Recordkeeping Requirements: What the SEC and BIR Expect

Recordkeeping is the least glamorous part of running a lending company and the most consequential when something goes wrong. Every SEC report, every BIR return, and every audit is only as good as the records behind it — and when an examiner or the BIR comes asking, "we didn't keep that" is the worst possible answer. This guide covers what you must keep, for how long, and why organized records are your best protection.

Books of accounts

At the foundation are your registered books of accounts. The BIR requires businesses to maintain books — whether manual, loose-leaf, or computerized — and to register them. For a lender, these books capture your journals and ledgers: the Cash Receipts Journal, Cash Disbursements Journal, General Journal, and General Ledger that record every peso in and out. These books are the source from which your financial statements and tax returns are built, and the BIR can demand to inspect them.

Loan and collection records

Beyond the accounting books, a lender must keep detailed loan and collection records: the loan documents and promissory notes, the amortization schedules, and — crucially — the record of every payment received, with its date, amount, and how it was applied. These are what let you prove a borrower's balance, support your income, and demonstrate your Portfolio-at-Risk to an examiner. A lending business that can't produce a clean payment history for a disputed loan is in a weak position both commercially and legally.

Official receipts and supporting documents

The BIR is strict about official receipts and invoices. You must issue registered receipts for your collections and keep copies, and you must keep the supporting documents behind your expenses — because an expense without proper documentation can be disallowed as a deduction. For a lending company, this means retaining the paper trail behind both your income (receipts to borrowers) and your deductions (supplier invoices, and the withholding on them).

An expense you can’t document is an expense the BIR can disallow — turning a legitimate cost into extra taxable income. Documentation isn’t bureaucracy; it’s money.

How long to keep records

Records must be retained for the period the BIR prescribes, which spans several years — long enough to cover the period during which the BIR can still examine and assess you. The safe practice is to keep records for at least the full retention period, organized so any transaction can be reconstructed. Destroying records too early is a serious mistake: if the BIR audits a year for which you have no records, you cannot defend your figures.

Manual, loose-leaf, or computerized books

The BIR allows businesses to keep their books of accounts in one of three forms, and a growing lending company should understand the trade-offs. Manual books are handwritten ledgers — cheap and simple, but slow, error-prone, and impractical once you're processing dozens of transactions a day. Loose-leaf books are computer-generated pages printed and bound, offering a middle ground. Computerized books of accounts (CBA) use accounting software, which is the natural fit for a lender at any real scale — but note that computerized systems typically require the BIR's permit or registration, so you can't simply switch to software without the proper approval.

For a lending company, the volume and complexity of transactions push strongly toward computerized books: reconciling a loan portfolio, tracking collections with their allocations, and producing alphalists by hand is punishing and mistake-ridden. The key compliance point is to handle the registration correctly — registering your chosen bookkeeping method with the BIR and obtaining any required permit for a computerized system. Whatever form you choose, the underlying obligation is the same: complete, accurate, registered books from which your statements and returns are built. The form only affects how painful maintaining them is.

Records that keep themselves

The surest way to meet these requirements is to have records that are complete and organized automatically. When every loan release and collection is captured with its full detail as it happens, your books, loan records, and payment histories are always current and retrievable — nothing to reconstruct, nothing missing. LendKoPH keeps your loans, collections, books, and vendor records together and current, so when the SEC or BIR asks, the records are already there, organized, and complete.