Business Owners’ Guide to Outsourcing Bookkeeping and Taxes

Outsourcing bookkeeping and tax filing is one of the smartest decisions a business owner can make – especially with the many BIR deadlines, monthly filings, and financial reports required in the Philippines. With the right bookkeeper, the process becomes easier, more accurate, and more compliant.

But outsourcing also requires trust. Before handing over your books – or your tax payments – you must know exactly what to look for. This checklist ensures you make an informed, safe, and strategic decision.

1. Clarify the Scope of Work
2. Understand Their Tools and Technology
3. Verify Their Expertise in Philippine Tax Compliance
4. Ask About Monthly Deliverables
5. Check Their Communication and Turnaround Time
6. Make Sure They Provide Proof of Tax Payments and Government Contributions
7. Evaluate Data Security and Confidentiality
8. Confirm Their Pricing Structure
9. Check Their Experience With Your Industry
10. Review Their Track Record and Credibility
11. Final Thoughts + Bonus Tips
    • Work With Your Bookkeeper, Not Against Them
    • Plan for Continuity – No Bookkeeper Stays Forever

1. Clarify the Scope of Work

Not all bookkeeping services provide the same tasks. Identify what is included so expectations are clear.

Typical scope includes:

• Monthly bookkeeping
• Bank, cash, and e-wallet reconciliation
• Monthly, quarterly and annual BIR filings
• EWT (Expanded Withholding Tax) monitoring
• VAT or Percentage Tax
• Year-end tasks: 1604C, 1604E, 1701 or 1702RT, Alphalist, annualization

It’s best to review your bookkeeper’s scope of work and check if it covers all the tax forms listed in your BIR Form 2303.

Below are services that are not typically included in standard bookkeeping engagements, but may be offered under a separate agreement:

• Payroll processing
• Business permit renewal
• Answering LOA or other BIR letters
• Audited financial statements (AFS) for year-end reporting

For businesses required to submit Audited Financial Statements (AFS), it’s important to understand that your bookkeeper cannot be the same party who performs the audit. Philippine regulations require independence between the party preparing the books and the CPA who signs and audits the financial statements. This is because an auditor must remain impartial and must not audit their own work. Your bookkeeper usually prepare all books, trial balances, and supporting schedules ahead of audit season so that the independent auditor can complete the AFS efficiently.

A clear scope prevents gaps, hidden fees, or misunderstandings later.

2. Understand Their Tools and Technology

Good bookkeepers use modern, secure tools – not outdated spreadsheets.

Ask these questions:

• Do you use cloud accounting software?
• Do you provide a dashboard or portal for financial reports?
• How will I submit receipts and documents?
• Where is my data stored and backed up?

Better tools mean faster work, fewer errors, and clearer visibility.

3. Verify Their Expertise in Philippine Tax Compliance

Philippine tax rules can be complex. Your bookkeeper must know the local requirements well.

Look for experience in:

• VAT/Percentage Tax
• Expanded Withholding Tax
• Filing 2551Q, 2550Q, 1701Q or 1702Q, 1702RT and other forms applicable to your business
• Annualization
• Alphalist submissions
• TRAIN Law regulations
• Filing via eBIRForms or eFPS

If a bookkeeper cannot clearly explain these, consider another provider.

4. Ask About Monthly Deliverables

A professional bookkeeper should provide consistent monthly reports.

Expect these:

• Financial Statements (FS)
• Cash flow summaries
• Aged Receivables & Payables
• Reconciled books
• Filing deadlines and reminders
• Summary of submitted BIR forms

Monthly deliverables keep you informed and audit-ready.

5. Check Their Communication and Turnaround Time

Communication is a crucial factor in outsourcing success.

Verify:

• Their response time (SLA)
• Monthly update schedule
• Document submission cutoffs
• Availability during tax deadlines

You need a bookkeeper who is responsive and proactive – not someone who disappears at filing time.

6. Make Sure They Provide Proof of Tax Payments and Government Contributions

This is one of the most important items business owners must check.

Some bookkeepers in the Philippines offer to pay taxes and government contributions (BIR, SSS, PhilHealth, Pag-IBIG) on behalf of clients. The business owner transfers the money → the bookkeeper is supposed to pay.

But here’s the danger:
There are cases where unethical bookkeepers keep the money and do not file or remit anything. The business later discovers unpaid taxes, penalties, and huge arrears.

