’s where Triple i Consulting comes in. We’re among the best accounting outsourcing companies in the Philippines, offering bookkeeping, payroll outsourcing, auditing, and tax consultation services. So let our experienced lawyers and accountants provide comprehensive support for your business, so you don’t have to stress over the paperwork.
Contact us today to schedule a consultation with one of our experts:
- Fill out the form below
- Call us at: +63 (02) 8540-9623
- Send an email to: info@tripleiconsulting.com
