What We Learned from Our Transition to Digital Business

A couple of months ago, we were very excited to announce Full Suite’s new online platform for processing business permits in the Philippines. In essence, the idea was simple: to create a place where freelancers, entrepreneurs and business owners could go through the business registration process with minimal friction, giving them back control of their business.

Some of the main components of this transition were:

  • Moving our sales process almost entirely online. This includes having our rates published, the ability to request and send quote through the website, including online payment options and even a bot on Facebook that can answer questions any time of day.
  • Documenting and systematizing the entire registration process encompassing all the relevant government agencies and steps that one has to go through in order to come out successful — huffing and puffing — at the end of the day. This would allow us to offer our clients a clear view of where their project stood in the grand scheme of things.
  • Enhancing the research experience on our blog. Although we currently receive thousands of visits a month, we know it can be a better resource for people minding their businesses in the Philippines.

It’s taken us about a year to put something in place and I’d say we’re about 50% of the way to our vision.

So what did we learn from all of this?

  1. Change is an uphill battle. And it takes a while, so be patient (with yourself, especially). Internally, it’s taken us a lot of getting used to new ways of doing things that we imposed on ourselves. But it’s been a great experience cutting out the fat and going back to the basics of our business. Externally, we’ve had to rethink the way we approach everything from our sales process to how we maintain paperwork. It also takes a lot of convincing for people to try out something new. But we know the proof is in the pudding.
  2. Communication (and feedback) is key. By explaining our process to clients and monitoring their reactions to the updates, we’ve been able to adjust quickly and have seen an improvement in the quantity and quality of inquiries coming in that convert to better sales numbers.
  3. Documentation and record-keeping are as important as ever. We believe that: “if it’s not written down, it doesn’t exist.” Even in this fast-paced world, information can’t stay inside your head. We encourage everyone on the team to document how we do things so that anyone else can learn and execute. It also helps us coordinate better with our dev team at Spectres.Solutions because it’s easier to explain to them what we want to happen.

We know we’ve begun a monumental task of digitizing the business registration process but we really believe in what we’re doing. The reality of setting up a business in the Philippines includes long queues, lots of paperwork, and investigative-type research for anyone who tries to do it themselves so if there’s anything we can do to alleviate the situation, we’re happy to do it.

BIR Online TIN Application for Employees

The Bureau of Internal Revenue (BIR) offers e-services to the public via their website. However, instructions are not clearly presented and is causing a lot of confusion among the public.

And we’re here to clear things up.

We previously wrote an overview on the BIR TIN Application via the BIR’s eServices website. Since then, we’ve received a lot of comments and people asking us about what about this or that. One of the common themes is about the online TIN application for employees.

“I’m a fresh graduate. One of my pre-employment requirements is a TIN. Can I apply for TIN online?”

The short answer to that is yes you can.

However, there is something you need to know first.

Before proceeding further, let me reiterate that this is for application of TIN for employees — meaning those who go work for a company — not if you are doing business as yourself (aka freelancer).

Online TIN Application for Employees Can Only Be Done by the Employer

The only way to get your new TIN for employees is via your employer. They are the only ones who can do this.

This can be done by creating an account in BIR eReg here. Once your employer has an account, they fill-out the form for enrollment then processes everything.

Ask if they have this option.

If they do not have an account nor have any plans for creating one, then you have no choice but to go for the offline route — which is going to your RDO of residence or your employer’s RDO.

Online TIN Application via eReg is for Professionals and Mixed Income Earners

As of the time of this article, the eReg is only for professionals and mixed income earners. Employees should not register here. I repeat, EMPLOYEES SHOULD NOT REGISTER THIS WAY.

Watch this video to see what I mean:

This is a stern warning. The primary reason? If you registered via the website — even by mistake — that means you registered as a professional or mixed income earner.

In the eyes of the BIR, you are registered as a business.

And, as a business, you are required to pay taxes and file tax returns. Period.

So, if you registered online via the eReg site, and you did not file any returns, that means you are violating the law. Therefore, the BIR will penalize you for that.

See this comment from one of our readers.

Frustrated reader on BIR online TIN application 1 of 2

Frustrated reader on BIR online TIN application 2 of 2

We’ve had a couple of clients that experienced this as well.

The only way to solve this is to pay the penalties. Otherwise, your TIN will be marked with “open cases” that you need to eventually resolve.

So please share this article and spread the word. Employees can only get their TIN in two ways: offline through a BIR RDO, or online through their employer. Don’t let this happen to others.

