TAX PAYERS SHOULD DEAL WITH ACCREDITED TAX PRACTIONERS ONLY

 The Bureau of Internal Revenue's campaign for increased tax revenues posted as well an increased in opportunities for taxpractioner or tax agents.  These practioners may either be licensed accountants (CPA) or  mere but experienced bookkeepers.  Due to the proliferation of erring practioners, the BIR issued a reminder to the taxpayers in their dealings and choice of tax handlers.  The BIR , in its media release, published its press reminders which I am sharing to all taxpayers.

BIR asks taxpayers to deal only with Accredited Tax Practitioners and AgentsBIR asks taxpayers to deal only with Accredited Tax Practitioners and Agents

Quezon City, 05 August 2011 – As part of its Public Assistance and Awareness Campaign,

the Bureau of Internal Revenue (BIR) today advised  taxpayers to deal only with BIR Accredited

Tax Practitioners and Agents in regard to their transactions with the tax agency.

Deputy Commissioner Nelson M. Aspe said that taxpayers must see to it that the person

they appoint or designate as representative in any transaction with any BIR office must be duly accredited by either the tax agency’s Revenue National Accreditation Board or by the Revenue  Regional Accreditation Board.

Under Revenue Regulations No. 11-2006 as amended by Revenue Regulations Nos. 4-

2010 and 14-2010, “only Tax Agents/Practitioners, Partners or Officers of General Professional

Partnerships, or Officers or Directors of Corporate entities engaged in tax practice who have been

issued certificate of Accreditation or ID card shall be allowed to represent a taxpayer or transact

business with the Bureau of Internal Revenue in representation of a taxpayer.”

Once accredited by the BIR, ”The Commissioner or his authorized representative 
shall consider as valid document/attachments to tax returns, information returns
or other statements or reports required by the Code or Regulations, the financial
statements prepared, signed and
certified by duly accredited tax practitioners.”
Deputy Commissioner Aspe warned that if taxpayers are represented by tax practitionersand agents not accredited by the BIR, the latter may have to bear certain consequences,including inconvenience and wasted time and effort.
“The BIR can refuse to transact official business with such tax practitioners and shall
require that certain official statements such as returns, financial statements, reports, protests,
requests for ruling, official correspondence and other statements, paper or documents filed on
behalf of a taxpayer be signed or certified to by accredited persons which shall bear, among
others, the following information below the signature of the latter: Taxpayer Identification
Number; BIR Accreditation Number, Date of Issue, and Date of Expiry; and PRC CPA License
Number or Attorney’s Roll Number, and proof of compliance on the Mandatory Continuing Legal
Education (MCLE) for lawyers, as the case may be,” Deputy Commissioner Aspe added.(reytdlc)
-30-
        (original signed)
Please refer to: REYMARE T. DE LA CRUZ, Chief, TIED, 9243245
             (original signed)
Approved for release: NELSON M. ASPE, Deputy Commissioner of Internal Revenue 
(taken from MEDIA RELEASE BIR)
ftp://ftp.bir.gov.ph/webadmin1/pdf/pr60aug0511.pdf


WHAT MUST A TAXPAYER DO?

To assure that your tax agent is  a BIR accredited practioner, you may ask for their credentials like BIR Accreditation ID and BOA Certificate as additional credentials for auditors.

10 common bookkeping errors

10 common bookkeping errors

by Henry Ong

Keeping your books in tip top shape is the first step to financial health

All businesses, whether sole proprietorships, partnerships or corporations, must pay attention to bookkeeping because it is an indicator of a company’s financial health and profitability.
Bookkeeping errors could spell doom, while books in tip top shape would give one a clear picture of a business’s fiscal situation.
The following are common bookkeeping mistakes an entrepreneur would do well to avoid:

• No reconciliation of bank transactions. Small business owners often run their accounting on cash basis, where cash movements are regarded as indicators of profitability. They monitor actual cash collections and disbursements but do not reconcile transactions the bank makes to their account, such as unrecorded charges, overdrafts, interest income or expenses, and bounced checks.
The consequence of this is inaccurate cash balances on record.

• Failure to reconcile receivables with returns and withholding taxes. Do not confuse credit memos with sales returns and discounts, as well as creditable tax the customer had withheld, because it would result in an overstated accounts receivable balance.
It may also cause an embarrassing situation where the cashier demands payment from a customer who has already paid.

