Monthly Basic Bookkeeping Tasks for Small Business Owners in the Philippines

Do you find yourself struggling with meeting the monthly deadlines and staying up all night just to finish the books? We feel you. Bookkeeping cannot be done in just one sitting – you need to be strategic in every deadline that you should meet.

Contrary to common knowledge, good bookkeeping doesn’t end with just balancing the books, it is a legal requirement. 

For small business owners in the Philippines, it’s about staying compliant with tax laws from the Bureau of Internal Revenue (BIR). It is hurtful for the budget if the small business owner would also need to set aside budget just to pay for penalties, fines, and even face closure due to committing late submissions and violations.

To help you avoid these unprecedented mishaps in the future, we have curated a simplified monthly basic bookkeeping tasks for small business owners to adapt and follow through.

Bookkeeping and Its Legal Foundations

Before the main topic, we must dive through understanding some of the legal framework that governs bookkeeping in the Philippines, so we can further know why we must follow such regulations:

• National Internal Revenue Code (NIRC) of 1997, as amended: This is the primary law that mandates all taxpayers to keep and preserve adequate records of their business transactions. Section 232 of the NIRC, as amended by the TRAIN Law (Republic Act No. 10963), requires taxpayers to maintain efficient and adequate bookkeeping records. These records must be authorized by the BIR.
• BIR Revenue Regulations (RR) and Revenue Memorandum Circulars (RMC): The BIR issues these to provide specific rules and guidelines for implementing the NIRC. Recent updates, such as RMC No. 3-2023, authorize online registration through the Online Registration and Update System (ORUS) and provide for QR code stamping on books of accounts, and RR No. 81-2025, which provides a clearer framework of what constitutes a deductible business expense, with emphasis on what expenses directly relates to the generation of active income, which is considered deductible expense.
• Republic Act No. 12214 (Capital Markets Efficiency Promotion Act – CMEPA): This law, which took effect on July 1, 2025, introduced key amendments to the Tax Code aimed at simplifying the tax system. This includes changes to passive income and capital gains taxes.

Related article here: Meet CMEPA: The Investment Tax Reform Changer

The Monthly Basic Bookkeeping Task Checklist

Now, here’s a simple breakdown that we have created for you as a guide for the critical tasks that you shall perform every month to ensure that your business remains compliant and financially sound: 

WEEK 1: COLLATE AND RECORD ALL TRANSACTIONS

As the foundation of your basic bookkeeping task, the first thing to do is to collect and document everything from the previous month — no matter how big or small the business transaction is.

• Collect the Source Documents – find and sort out all receipts, invoices, bank statements, and official receipts – both paper and digital trails. The BIR mandates that all transactions shall be supported by these source documents. These trails should prove every entry on your books.
• Record All Financial Transactions – it’s a crime to miss anything! Don’t forget to record every document, every transaction, and every penny (even a centavo). You may use your chosen bookkeeping system, may it be a manual ledger, spreadsheet, or an accounting software. Just make sure to record every transaction – from sales, purchases, payments, and expenses. Make sure that you also categorize each entry in a complete and accurate manner.
• Preserve Your Books of Accounts – It is a requirement of the BIR to maintain such specific books of accounts, which may be in a form of manual (bound), loose-leaf (computer-printed), or digitalized (computerized). These usually include a General Journal, General Ledger, Cash Receipts Journal, and Cash Disbursements Journal.

Related article here: Stay BIR Compliant: Bookkeeping for Foreign Businesses in the Philippines

WEEK 2: RECONCILIATION AND REVIEW

After you record and sort out all of the transactions, the next step is ensuring that your internal records also match your external statements.

• Reconcile Your Bank Accounts – Have a comparison between your business’ bank statements with your internal cash and bank records. This would help you identify discrepancies, such as unrecorded bank fees, bounced checks, or missed payments.
• Review Accounts Receivable (AR) – Monitor those outstanding invoices and ensure that you regularly follow up with your clients in terms of overdue payables. A healthy AR is very crucial in terms of maintaining a healthy cash flow.
• Manage Accounts Payable (AP) – Don’t lose sight of bills and invoices that came from your suppliers. Ensure due diligence in paying them on time so you can avoid penalties and fines. Good credit payment also equates to maintaining good relationships with suppliers.
• Payroll Processing (if applicable) – Calculate your employee’s wages, benefits, and statutory deductions such as SSS, PhilHealth, and Pag-Ibig contributions. The correct withholding of these is a legal obligation of your business.

WEEK 3: FINANCIAL TRANSACTIONS REPORTING AND ANALYSIS

Next, as a small business owner, one your records are properly reconciled with, you can start generating reports that will provide a clear picture of your business’ performance.

