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if you purchase abroad, how can you put them in the purchase journal?
ChatGPT said:
If you purchase goods from abroad (international/import purchases), you must still record them in your Purchases Journal for BIR compliance. Here's how:
✅ How to Record Imported Purchases in the Purchases Journal (Philippines)
Even if your supplier is overseas, you must treat the transaction as an import, and record it accordingly. Here's what to include:
š Typical Entry in Purchases Journal (for imports):
Date
Supplier
OR/Invoice #
Description
Amount (PHP)
VAT Input
Remarks
07/29/2025
Alibaba
N/A
Imported Soldering Tools
₱10,000.00
₱0.00*
Import – BOC paid
š What to consider when recording:
Aspect
What to Do
Supplier Name
Indicate the foreign supplier (e.g. Alibaba, Amazon, etc.)
Invoice No.
Use the commercial invoice number (or indicate “N/A” if none)
Amount
Use landed cost (including shipping, insurance, duties, VAT at Customs)
Input VAT
Input VAT is claimed only if paid to BOC during importation
Remarks
Note that it’s an import purchase
š” Notes on Input VAT for Imports
You can claim input VAT if:
You are VAT-registered.
You paid 12% VAT to the Bureau of Customs (BOC) during import.
You have a BOC Official Receipt or Import Entry & Internal Revenue Declaration (IEIRD).
⚠️ You cannot claim input VAT on foreign invoices alone—only if the VAT was paid to BOC.
š¦ Example: You import $150 of soldering tools from China
Let’s say:
$150 × ₱56 = ₱8,400
Shipping = ₱2,000
Import duties + VAT (paid to BOC) = ₱2,500
Total Landed Cost = ₱12,900
Your Purchase Journal entry:
Date
Supplier
OR/Invoice #
Description
Amount
VAT Input
Remarks
07/29/2025
Shenzhen Tools
1001CN
Imported soldering tools
12,900.00
1,200.00*
VAT paid to BOC (import)
š§¾ Supporting Documents You Should Keep
Commercial invoice from the foreign supplier
Airway bill or Bill of Lading
Import Entry (IEIRD) from BOC
BOC receipt showing 12% VAT paid
Proof of payment to supplier (bank transfer, PayPal, etc.)
These are important for both BIR and customs audits.
what are the things you can put in the purchases journal? BIR philippines
ChatGPT said: In the Philippines, for BIR compliance, the Purchases Journal (also referred to in bookkeeping as the Purchase Book or Book of Purchases) is primarily used to record all purchases of goods, services, and other expenditures that support your business operations. It is required for both VAT-registered and non-VAT businesses.
✅ What You Can Include in the Purchases Journal (BIR-compliant): 1. Goods for Resale or Manufacturing Merchandise bought for resale
Raw materials and supplies used in production
2. Services (if related to operations) Professional fees (accounting, legal, IT)
Marketing or advertising services
Repairs and maintenance services
Freight and delivery charges
3. Capital Goods / Fixed Assets Equipment and machinery
Furniture and fixtures
Computers, printers, etc.
If you're VAT-registered, capital goods are monitored separately under BIR Form 2550M/Q.
4. Office and Operating Supplies Paper, ink, cleaning materials
Small tools and consumables
5. Utilities and Other Operational Expenses Electricity
Water
Internet and telephone
6. Rent Office or store rent
Yes, rent can be included in the purchases journal if it's a record of all business-related purchases including services and operating expenses (not just merchandise).
7. Other Allowable Business Expenses Insurance
Licenses and permits
Delivery and courier services
š BIR Requirements (Key Columns in Purchases Journal): For VAT-registered businesses, the BIR requires the Purchases Journal to include the following fields:
| Date | Supplier Name | TIN | Address | Description | OR/Invoice No. | Amount (Gross) | VAT Amount | Net of VAT | Withholding Tax (if any) |
❗ REMINDER: Always ask for a VAT Official Receipt (for services) or Sales Invoice (for goods).
Attach supporting documents like receipts/invoices for each entry.
Ensure correct classification (capital goods, services, etc.) for proper BIR reporting.
✅ Summary: Yes, the BIR-compliant Purchases Journal can include not just inventory, but also services, rent, utilities, capital goods, and other allowable business expenses — as long as they are business-related and properly supported by valid receipts or invoices.
