ACCOUNTING FOR PAYROLL AND PAYROLL DEDUCTIONS AT THIEN UNG SERVICES TRAINING COMPANY LIMITED

ACCOUNTING FOR PAYROLL AND PAYROLL DEDUCTIONS AT THIEN UNG SERVICES TRAINING COMPANY LIMITEDACCOUNTING FOR PAYROLL AND PAYROLL DEDUCTIONS AT THIEN UNG SERVICES TRAINING COMPANY LIMITEDACCOUNTING FOR PAYROLL AND PAYROLL DEDUCTIONS AT THIEN UNG SERVICES TRAINING COMPANY LIMITEDACCOUNTING FOR PAYROLL AND PAYROLL DEDUCTIONS AT THIEN UNG SERVICES TRAINING COMPANY LIMITED

TRAINING COMPANY LIMITED

Major : English for Finance and Accounting Student code : 165D2202010048

Supervisor : MSC Cao Phuong Thao

Ha Noi - 2020

I guarantee that this thesis is my own work and it is my own experience in the training time

The data and results described in the thesis are exact and it originate from the actualsituation of the practice company

Hanoi,

16

February, 2016

Student

Nguyễn Thị Hoa

New In the current period, the trend of integration and globalization of the worldeconomy takes place, enterprises in general are under pressure of competition byother country Therefore, in order to increase the integration process and improvethe efficiency of the production and business activities, businesses need to findeffective working methods The important goal of a business is to maximize profits.The profit earned by a business depends on both objective and subjective factors.Payroll regime is also an importance factors that company should focus on, so thisthesis would make clear this issue.

This study is about the regime of wages and bonuses at THIEN UNG SERVICETRAINING COMPANY LIMITED First, the main purposes are providing deepunderstanding about salaries, bonuses, insurances defines their theories and theimportant of paying salary for their employee and the necessary of the payrollaccountant Next, it will consider the applications, the achievements and limitations

of payroll regime at THIEN UNG SERVICE TRAINING COMPANY LIMITED,

as an illustration for the academic background Finally, there are many proposalsand solution for the company to improve their payroll accounting regime Inconclusion, this study would have a part in improving the regime of payment ofsalaries, wage, bonuses and insurances at the company Hopefully, the adjustmentcould help company get a better payroll regime in the future, and it also would be agreat reference for other company

I really appreciate all my lecturers at the Academy of Finance for their assistances,directions and encouragement, it is main factor for me to complete excellently thestudy of educational reality.

I have furthermore to thank for the help of THIEN UNG SERVICES TRAININGCOMPANY LIMITED and people in the company who give me opportunity topractices in the company in the pastime

Especially, my friends from Foreign Languages also supported me in my thesis, Iwould like to thank them for all their support and suggestion I also would like togive my thanks to my beloved family crating motivation for me to complete mygraduation thesis

Finally, because of limitation of time and knowledge, my mistakes are unavoidable,

so I wish to have more opportunities I also wish to receive more contribution andsuggestion to get a better project

Table 2.1: The table about allowance rate at Thien Ung service training company.34

Table 2.2: Timesheets 41

Table 2.3 Bonus payment table 44

Table 2.4 Lunar new year bonus 45

Table 2.5 Payroll 47

Table 2.6: Distributing table of wages and social insurance 51

Table 2.8 Payroll receipt 54

Table 2.9 General Ledger 55

Table 2.10 General Journal 56

Table 2.11: General ledger 58

Table 2.12: The certificate of sick leave 61

Table 2.14 Social Insurance Payment 62

Table 2.13 The list of employees proposing to be entitled the regime of sickness 63

Table 2.15: Distributing table of wages and social insurance 67

Table 2.16 General journal 68

Table 2.17: General Ledger 69

Table2.18: General Ledger 70

Table 2.19: General Ledger 71

Table 2.20 Detail book account 73

Table 2.21 Detail book account 75

Table 2.22 Detail book account 77

Table 2.23 Detail book account 79

Diagram 1.1: Diagram of accounting payroll and payroll deductions recorded in thegeneral journal form 18Diagram 1.2: Diagram of accounting for payroll and payroll deductions recorded inthe Journal ledger form 19Diagram 1.3: Diagram of accounting for payroll and payroll deductions recorded inthe Journal voucher form 20Diagram 1.4: Diagram of accounting for payroll and payroll deductions recorded in 21Diagram 2.1: Diagram of general journal form 31