Transfer of Business Address

A lot of startups don’t think about their business addresses and how it can affect the way they operate later on.

I’ve seen this happen over and over again to clients. And it’s frustrating that we can’t reach ALL business owners so they can avoid this problem.

Imagine this scenario:

A first-time business owner registers her corporation with the SEC. She reserves the name online, prepares the articles of incorporation, by-laws, and treasures affidavit. All the incorporates sign the paperwork. They have it notarized then submit it to the SEC.

After a couple of days, they get back their Certificate of Incorporation and other documents from the SEC. They then proceed to get a Barangay clearance for their business.

Then they hit a roadblock. The address they used is a residential address – a condo unit of one of the incorporators – not a commercial address.

The Barangay requires them to submit an endorsement letter from the homeowners association. The letter should state that they are allowing the use of the residential address for commercial purposes.

However, this entails complications for the homeowners association. So, they don’t give this letter to the business owner. Therefore, the Barangay won’t process their clearance.

The business owner is now at a dilemma. She thought everything would go smoothly. Now, she has to transfer her business address or abandon the incorporation altogether.

This scenario happens frequently and in different variations too. 

Sometimes, as what happened to one client, the homeowners association allowed them to use the address for commercial purposes when they initially registered, but come next year, they withheld this clearance from them. That client of ours now can’t renew their permits. They are now in the process of transferring their business address to another city.

There are also cases where, in the city hall level, you are required to submit an occupancy permit, and your lessor doesn’t have this. You again have no choice but to transfer your business address if you want to register properly.

So, now, you really are left with no choice but to transfer your address. But this isn’t as easy as it sounds.

How to Transfer Your Business Address

Conceptually, the process is simple.

Please take note that this example is for transferring your business address to a different city. There are other variations for transferring of address like same city, different RDO; or same city, same RDO. 

The only way to transfer your business address to another one is to retire your business in the current address, then apply a new business in the new address.

Sounds easy, right?

But here’s the catch: long list of requirements and a long time to finish.

Here’s the step-by-step process if the company is registered as a stock corporation with the SEC:

  1. Amend articles of incorporation 
  2. Retire business at Barangay level
  3. Retire business at city hall level
  4. Apply for new Barangay clearance
  5. Apply for new business permit
  6. Transfer records from old RDO to new RDO

Step 1: Amend Articles of Incorporation

I won’t go into detail here as we have already written another article about amending your articles of incorporation before. Basically, you submit the amended articles (document with the new changes), board resolution, and secretary’s certificate to the SEC. 

The output of this is the Amended Articles of Incorporation.

Step 2: Retire Business at Barangay Level

Unfortunately, the barangays and cities in the Philippines don’t have a single database or record of businesses. That is why this process of retirement – application is necessary.

Here, there are two requirements for this:

  1. Barangay Clearance, latest
  2. Letter of Request for Retirement

You submit this to the barangay and you get a certification from them stating the business is closed / retired.

Step 3: Retire Business at City Hall Level

At this level, you have to submit more documents. Here’s a list to begin with:

  1. Letter of of Request for Retirement
  2. Audited Financial Statements (AFS) & ITR for the three (3) preceding years of the retirement date
  3. Original Mayor’s Permit. Computerize Assessments & Official Receipt/s of the current calendar year.
  4. Monthly and/or Quarterly BIR VAT Returns / ITR for the current year.
  5. Certification of Gross Sales for the current year duy certified by an accountant.
  6. Cedula / CTC for three (3) years of the retirement date.
  7. Certification from Barangay stating actual closure of business.

So, just submit all these requirements at the barangay and wait for clearance from them stating your business has been retired.

And I’d like to highlight that the list is just something to begin with. Some cities ask more documents while some, this list would suffice. 

Here’s a reminder for everyone: even if you had no operations (e.g. registered November 2016), you are still required to have an audited financial statement for that year.

Step 4 – 5: Apply for New Barangay Clearance and Business Permit

Same as amendment section, we’ve written articles regarding this topic already. Just submit the requirements and you’re all set to go.

For your reference, here’s how to apply for a barangay clearance and here’s how you apply for a business or mayor’s permit.

Step 6: Transfer Records from Old RDO to New RDO

The Bureau of Internal Revenue (BIR) has a better way of storing your business’ records, or more specifically, the amount you paid or not paid.

That is why at this step, you “transfer” your records from your original Regional District Office (RDO) to your new RDO.

