Is Your Company CAS Compliant? Here’s What You Need to Become CAS Ready

CAS stands for “computerized accounting system,” a requirement that the Philippines’ Bureau of Internal Revenue (BIR) demands of large taxpayers. Becoming CAS compliant means integrating accounting components so that a company can manage its own set of computerized accounting books, records, and documents.

The company will then need to register its system to the BIR and pass its computerized accounting books and records to the agency soon after the taxable year has ended. Using a CAS that’s not authorized by the BIR will incur a steep penalty for the taxpayer, which ranges within the tens of thousands of pesos for the first offense.  

But even if having a BIR CAS compliant system wasn’t in the picture, it would be par for the course for bigger businesses to modernize their accounting systems. That’s because every time a business grows, its accounting processes are sure to get more complicated. This is because there’s more money involved, more clients to manage, and more granular-level accounting decisions to oversee.

If your business is starting to expand, you may think it a logical decision to wean your staff off of manual accounting processes and to invest in computerized systems. Having access to automation technologies and a single source of truth for all accounting data will surely make your accounting processes speedier, more efficient, and more up-to-date. The same modernization efforts will also shear down your expenses due to human error, such as by making it easier for your staff to spot data entry mistakes that would otherwise result in BIR penalties.

However, your goal shouldn’t end at computerizing your accounting systems. You should also aim to be CAS compliant as soon as possible. To ensure that your accounting modernization processes are in line with BIR’s rules on CAS, here’s what your company needs to do.

Learn about the Different Components Involved in CAS

The first thing that business owners need to know about the computerization of their accounting systems is that it won’t be a one-off affair. In order to produce CAS-compliant accounting books and computer-generated accounting records, your company will need to sync up different components in your existing systems.

According to the rules of CAS, the four components that need to be synced up are the following:

• Your general journal and all other subsidiary records that your accountants deal with.
  
• The accounting records that comprise your sales book, inventory book, purchases book, accounts receivable and accounts payable books, payroll ledger, subsidiary ledger, and the like.
  
• Application systems that generate your company’s official receipts, invoices, cash vouchers, billing statements, and other entries for your subsidiary ledger.
• The point of sale (POS) system and/or cash register machines (CRM) that are linked to your computerized accounting system.

Thus, the very first step to becoming CAS compliant will involve taking stock of the various components that will be included in your modernization. Once you understand which components are included in your CAS ecosystem, the dual processes of registering your CAS and rolling out the same CAS in your company will be a lot less difficult on your end.

Find the Right Computerized Accounting Solution for Your Business

The second step to achieving CAS compliance is deciding on which computerized accounting solution to use for your business. There are several viable solutions on the market, but you will want a system that matches the needs of your business. The ideal computerized solution should be a good fit for your company’s size and for the work it does in its home industry. It should also be scalable in case you anticipate major growth for your business. 

One computerized accounting solution that’s been widely adopted by Filipino businesses is the flexible, easily configurable, and user-friendly  SAP Business One. SAP Business One acts as an all-in-one business software solution, and it comes with project management and enterprise resource planning (ERP) modules as well as accounting and finance modules. With it, you’ll be able to manage your sales, banking, inventory, and human resources tasks from a digital platform on top of your BIR-compliant accounting processes. Consider a solution like SAP Business One to improve accounting, regulatory compliance, and other key aspects of business’s management.

Register Your Company’s CAS at the BIR

The third step to become CAS compliant is to register your chosen system at the BIR. BIR mandates that all computerized accounting systems used by large taxpaying businesses be registered with the agency, mainly for the purpose of streamlining tax audits.

Before the COVID-19 pandemic struck, registering a CAS at the BIR involved securing accreditation from the agency, scheduling a system demonstration of the chosen CAS, and working out additional compliance issues with the BIR’s designated oversight body before earning an official Permit to Use (PTU). But in January of 2020, BIR streamlined its own processes with the release of Revenue Memorandum Circular (RMC) No. 10-2020. This directive cut down the timeline of registration to a mere three working days and lessened the number of documentary requirements that businesses needed to pass.

RMC No. 10-2020 was not the only circular that the BIR released in order to relax its CAS registration requirements. In December of 2020, the agency issued RMC No. 5-2021. This memorandum circular categorically removed the need for businesses to secure a PTU. All the same, even if a PTU is no longer needed from the BIR, a large taxpayer is still required to register its system with the agency.

The exact guidelines for registration may change in the coming years, but your company must always keep track of them. Ask the agency for its CAS compliance checklist so that you know whether your solution adheres to the BIR’s standards.

Orient Your Staff About Your New Computerized Accounting System

The last and perhaps most difficult step to achieving BIR CAS compliance is to operationalize the new system within your company. You and your staff may already know how much of a difference the modernized accounting system will make. But that doesn’t mean that you’ll be exempt from the growing pains of familiarizing yourselves with new computer technologies.

It will be a good idea to hold a formal orientation with your staff and your CAS vendor. During your first few months of acclimatizing to the system, encourage your staff to report initial difficulties and to request for additional IT support when they need it. Give yourselves ample time to learn your way around the system and to prepare the requisite CAS-compliant documents on it, like your tax reports.

Accelerate Your BIR CAS Compliance with ANSI

ANSI Information Systems is an ideal partner for both CAS implementation and CAS compliance. We’ve got decades’ worth of experience when it comes to working with Filipino companies, and we are very proficient at customizing information systems according to what each individual company needs. To know more about the quality of our work and about the businesses we’ve helped, you can read ANSI’s customer testimonials.

Our expertise includes rolling out BIR-compliant computerized accounting systems like that of SAP Business One. We’ll make sure that your new computerized system is integrated smoothly into your company’s workflow. In addition, we’ll help you tick all the boxes for BIR compliance. Earn the BIR’s seal of approval and future-proof your accounting processes at the same time. Contact ANSI now, and choose us as your implementation partner for a BIR-compliant CAS.