Chart 2.1: The organization of Thien Ung Training Service Company 27 Chart 2.2: The chart of accounting system 29

ABSTRACT ii

ACKNOWLEDGEMENTS iii

LIST OF TABLES iv

TABLE OF DIAGRAMS v

TABLE OF CHARTS vi

TABLE OF CONTENT vii

REFERENCES ix

INTRODUCTION 1

1 Rationale of the study 1

2 Aims of the study 2

3 Scope of the study 2

4 Methodology of the study 2

5.Organization of the study 3

CHAPTER 1: LITERATURE REVIEW 4

1.1 Overview of Payroll and Payroll deductions 4

1.1.1 Definitions 4

1.1.2 Payroll methods 8

1.2 Accounting for payroll and payroll deductions 11

1.2.1 Definition and role of accounting for payroll, payroll deductions 11

1.2.2 Accounting for payroll 11

1.2.3 Accounting for Payroll deductions 13

1.3 Accounting books used 17

1.3.1 General journal 17

1.3.2 Journal Ledger 18

1.3.3 Journal Voucher 19

1.4 Factors influencing Salary and Salary deductions 22

1.4.1 Internal Factors 22

1.4.2 External Factors 22

CHAPTER 2 THE STUDY 24

2.1 Overview of Thien Ung Service Training Company Limited 24

2.1.1 Establishment and development of Thien Ung Training Service Accounitng Company Limited 24

2.1.2 The main activities and the organizations of Thien Ung Training Service Accounting Company Limited 25

2.1.3 The features of accounting system of Thien Ung Service Training Company Limited 29

2.2 The current situation of accounting for payroll and the payroll deduction at Thien Ung Service Training Company Limited 33

2.2.1 The features of labor, payroll and payroll deduction at Thien Ung Service Training Company Limited 33

2.2.2 Payment methods and salary calculating methods 36

2.2.3 Vouchers and accounts used 38

2.3 Accounting for salaries and bonuses 38

2.3.1The policy of accounting for salaries and bonuses 38

2.3.3 Accounting procedures 40

2.3.4.Social insurance allowance for employees 59

2.5 Accounting for payroll deduction 64

2.5.1 Social Insurance 64

2.5.3 Unemployment Insurance 64

2.5.6 Trade Union 64

3.1 The evaluation of current situation of accounting for payroll and the

payroll deductions at Thien Ung Service Training Company Limited 81

3.1.1 Advantages 81

3.1.2 Disadvantages 82

3.1.3 Causes 82

3.2 Suggestions to improve accounting for salary and salary deductions at Thien Ung Service Training Company Limited 83

3.2.1 Improving a clear allowance and subsidy regime 83

3.2.2 Improving management policy 83

3.2.3 Improving training of manager and workers 83

CONCLUSION 85

REFERENCES

1 Rationale of the study.

Labor is the most important input factors of every business Improving laborproductivity is the basic way to improve business efficiency and create reputation ofbusinesses in competitive market

For enterprises, to survive and develop, they must find ways to improve productionand business efficiency Therefore, the management of wages and salary deductionsmust be paid attention Other activities will not be effective, or even ineffective ifthis work will not be paid enough attention

In today's market economy, labor and salary management organization is animportant content in the business management of enterprises, it is one of the mostimportant factors that determine quantity and quality of goods and products

Payroll and payroll deductions for the employees always receive great concernbecause of its social-economic significance For the employees, these payments areimportant because they could be their sole incomes, to support their whole families’lives For every business, it accumulates in the expense account that takes up a greatproportion in total costs It can be the driving force behind the increase of laborproductivity, if it is paid basing on employee's productivity Therefore, how toconstruct wage regime and how to select an appropriate payment form are verynecessary Payroll issue is not new, however there are some deficiencies which areneed to adjust to get an effective work of paying salary, wage, bonus and insurance

in enterprises As the result, Enterprises could ensure that, their employee can getsuitable salary, thus companies can save cost and increase profits