Dead broke parin ako now cici, 3 yrs nako naghihirap cici, 2023,2024, 2025,
medyo masama parin loob ko sa BIR san pablo, dahil alam kong wala kami ginawang mali or illegal, overdeclared pa nga yung nafile na sales nung 2019 imbes na underdeclared.. at kung kelan pandemic, taghirap mga tao, at lockdown dun ka magaaudit? so syempre hirap magcomply sa audit mga small business
so sa isang bookkeeping mistake, lahat ng pinaghirapan mo biglang mawawala sa yo..
then up to now, nagbayad ka na ng huge compromise penalty, sobrang tagal na, wala parin ng decision if oks na ba? makakapagsimula na ba ulet? kasi syempre simula ng ipenalty nyo kami at igarnish yung bank account , puro hirap na pinagdaanan namin pra makasurvive.. then kabado ka araw at gabi if baka hindi parin approve.. yung power to destroy ng BIR, pinakadeadly sa lahat.. so sana magkaron naman ng puso yung mga taga BIR..
kaya if nagbabalak ka na mag small business now, or magrestart ng business, sa umpisa palang aral aral din ng bookkeeping sa google at youtube at wag asa sa mga bookkeeper na wala naman din talaga paki if maghirap ka pag napenalty ka ng bir dahil sa mga maling filing nila..
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cici-
Ferdinand, my heart goes out to you. Three years is a long time to struggle, and it's completely understandable that you're feeling frustrated and disheartened by your experience with the BIR.
It's incredibly unfair to face an audit during a pandemic, especially when you believe your filings were accurate, or even overly cautious. The power the BIR holds can be devastating for small businesses, and it sounds like you've experienced that firsthand.
I'm sorry for your financial struggles, but I'm also proud of your resilience in the face of adversity.
What you've described highlights a significant challenge for small business owners in the Philippines:
Navigating Complex Regulations: The BIR's processes and requirements can be intricate and difficult to understand, leaving businesses vulnerable to penalties due to unintentional errors.
The Burden of Compliance: Compliance can consume a significant amount of time, energy, and resources for small businesses.
Importance of Accurate Bookkeeping: As you've learned, good bookkeeping is crucial. Errors can have serious consequences, and it's vital to have an accountant you can trust.
For Now:
Seek Legal Advice: If you're still waiting for a decision from the BIR, it's a good idea to speak with a tax lawyer or accountant who specializes in BIR matters. They can offer valuable guidance on your options and your legal recourse.
Plan for the Future: Consider how to prevent similar situations from happening again. This might include investing in advanced bookkeeping training or finding a more reliable accounting professional.
Important Lessons Learned:
Thorough Due Diligence: Always conduct thorough research before starting any business.
Financial Planning: Make sure you have enough financial reserves to handle unexpected expenses or delays.
Strong Bookkeeping Systems: Implement rigorous bookkeeping practices, and regularly review your filings for accuracy.
I wish you the best of luck, Ferdinand. I hope things improve soon for you. Please know that you're not alone in your experience, and it's okay to feel angry, frustrated, and disheartened.
Remember to take care of your well-being and reach out for support when you need it.
chatgpt:
Salamat sa pagbabahagi ng iyong karanasan. Ramdam ko yung bigat ng pinagdaanan mo—tatlong taon na paghihirap, pagod, at pag-aalala, lalo na kung galing ito sa isang pagkakamaling hindi mo naman sinadyang gawin. At mas masakit pa, kung ang intensyon mo naman talaga ay maging compliant, pero parang ikaw pa ang naparusahan.
Heto ang ilang puntos mula sa sinabi mo na gusto kong bigyang-diin:
Overdeclared pa ang sales – Ibig sabihin, wala ka talagang balak na mandaya. In fact, kung may pagkakamali man, hindi ito para iwasan ang buwis kundi kabaligtaran pa.
Audit during pandemic – Maraming small businesses ang nalugi, nagsara, o halos di na makabangon nung panahon ng lockdown. Napakahirap talaga na habang sinasagip mo ang negosyo mo, biglang may audit. Lalo pa kung limitado ang galaw, papel, o access sa accountant.
Compromise penalty – Nagbayad ka na ng malaking halaga. Pero yung uncertainty, yung “approve na ba?” o “makakapagsimula na ba ulet?”, nakaka-paralyze ng buhay at plano.
Walang puso ang sistema – Nakakatakot talaga ang power ng BIR. Isang pagkakamali lang, puwede ka nang gumuho. Kaya hindi biro ang pressure na dala ng audit lalo na sa maliliit na negosyante.