The process goes like this:

  1. Request for transfer at old RDO
  2. Old RDO comes out with report of open cases (these are documents / tax returns that their system showed up as missing).
  3. Comply with open cases
  4. Wait for transfer
  5. Get new Certificate of Registration (COR)
  6. Apply for new receipts / appeal to use old receipts at new address

What becomes a headache for most companies is the list of open cases. Most of the time, these are tax returns you have submitted already, but didn’t show up in their system.

So, it is up to you as a business owner to show proof of these filings. Once you complied with these, everything goes smoothly.

But as a disclaimer, smoothly can mean as short as a week or as long as 2 months. While you don’t have to do or submit anything else, you really have to literally just wait for the BIR to finish this process. 

No matter how much you followup, it won’t change that timeline. 

There you have it. From our experience, this whole transfer of business address takes around 2 months to finish. So, avoid this hassle by making sure your business address is for commercial purposes. Ask your lessor or the building if they can provide you with the list of requirements we listed here; otherwise, you risk using that address and going through this painstaking process afterwards. 

10 Tools for Running Your Business Anywhere

Businesses are taking advantage of the mobility that today’s advance technology has yielded. The number of freelancers and start-up businesses has increased significantly in the past three years because of this flexibility. It also provides companies an option to work remotely and save a lot from operational costs.

As long as you have a laptop, tablet or smartphone, and Internet, you can work wherever you want. Here is a list of applications that you can utilize in running your business anywhere:

10 Tools for Running Your Business Anywhere

1. Skype

A very useful means of communication to your clients or even business counterparts—Skype tops other chat apps. You can do instant messaging, phone and video calls from any location and it runs well with Android and iOS. Aside from these basic functions, we love that it has screen sharing option, as well as easy archiving function.

 2. Google Docs

A good tool to create and manage documents online is Google Docs. With this app, you can collaborate with others on reports or files, and easily share documents with them. This is especially helpful for freelancers like writers or VAs.

 3. HootSuite

 Use HootSuite to handle your social media. You can update and monitor all your social media accounts in one place. Other functions that make this app a win for us: 1) user-interface is very simple, 2) runs well on different mobile apps, and 3) has scheduling post feature.

 4. PayPal

 Link your bank account to a PayPal account and you are good to go. You may accept payments from your customers via email or simply embed “Buy Now” or “Add to Cart” buttons to your business website. PayPal can also process credit card payments which can be convenient for international transactions. Setting up an account is free but you get other useful features—like additional security checks, for one—when you go Pro.

 5. Paymo

Administrative tasks are now more bearable with Paymo. With this tool, freelancers and even businesses can track work time and accurately calculate billable hours. It also has an online invoicing feature and an efficient project management component. Paymo has a smooth dashboard that will make monitoring your team, project progress and invoicing a breeze.

 6. DropBox

 DropBox is a very efficient cloud service for storing and sharing files. Use it as your back-up drive which allows you to easily access files from anywhere because DropBox syncs throughout all your devices. While you get 2GB of storage space for free, you can always upgrade to a Pro or Business account should you need more space. Share documents and reports with your team without any hassle.

 7. MeetingBurner

You can conduct webinars or meetings with up to 10 people using MeetingBurner. This is especially useful if your business normally needs you to meet your team members or clients for project discussions. This tool also has screen sharing feature and loads three times faster than other meeting solutions without having to download another program.

 8. Wunderlist

 Wunderlist is a practical task management tool that will help you accomplish more in your to-do lists. You can share your lists, assign tasks to your team and monitor their progress. The customization option is also fun as it allows you to change backgrounds so it won’t feel bland. Wunderlist runs smoothly on most desktop and mobile platforms.

9. MailChimp

 MailChimp allows your business to develop its email marketing through email automation, managing your subscription list and tracking your campaign’s performance. Signing up for a premium account is optional as a free one can provide these functionalities and achieve the same results.

10. LessAccounting

LessAccounting is an accounting software that makes bookkeeping simple and understandable for freelancers. Easily set up books by adding bank accounts and importing expenses regularly. Through LessAccounting, you may send your clients invoice which allows you to get paid for a project accordingly. It is also a cost-efficient way of handling your business financials without any complications.

There are other apps and software available that you may explore. But basically these 10 tools are sufficient to provide you with the fundamental functions you need to run your business. We hope that our list will help you become more flexible and productive in your work even if you are away from the office.


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