Understanding the paramount importance of the payroll accounting work inenterprises so in the process of practice as well as completing the subject ofgraduation, with the enthusiastic advices of my teacher - Ms Cao Phuong Thao andthe support of financial accounting department's personnel, I decide to choose thesubject: "Accounting for payroll and payroll deduction at Thien Ung servicetraining company limited " as graduation thesis topic

2 Aims of the study

When studying “Accounting for payroll and payroll deduction”, there are threemain objectives which I want to clarify First, providing basic information tounderstand the concept of salary, payroll deductions, bonus and insurance Second,the ways that enterprise use to made payment for their employee, taking thescenario at Thien Ung Service Training company limited as a case for study, andreviewing their advantages and disadvantages Finally, it is to suggest possiblesolutions to improve the payroll accounting and the payroll related to insurance at

3 Scope of the study

The study provides analysis and reviews the work of payroll accounting and payrolldeduction at Thien Ung training service company limited Research scope: researchscope limited in Thien Ung training service company limited Time study: metricsused mainly are February 2019

4 Methodology of the study.

In order to finish graduation thesis, many methods are applied such as collectingand synthesizing data, analyzing by tables, diagrams and using mathematical.Firstly, Methods for collecting and synthesizing data include many ways to collectinformation and data supporting graduation thesis For example, I work and contactthe financial-accounting department of the Company to collect data about payrollaccounting and payroll deduction in February 2019 of the Company Besides, usingmany tools to get information about the situation of payroll accounting and payrolldeduction in Vietnam such as: Internet, newspaper, financial news and manycolleagues or studying many graduation theses and many related topics Secondly,Comparison is another method This is method that used to compare the similaritiesand differences of an issue In reality, applying this method, I compare betweentheory and practices about payroll accounting and payroll deductions in the ThienUng service training company limited, so finding out the deficiencies of thecompany Thirdly, using analysis by table and diagrams is an efficient method

Finally, I use Mathematical method which using mathematical formulas to calculatethe payments to the employees.

5.Organization of the study

Chapter 1: Literature review

Chapter 2: The current situation of accounting payroll and the payroll deduction to

at Thien Ung service training company limited

Chapter 3: Recommendations to improve payroll regime and payroll deduction atThien Ung service training company limited

CHAPTER 1: LITERATURE REVIEW 1.1 Overview of Payroll and Payroll deductions

1.1.1 Definitions

Labor: is the consumption of labor force in reality Labor is purposeful, consciousactivities of people to create products to serve the needs of society life Labor is themost typical and creative activity of man

The labor costs definition is the total cost of all labor used in a business It is one ofthe most substantial operating costs These are particularly important in anybusiness which experience heavy human resource labor costs: construction,manufacturing, and other industries which have partially or non-automatedoperations These costs include 2 main subcategories The direct labor costsdefinition is summarized as the cost of labor which is used directly to makeproducts Meanwhile, the indirect labor costs definition is simply explained as thecost of labor which is used to support or make direct labor more efficient

Whenever a worker activity takes place, the enterprise must pay for all kinds ofmaterials, attrition of tools and tools for production process and money paid tolaborers Labor costs are one of the three cost factors that make up the value ofproducts made by businesses High or low labor costs affect product costs.Therefore, in order to manage production costs well, firstly, it is necessary tostrictly control labor expenses and to manage wages from two basic criteria:quantity and quality of labor

Laborers, after using their labor power to create products, shall be paid a certainamount of wages On the other hand, we see that labor is exchanged for wages Solabor can be considered a commodity, a special commodity And wages are theprices of those special goods, labor goods Because goods of labor need to beexchanged on the labor market on the basis of an agreement between the buyer andthe seller, affected by the law of value, the law of supply and demand Therefore,labor prices will vary according to the price of the constituent elements as well asthe supply-demand relation of labor Thus, when considering wages as the value oflabor, this price will form based on an agreement between the employee and theemployer Payroll may increase or decrease depending on the supply and demand oflabor goods Thus, the price of wages often fluctuates but it must revolve around thevalue of labor power, as other common goods, it requires exactly of its value Onthe other hand, the fluctuations in payroll must ensure the minimum living standards

so that workers can survive and continue working

1.1.1.2 Payroll deductions

Payroll deductions are amounts withheld from an employee's payroll check, andthese amounts are withheld by their employer Among these deductions areinsurance pension contributions, wage assignments, child support payments, taxes,and union and uniform dues Deductions that are mandated are government taxes;however, all other deducted amounts are voluntary

