Books of accounts
The registered records of your business transactions. Cash books, journals and ledgers each have a different job.
Why this exists, and why it covers you
Section 232 of the Tax Code puts the duty on "all corporations, companies, partnerships or persons required by law to pay internal revenue taxes." The word doing the work is persons. The section never limits itself to sole proprietors or businesses with storefronts; a freelancer in practice of profession is covered by the same sentence as a corporation.
A business or professional practice keeps its own transaction records. Employer payroll reporting alone does not document the transactions of a separate business or freelance practice.
Philippine income tax is self-assessed. You compute your own 1701Q and the BIR takes your word for it, until it checks. The books are what it checks against, and books, invoices and returns must tell one story. A return with no books behind it is an unsupported claim.
Match the books registered for your business with your RDO. A simplified bookkeeping arrangement does not mean every freelancer uses the same two notebooks. TAXKAYA supports Cash Receipts, Cash Disbursements, General Journal and General Ledger, which serve different roles.
Who this is for
- Taxpayers required to keep books for their business or profession
When
- Register before the applicable deadline, then keep updated
- For new registrants using manual books, register before the earlier first quarterly or annual income tax return deadline. Register subsequent manual books before use. Loose-leaf and computerized books have separate authorization and submission rules.
How to do it
- 01Confirm the books appropriate to your business and register them through the applicable ORUS or RDO process. Use the registered books and their physical layouts as your starting point.
- 02Use Cash Receipts for money received and Cash Disbursements for money paid. Record other balanced entries, including noncash adjustments, in the General Journal. The General Ledger groups the postings by account. TAXKAYA provides pages to guide manual transcription.
- 03Ordinarily preserve books and supporting records for five years under Section 235 and RR 7-2024. Count from the statutory return-filing deadline, or actual filing if late, for the taxable year of the last entry. Keep records longer when a pending case requires them.
What bites beginners
- Keep source invoices, journal references and account postings traceable. An app total alone is not the same as complete books and supporting records.
- Manual books do not need annual replacement while unused pages remain. Register the next set before using it. Installing an app or exporting a PDF does not authorize a loose-leaf or computerized bookkeeping system.
Sources
- NIRC Sec. 232 on books of accounts, consolidated text (NTRC)
- BIR RMC 91-2024, manual books registration and replacement, Q11–12
- BIR RR 7-2024, Section 4, preservation of books and records
- RA 11976, amendment of NIRC Section 235 (Supreme Court E-Library)
- BIR RMC 65-2025, choice and authorization of bookkeeping systems
Statute first, explainers second. When a link and the law disagree, the law wins.
Checked against BIR rules on
Related
Good records make the next step easier. The TAXKAYA mobile app helps you record income and expenses and prepare your physical book pages.
Meet the mobile appPractical guidance, not legal or tax advice. Written against the rules in force as of July 2026. Verify current dates on bir.gov.ph before filing.