BIR-required accounting records that every registered business must maintain — including journals, ledgers, and subsidiary books — available for BIR examination.
Books of accounts are the mandatory accounting records that every registered taxpayer must keep and maintain in the Philippines. The BIR requires these to be kept at the taxpayer's registered address and made available upon audit. At minimum, most businesses must keep a General Journal, General Ledger, and applicable subsidiary books (accounts receivable ledger, accounts payable ledger, inventory book, cash receipts book, cash disbursements book).
Books can be maintained manually (traditional bound journals) or electronically through a BIR-accredited computerized accounting system (CAS). Manual books must be registered with the BIR before use by stamping them at the RDO. Electronic books require a Permit to Use (PTU) for the accounting software.
In practice: Maliwanag Grocery in Batangas maintains its books electronically. It has a Cash Receipts Book recording all sales, a Cash Disbursements Book for all payments, an Accounts Receivable Ledger tracking credit sales to its regular customers, and an Inventory Book logging stock movements. When the BIR sends an LOA for a 2023 audit, the owner produces all these books for the 2023 period.
Why it matters: Your books are your primary defense in a BIR audit. Well-maintained books reconcile perfectly with your tax returns — every peso of income and expense declared on your returns should be traceable in your books. Poorly kept books (missing entries, unbalanced records, undocumented transactions) give BIR auditors grounds to reconstruct your income using indirect methods, which almost always results in higher tax assessments.
Books of accounts must be kept for 10 years under the National Internal Revenue Code — do not dispose of records prematurely.