To protect yourself:

ALWAYS require official proof of payment and submission.

Ask for:

• BIR confirmation receipts or eFPS acknowledgment
• Online banking, Maya or MyEg payment receipts
• Official filing acknowledgment for monthly and quarterly returns

and the following if payroll service is included

• SSS R3/PRN validated payments
• PhilHealth confirmation pages
• Pag-IBIG Virtual Pag-IBIG payment confirmations

Watch for red flags:

• Delayed proof of payment
• Only sending screenshots, not the official PDF/receipt
• Asking for lump-sum “tax funds” without breakdown
• Avoiding access to BIR and government portals

Best practice:

Whenever possible, pay taxes and contributions directly using your company’s own online accounts. A trustworthy bookkeeper will guide you, but they won’t insist on handling your money.

7. Evaluate Data Security and Confidentiality

Your financial data is sensitive and must be protected.

Look for providers who use:

• NDAs
• Secure file-sharing platforms
• Limited-access systems
• Encrypted backups

Avoid bookkeepers who store files on unsecured personal devices or random cloud folders.

8. Confirm Their Pricing Structure

Bookkeeping fees vary depending on transaction volume and business complexity.

Ask for transparency about:

• Monthly retainer vs per-form pricing
• Cleanup fees for messy books
• Charges for amendments or corrections
• Additional fees for year-end reports
• Consultation or advisory charges

Clear pricing prevents surprises.

9. Check Their Experience With Your Industry

Each industry has unique accounting needs.

Examples:

• Ecommerce: marketplace fees, shipping, digital wallet transactions
• Restaurants: inventory, COGS, spoilage accounting
• Construction: progress billing and retention
• Freelancers: deductible expenses and OR tracking
• Retail: POS integration and inventory cycles

A bookkeeper familiar with your industry can save you from costly errors.

10. Review Their Track Record and Credibility

Always verify the bookkeeper’s background.

Check:

• Online reviews
• Testimonials from SMEs
• Years of experience
• Certifications and training
• Referrals from business networks

A strong track record suggests reliability and trustworthiness.

Final Thoughts + Bonus Tips

Outsourcing bookkeeping and taxes can simplify your operations, reduce stress, and help you stay compliant – but only if you choose the right partner. This checklist helps you evaluate bookkeepers thoroughly, avoid common pitfalls, and protect your business from mismanagement and financial risks.

Work With Your Bookkeeper, Not Against Them

Even the best bookkeeper cannot perform well without your cooperation. When your bookkeeper or tax preparer asks for receipts, invoices, bank statements, payroll records, or supporting documents, provide them immediately. These requests are not an inconvenience – they are signs that your bookkeeper is actively maintaining your accounts and preparing ahead of deadlines.

Delays in giving documents can lead to:

• rushed filings
• inaccurate reports
• penalties and surcharges
• missing data during annualization
• avoidable amendments

Timely cooperation ensures accurate books, smoother compliance, and better financial visibility.

Plan for Continuity – No Bookkeeper Stays Forever

One reality many business owners overlook is continuity of service. No matter how good a bookkeeper is, they will not be with your business forever. They may resign, change careers, migrate, get overloaded with clients, or you may eventually need a more experienced accountant as your business grows.

When that moment comes, you should be able to transition smoothly – without losing records, BIR filings, receipts, or accounting data.

To protect your business:

• Ensure your bookkeeper keeps all proofs of filing in organized folders
• Require digital copies of tax forms, summaries, and reports
• Never allow your financial data to be stored only on their personal device
• Ask where and how your documents are backed up
• Make sure you can access your own data anytime

This is where cloud-based accounting software like MPM Accounting becomes extremely valuable. When all documents, receipts, filings, and ledgers are stored in a secure system that you own – not your bookkeeper – it becomes much easier for a new bookkeeper to take over seamlessly.

Cloud-based software ensures:

• All tax forms are stored safely
• All financial reports remain accessible
• Audit trails are preserved
• No need to rebuild books from scratch
• Faster and cleaner transition to a new accountant

Continuity isn’t just about convenience – it protects your business from being dependent on a single person.

With the right outsourced partner – and with proactive cooperation on your end – you gain peace of mind, accurate financial reporting, and more time to focus on what truly matters: growing your business.