• Misclassification of accounts. Accounting records without proper account titles tempt the bookkeeper into placing similar expenses under one account. For example, transportation, personal meals, and meeting expenses are booked under representation expense account when this could be properly classified under three different account titles.
Doing so would lead to exaggerated representation expenses that could exceed the allowable limit set by the Bureau of Internal Revenue, and decreasing expenses while increasing taxable income.

• Recording prepayments and deposits as expenses instead of assets. A good bookkeeper should know when an item should be expensed or capitalized. Examples of capitalized items are rental deposit, business permit and fire insurance payments, and advances for a store space.
(Some bookkeepers automatically record these as expenses received during the month instead of recording them as assets.) This would overstate the total operating expenses while understating net income if these items were booked as expenses during the month.

• Forgetting to set up accounts. This normally happens in transactions involving withholding taxes from the total amount payable to the supplier. An example of this is a franchisee paying his franchiser royalty fees. The franchisee’s bookkeeper may have properly withheld the corresponding tax on the royalty payment when he filed the remittance form with the BIR.
But when she recorded the withholding tax, she might have forgotten to set up the account under payables, thereby erroneously creating a negative balance in the book, which would be misinterpreted as an overpayment.

• No monitoring of petty cash fund. Improperly monitored petty cash transactions usually end up unrecorded in the books at the end of an accounting period. To avoid an unbalanced fund, one must set a fixed amount for petty cash fund and replenish it every time it runs out.
The bookkeeper records and classifies the expense transactions while topping up the petty cash.

• Failure to monitor liquidation of advances. The Employee Advances account is considered one of the most abused accounts, as borrowers usually fail to account for their disbursements on time. A policy should be put in place where advances are settled after a certain number of days.
Let’s say in three day’s time, all expenses made must be accounted for and any excess returned. If not, deduct the unsettled advances against the employee’s salary.

• Incorrect supporting papers. Mistakes usually occur on the dates of purchase orders, delivery receipts, and receiving reports, resulting in delays in expense reporting.

• Forgetting to track reimbursable expenses. Out-of-pocket expenses where personal credit cards or checks are used should be reimbursed. Otherwise, it would overstate one’s income in the books.

• Lack of communication. A business owner must inform his bookkeeper of transactions that could significantly change the way they are recorded in the book. An example of this would be a verbal write-off of an account receivable from a customer in exchange for the latter’s services.

One surefire way to avoid committing these mistakes is to have a good grasp of sound bookkeeping practices. One can hone his skills by attending seminars, taking short bookkeeping courses, or getting international professional certifications like the Certified Bookkeeper Program. Bookkeepers, on the other hand, must also keep abreast of the latest tax laws and practice, because as they always say, no transaction ever takes place if it’s not on paper.

I find all these suggestions very helpful for business owners.  In my individual practice, I frequently encountered the deficiencies in bookkeeping even in a corporation set up,  resulting to misleading financial statements and erroneous filing and payment of taxes.  These tax errors subsequently resulted to  payment of penalties and fines .


Henry Ong is a certified management accountant in Australia and a registered financial planner in the United States. He is president and chief operating officer of Business Sense Inc., a financial advisory and consulting services firm that helps small and medium businesses (www.businesssense.com.ph).You may reach him at hong@businesssense.com.ph.
originally published in  
http://www.entrepreneur.com.ph

Where to register your small business enterprise?

www.flickr.com/photos/13286453@N00/4850823449

Starting a business is sometimes confusing to newbie enterprenuers in terms of giving their business its legal and juridical personality.  Very small business initially has no budget to hire  business consultant who could guide them through licensing and registration requirements.  Most are confused on the functions of the Security and Exchange Commissions (SEC) as differentiated from the functions of  the Department of Trade and Industry (DTI).  Nevertheless,  all businesses need to be registered somewhere for purposes of regulation and monitoring. A duly registered business is empowered to  transact legal business and own properties . They can also sue and can be sued.

Here are the simplified guide to help you differentiate  the  functions that fall under  the DTI and the  SEC:

Simply and directly stated, corporations and partnership must register with SEC while sole proprietorship must register with DTI.