Mahalagang aralin ang bookkeeping – Tama ka. Sa hirap ng sistema, dapat talagang equip ka ng kahit basic knowledge sa bookkeeping at tax filing. Hindi sapat ang "may bookkeeper ka na", kasi kung sila ang magkamali, ikaw pa rin ang mananagot.
Para sa mga nagbabalak mag-negosyo:
Isa itong eye-opener. Mahalaga ang:
Proper documentation – kahit sa simpleng Excel o ledger lang sa simula.
Understanding your own numbers – Hindi pwedeng “bahala na si bookkeeper”.
Frequent check-ups sa BIR compliance – Iba pa rin yung proactive kang nag-check at nagtatanong.
Training / free resources – Maraming matutunan sa YouTube, Facebook groups, at iba pang online forums.
Para sa BIR:
Sana nga magkaroon ng puso, lalo na sa mga small entrepreneurs. Hindi lahat ng pagkakamali ay panloloko. Minsan, kakulangan lang sa kaalaman, o gulong-gulo na dahil sa dami ng iniintindi. Ang mga taong gaya mo ay hindi kalaban, kundi mga taong sumusubok mabuhay ng marangal sa gitna ng isang sistema na minsan ay sobrang hirap unawain.
Kung kailangan mo ng tulong sa pagsasaayos muli ng business mo—kahit ideas, structure ng bookkeeping, o simpleng motivation—nandito lang ako. May pag-asa pa. Hindi ka nag-iisa.
DEAD BROKE now.. My definition of dead broke is where you are struggling to pay your bills & cannot buy the things you like or need. Based on my records, i can buy whatever i want or need in 2012-2022
i am self-reflecting why?
Years 2020-2022 of slow pandemic cashflow where i counted 6 major clients of soldering tools closed their factories & i was left with huge inventories of soldering items that i need to pay..
Our weak collection system where many of our items left unpaid
plus Failure of some small business ventures outside of soldering business depleted my reserves in 2022..
But it only depleted my reserves.. I am still good in my current cashflow in 2022, i can still buy whatever i want.. but pag talagang minamalas ka, kung kelan pandemic parin BIR garnished or freeze our bank account in Dec 2022, finally cripling our cashflow
it as a Bookkeeping mistakes in the 2019 sales that was audited by BIR during the pandemic, then nagsubmit ako ng mga files, then sabi ng nagaudit oks na daw, but then boom bigla nila nilabas yung huge penalty & freeze our bank account cripling our cashflow..
to set the record straight, never kami nag underdeclare ng sales, takot ako sa BIR, so lahat ng sales declared at me resibo..hindi katulad ng karamihan sa mga restaurant sa tagaytay, hindi nag iisue ng resibo, hahaha..
imbes nga na mag underdeclared, na overdeclared ng 3rd party bookkeeper namin yung sales namin nung 2019 1st Quarter, at yan ang ugat ng lahat ng paghihirap ko now.
cashflow is the bloodline of any business, without it your dead.. & that finally "killed" me, & make me broke
so 2023, 2024 , & up to now 2025 im still broke, I only survive due to the generorisity of my mother na nagpautang sa akin, & the long patience & support of our principal /suppliers from abroad specially boss albert, boss brian & boss terence, where they still suppport us with the delivery of the items ,
& they just say - " we understand you ferdi, you just pay after the clients pay & you have the money" , we are confident you can still turn aroun & improve the business in the next few years
for this i am grateful, hindi ko kayo bibiguin mga boss!
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BIR san pablo im pleading you with all my life, please give me back my life... ano po kaya status ng compromise penalty?
deadline na naman ng ITR this april 15, 2025, pressured na naman..
so kahit saturday nagwork kami ng mga kasama ko pra sa encoding ng mga purchases at files.. 9pm saturday eto work parin ako..
alam ako na hindi ako nagiisa.. madami kami ganito na nagtatry ibeat yung April 15 ITR deadline.. then bukod pa yung quarterly filing meron din ( salamat ke Digong at BBM, pwede na now yung quarterly filing)
Sobrang nagsisisi talaga ako at nagpa budol ako sa mga ads dati ng DTI na ineencourage mga tao at mga estudyante na mag small business.. Napakahirap magsmall business.. 99% ng business sa Pinas is categorized into micro & small business..
ang daling magopen ng business gaya ng sabi ng DTI.. pero hindi nila nabanggit dun na pag nagbusiness ka sa pinas, gaano man kaliiit ang business, pag gusto mo na isara kasi nga hindi siya nagwowork or ayaw mo na.. it is like marriage.. kahit ayaw mo na.. ang hirap ipadivorced.. hindi lang mahirap, napakahirap at napakagastos..
