As a Filipino entrepreneur, you’re likely juggling a lot—sales, marketing, operations, and yes, bookkeeping. It’s easy to make financial mistakes, especially when you’re focused on running and growing your business. But here’s the thing: bookkeeping errors can cost you big—from lost revenue to BIR penalties.
In this blog, we’ll walk you through the top bookkeeping mistakes business owners in the Philippines make—and how to fix or avoid them entirely.
❌ Mistake #1: Mixing Personal and Business Finances
Why It’s a Problem:
Combining personal and business expenses makes it hard to track profitability, prepare accurate reports, and justify deductions during tax time.
✅ How to Avoid It:
Open a separate bank account for your business.
Use business credit or debit cards for all transactions.
Pay yourself a fixed “salary” if needed—don’t randomly withdraw money from the business.
❌ Mistake #2: Not Keeping Receipts or Proof of Transactions
Why It’s a Problem:
The BIR requires proper documentation. Without receipts, you risk disallowed expenses, failed audits, or even tax penalties.
✅ How to Avoid It:
Keep official receipts (ORs) for all expenses.
Use apps or folders to organize scanned or physical receipts.
Label them by category (e.g. utilities, supplies, meals) and date.
❌ Mistake #3: Delayed or Incomplete Record-Keeping
Why It’s a Problem:
When you don’t record transactions regularly, you risk forgetting details, duplicating entries, or missing out on tax deductions.
✅ How to Avoid It:
Set a weekly schedule to update your books.
Use digital tools like Excel, QuickBooks, or Xero for efficiency.
Hire or outsource a bookkeeper if it becomes too overwhelming.
❌ Mistake #4: Ignoring BIR Filing Deadlines
Why It’s a Problem:
Missing deadlines for filing tax returns or submitting reports can lead to penalties, interest, and even legal issues.
✅ How to Avoid It:
Know your deadlines: VAT, Percentage Tax, Income Tax, etc.
Use a compliance calendar or reminder system.
Consult a tax professional to stay updated on BIR changes.
❌ Mistake #5: Doing Manual Bookkeeping Without Backup
Why It’s a Problem:
Manual books (especially on paper) can be easily lost, stolen, or damaged. Without a backup, all your financial history could disappear.
✅ How to Avoid It:
Use cloud-based accounting software or Google Sheets.
Save regular backups on your computer and cloud.
Automate reports to avoid manual errors.
❌ Mistake #6: Recording Transactions Incorrectly
Why It’s a Problem:
Misclassified entries (e.g. recording a loan as income) can distort financial reports and lead to wrong tax filings.
✅ How to Avoid It:
Learn basic accounting categories: assets, liabilities, income, expenses.
Double-check entries before saving.
Get help from a bookkeeper or accountant if unsure.
❌ Mistake #7: Not Reconciling Bank Statements
Why It’s a Problem:
If your records don’t match your bank account, you could miss fraudulent charges, bank fees, or uncaptured income.
✅ How to Avoid It:
Reconcile your accounts monthly.
Use software with auto-reconciliation features.
Match deposits and withdrawals against your books regularly.
🔍 Bonus: BIR-Related Mistakes to Watch Out For
Using unregistered receipts/invoices
Forgetting to renew BIR registration annually
Filing under the wrong tax type (e.g., VAT when you should be Non-VAT)
Not updating BIR books of accounts on time
✨ Final Thoughts: Small Fixes, Big Results
Avoiding these bookkeeping mistakes doesn’t just save you from BIR headaches—it empowers you to grow with confidence. Proper records lead to smarter decisions, better tax savings, and long-term peace of mind.
💼 Need Help with Bookkeeping?
We help Filipino entrepreneurs clean up their books, stay compliant with the BIR, and focus on what they do best—running their business.
Navigating the business landscape in the Philippines can be both rewarding and intricate. Whether you’re embarking on a new venture or scaling up, ensuring that your corporate endeavors are in line with local regulations is paramount.
At CBOS Business Solutions Inc., we pride ourselves on simplifying these processes for our clients. As a seasoned professional services company, we offer comprehensive assistance with SEC Registration, Visa processing, and a myriad of other essential business requirements. Our team of experts is dedicated to ensuring that your business is compliant, well-established, and ready to thrive in the Philippine market.
Why venture into the complexities of business registration and compliance alone? Allow our team to guide you every step of the way. After all, your success is our commitment.
Get in touch today and let us be your partner in achieving your business goals in the Philippines.
Email Address: gerald.bernardo@cbos.com.ph
Mobile No.: +639270032851
You can also click this link to schedule a meeting.
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