The SEC 

The SEC  has absolute jurisdiction, supervision and control over all corporations. This  practically implies that complaints involving corporate violations  should be filed with the SEC.

Only a partnership or a corporation registered with the SEC may use the words “company” or “corporation” as part of its business name.

The registration mentioned above is different from registration with the Bureau of Internal Revenue, which is a separate requirement, is applicable to all types of businesses, and is for the purpose of monitoring compliance with tax laws. 

 (visit SEC site here : www.sec.gov.ph or iregister.sec.gov.ph)

The DTI

In addition to its regulatory power, the DTI, through its different bureaus, is also tasked with receiving and processing applications for business name, trademarks and patents.

Thus, while for purposes of acquiring a legal personality, a corporation is required to register with the SEC and not with the DTI, it will nonetheless be still required to register its business name and style, if any, with the DTI.

Finally, the DTI is mandated to receive and process applications for trademarks and patents. If a corporation wants to apply for trademarks or patents, then it will again have to go to the DTI for these purposes.

(visit DTI site here: www.dti.gov.ph or www.bnrs.dti.gov.ph)

http://www.flickr.com/photos/51035600360@N01/3618677534

For your peace of  mind, always be rules and laws compliant. 

Small Business (important links)

We have collected and chosen important links which are informative and can be helpful in doing  your business ventures.  Please check  them as listed hereunder:

How to register your business:

http://www.mixph.com/2006/03/steps-to-register-your-business.html

 For business tax requirements and compliance :

http://alpellas.com/philippine-tax.html

For free sample of  legal forms and contracts:

http://legal-forms.philsite.net/

Philippine Legal Forms is the site to find the basic formats of standard and frequently used legal forms, contracts and agreements in the Philippines.

All Philippine legal forms and contracts on this website are free for site visitors to copy and revise for single use. Written permission is required for re-publication in print or any other media.

To copy a sample free legal form, contract or agreement, on this site, highlight the whole document, right click, then copy and paste on MS Word or Notepad.

It is strongly recommended that you consult a lawyer and have a customized document drawn to suit your requirements. All legal forms in this site are meant for reference only. Always seek legal advice before entering into any contract, agreement or executing any legal document.

To start a microbusiness and other business guides:

http://www.pinoybisnes.com/business-ideas/how-to-start-a-microlending-business/

Here are some of the websites that are offering Facebook Fan Page Welcome Tab Creator application.  Facebook fan page is an effective marketing tool so you might as well have one. Check the links:

• www.northsocial.com
• www.pagemodo.com
• www.likeable.com
• www.involver.com
• www.vitrue.com
• www.hyperarts.com
• www.feedmyapp.com
• www.sayitsocial.com     

If you are stuck as to what business to get into, Ms Small Business  listed 365 business ideas  in its website, here is the link to that:

http://www.ms-small-businesses.com/365smallbusinessideas.html

Should you need professional assistance on  your business facebook fanpage, business registration requirements, accounting, bookkeeping and preparation of financial statements, just contact us.

Business Ideas

Before seriously considering going into a small business, I believe first,  you need to think about what you love to do, what do you want to do most,  your passion.

Having  your own business  will demand too much not only in terms of  time spent but it involved doing things you don't like doing at all.  At least that's how it is at the start until the time all systems are established and working.


That is why it is important that your business is  your passion, otherwise you might not last long and easily fold up  in a year or two.

There are 365 business ideas listed in Ms Small Business website, here is the link to that
http://www.ms-small-businesses.com/365smallbusinessideas.html 

http://cartandkioskphotos.com/?cat=11

http://petalcorin.blogspot.com/2009/10/directory-of-dormitories.html

                             http://my_sarisari_store.typepad.com/photos/uncategorized

                                             /2007/04/06/dsc_0266ccc.jpg

http://www.sulit.com.ph/index.php/view+classifieds/id/3097676/Immediate+hiring+massage+therapist

Small Business is an Answer to Poverty

Business , business, business. . If  only everyone had  a business of their own, no matter how small, that will mean a lot of difference  in the lives of the Filipinos.  Small business creates income for the owner and in return gives jobs to many people.  This thus creates a cycle for survival.   No matter how small, each of us, specially those who are not employed should create a small business.

http://www.flickr.com/photos/54009788@N00/3956090230