• Generate Financial Transaction Statements – Build and create a Profit and Loss P&L) Statement (or Income Statement) to check if you’re earning more that you’re spending. Furthermore, generate a Balance Sheet to understand your business’ financial position at a specific point in time. These are very important factors in decision-making for the forecast of your business, as well as for future loan applications.
• Analyze Cash Flow – Examine and evaluate your cash inflows and outflows. Is your business currently generating enough cash to cover its expenses? This analysis would be beneficial for you in order to identify potential liquidity issues before they transform into crisis.

WEEK 4: TAX COMPLIANCE AND FILING

This final week is the critical period. You need to prepare in filing your taxes with the respective bureau (BIR).

•  Prepare Monthly Tax Returns – Depending on your business or industry type, you may need to file various monthly forms such as:

o   Withholding Tax on Compensation (BIR Form 1601-C): For employees’ withholding taxes.

o   Creditable Income Tax Withheld-Expanded (BIR Form 0619-E): For taxes withheld on certain income payments to suppliers.

o   Final Income Taxes Withheld (BIR Form 0619-F): For taxes withheld on passive income payments.

• Prepare Quarterly Tax Returns: While these are filed quarterly, the preparation for them happens every month.
  • Value-Added Tax (VAT) Return (BIR Form 2550Q): If your business is VAT-registered (gross sales exceed ₱3 million), you must file this quarterly.
  • Percentage Tax Return (BIR Form 2551Q): If your business is non-VAT (gross sales do not exceed ₱3 million), you must file this quarterly.

Important Note: Bear in mind that the BIR has specific due dates for filing and payment, which differ based on your Taxpayer Identification Number (TIN) and filing method (eFPS v. eBIRForms). It is vital to consult with the official BIR TAX CALENDAR for the current year to be informed, and to avoid penalties and surcharges due to delays or non-filing circumstances.

Stay Updated with Bookkeeping Legalities

As we know it, the laws and regulations are constantly changing, as the BIR’s new Revenue Regulations (RR) and Revenue Memorandum Circulars (RMC). Staying informed and knowledgeable about it is essential in terms of compliance. Here are some key updates to watch out for:

• BIR Revenue Memorandum Circular No. 81-2025: This RMC clarifies the “ordinary and necessary” rule for tax deductions. It stresses that expenses must be directly related to the generation of active income and that you must have sufficient documentation to support your claims.
• Value-Added Tax on Digital Services (VDS): RMC No. 47-2025 clarified the implementation of VAT on digital services, which took effect on June 2, 2025. This impacts businesses that purchase services from non-resident digital service providers.

 Related article here: VAT on Digital Services in the Philippines

Further Practical Tips in Maintaining Basic Bookkeeping Tasks

After those grueling weeks of preparations, it is your duty as a small business owner to ensure that you always have a contingency or back-up plan. Here are some guidelines:

• Choose a System – Whether you utilize a simple Excel spreadsheet, a manual ledger, or even a modern accounting software such as QuickBooks or Xero, you must choose a system that you can consistently use for these records. The best system is actually the one that you stick with.
• Data Back Up – In keeping your physical and digital financial transaction records, always ensure a backup and proper storage. For physical records, have a sturdy and safe physical storage in place. For digital records, consider using a cloud-based storage or any digital storage that would be safe from harmful data security threat. According to Ease of Paying Taxes (EoPT) Law, you need to retain these records for at least five (5) years from the last date of entry.
• Consider Hiring a Professional You Can Trust – If you think maintaining the books are overwhelming, consider hiring a bookkeeper or an accounting firm to take care of the books and collating these financial transactions on your behalf. It may be a smart investment in the long run as it would free you from bookkeeping hurdles and deadlines. A bookkeeper can handle such complexities of BIR compliance, allowing you to shift your focus on just growing your business.

In Summary: Bookkeeping can be Manageable

Monthly bookkeeping may seem daunting, but by breaking it down and segregating it strategically through having weekly tasks is very helpful, especially while staying informed about the latest legal requirements from the BIR. You can be sure that your business remains compliant, financially healthy, and ready for growth that your business may encounter.

Outsource Strategic Bookkeeping with Manila Bookkeepers

While bookkeeping is vital for every business, small businesses might struggle doing it alone. But having it outsourced with experienced bookkeepers such as Manila Bookkeepers would ease the burden on the small business owner’s shoulders.

Don’t let your books have missed entries of financial transactions or compliance non-conformities. Manila Bookkeepers’ expert bookkeeping team helps SMEs stay organized, tax-ready, and financially equipped – month after month.

Schedule a free meeting today with our experts and let’s start taking care of your books, like how you want to take care of your business! Email us at [email protected] for more details.