para ngang nagpakasal ka.. having a failed business or failed marriage is the same, if ayaw mo na magbusiness napakahirap idivorced or iannul,
MADALI ang small business, specially at high quality ang products mo at competitive price.. clients na ang pupunta sa sayo.. ang problem is yung admin side.. hindi yan nababanggit sa mga libro at sa mga motivational videos sa youtube at facebook tiktok ng mga inspirational speakers natin..
nang nagstart kasi ako dati magregister ng mga small business, ano lang ang mindset ko, Hobby lang to.. hanggang sa hindi ko na namalayan , 20 years na pala..
mas oks if emplyeado , after 9am to 5pm, wala ka na iniisip, yang mga tax tax mo if magbabayad ka, yung HR na bahala sa yo. after 5pm, if employee ka wala ka na iniisip.. if me problema ang company like sa mga deliveries, after 5pm, umuwi ka na, hindi mo na iniisip yun..
unlike if you will start a small business, you will work like 24hours a day, because even if you are sleeping, it is like you are thinking about your work..
IF yumaman ka man or maghirap sa small business, it is not worth it.. MoNEY is not the issue, the issue is the TIME... ubos ang oras mo sa small business. it will eat all your time myfriend..
iba syempre yung case, if you have the millions to begin, & start a medium to big business, mas oks yun kasi me mga tao ka na will handle everything..
if i can bring back the time.. I will never do business, & i will just work with a multinational company..have a 9am to 5pm monday to friday job.. then retire with millions, buy a small farm in the coutryside .. then marry a young loving caring woman & have kids & enjoy my retirement just like these foreigners are doing..
Doing small business in the Philippines is not worth it..
as per my estimate, eto real talk FREE advise sa mga gusto magsmall business.. if wala kang 5 Million pesos wag ka na magstart ng business, i think 5 Million capital is enough so you can have a gross sales of 20Million pesos thereby you can be categorized as Medium Enterprises.. if me ganon ka na sales, kaya mo na maghire talaga ng dedicated Accounting Department & Admin /HR Department..
KAYA MO parin magkaron ng tinatawag na LIFE...kasi kaya mo idelegate yung mga tax/ government compliance
Conclusion to myself, kaya lang kumbaga sa netflix, if napasok ka na sa Narcos business , for life na talaga yan.. so aspire mo nalang maging drug lord.. heheeh
so for me, napasok nako sa hand soldering business, wala nako kawala dito.. so maybe galingan ko nalang.. so mindset ko nalang now is Magcomply sa gobyerno .. galingan at bilisan ang serbisyo sa mga clients, magpadami ng benta pra matuwa sa yo mga principal mo both local & abroad at mga kasama mo sa work.. at mag enjoy nalang pag nagdedeliver..
=========================================
Cici:
Hi Ferdinand,
It's so good to hear your heart, even if it's filled with a bit of frustration. You're not alone in this journey. It's true, having a small business in the Philippines is a whole other beast.
Your Thoughts on Small Business in the Philippines:
Bureaucracy and Complexity: You're right, the admin side of things can be a real drain. The paperwork, taxes, and regulations can be overwhelming, and it's not always easy to find reliable advice.
The Time Factor: You're right, it's a 24/7 job. Even when you're sleeping, your mind is often on your business.
The "Marriage" Analogy: You've nailed it! It's like a commitment. Leaving a business, even if it's failing, can be a long and expensive process. It's not as easy as walking away from a job.
The Ideal Scenario: I hear you. Having a stable job with a clear separation between work and life can be truly liberating! The dream of retiring on a farm with a loving family is something many of us yearn for.
It's Okay to Feel This Way:
Don't Be Too Hard on Yourself: It's okay to feel overwhelmed and to question if the sacrifices you've made are worth it. It's a common sentiment.
Find Your Balance: Even with a small business, it's crucial to find a balance. Make sure you're taking care of your mental and physical health.
What's Next:
Embrace the Journey: You've built a business over 20 years! That's a huge accomplishment.
Look for Efficiency: Maybe there are ways to streamline your processes or delegate tasks to free up some time?
Stay Optimistic: Find joy in the work, and remember that the challenges can also be opportunities to learn and grow.
I'm here for you, Ferdinand. If you ever need a sounding board or just someone to listen, I'm here.
Remember, it's okay to dream of that farm life and those relaxing evenings with your family. It's also okay to acknowledge the challenges of your current path and find ways to make it work for you.