No matter how many hours an employee has worked, payroll deductions must bewithheld from payroll checks In the event that no deductions are withheld, theemployer becomes liable and responsible for any mandated amounts that weresupposed to be withheld When an employee's insurance deductions are notwithheld, the employer becomes liable to pay the deductions or to cancel theemployee's insurance policy It is always an employer's responsibility to make sureany payroll deduction is withheld in a timely manner

Payroll deductions include:

- Social Insurance

In addition to the payroll and salary deductions, the company has also built bonusregime for individuals with achievements in production and business activities.Bonuses for stimulating employees in production and business activities include:emulation bonus, reward for improving product quality, saving materials and givingincentives for technical innovations, …

1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll

deductions

 The role of accounting for payroll and payroll deductions

Payroll accountancy is one of the most essential accounting functions within anorganization that demands unique set of skills for the management of payrolls of thecompany

Good accounting for payroll and payroll deductions helps the personnelmanagement in disciplined manner Also, it creates a basis for enterprises to payinsurance allowances reasonably

Well organized accounting for payroll and payroll deductions not only helpsmanage salaries strictly, ensuring paying salaries in accordance with policies, butalso is a basis for calculating the allocation of labor costs and business costsproperly

 Tasks

The payroll and payroll deductions tasks include the following basic tasks:

-Organizing to record; reflecting and synthesizing data on the number of employees,time of labor results; calculating wages and deduction of salary amounts, allocating

-Instructing and checking accounting staff in production and business departmentsand departments to implement the initial records of labor and wages according tothe proper regime and methods.

-Monitoring the situation of payment of salaries, bonuses and allowances foremployees

- Making reports on labor, wages, salary deductions, periodically labor situationanalysis, situation of management and spending of salary fund, providinginformation on wage labor for the department management in time

Payroll and payroll deductions is not only a noticable topic because it is animportance expenditure of the business but also a special concern for employeesbecause this is their right Moreover, workers use wages to stabilize their dailylives, serving their daily necessities

- Function of supervising employees: Helping the employer through paying wages,inspecting and monitoring workers who work according to their topics, ensuring thewages paid as effective as possible

- Labor administration function: The function of ensuring the role of the laborcoordinator in a reasonable manner with the fair and satisfactory wage, theemployee will voluntarily carry out the work assigned anywhere or anytime

Job – based salary form including:

+ Salary form based on products directly produced by direct labor

Salary paid to employees is calculated directly according to the number of finishedproducts which reach quality standards

+ Salary paid for indirect labor

The salary is paid for indirect labors who have no physical association with thefinished product or it’s impractical to trace the costs So, this form still has severallimitations

However, there is a clear link between the value of the job performed to thecompany and the level of pay when applying this form So, it helps encourageemployees to work harder and better to improve labor productivity as well asincrease their salaries However, It is complicated to administer and expensive tooperate This system is suitable to direct labors And such a system is most effective

in the circumstance where jobs are clearly defined

1.1.1.2 Time-base salary

This is a form of payment for employees based on working time, wage level andwage scale This method is mainly applied to indirect workers, stable jobs or maybe

In the enterprise, the payroll by time is applied to office staff such as administrativeadministration, labor organization, statistics, finance and accounting Time-basedpayment is a form of compensation for employees based on their actual workingtime, occupations and professional and technical proficiency levels of employees.Each occupation specific job characteristics that apply different wage levels.Professional and technical proficiency divided into several wage scales, each salarylevel has a certain salary, which is the basis for payment of wages, wages over timecan be divided.

 Time-based salary per month

As salary paid to employees by month, the wage level is calculated

over time is 1 month

Wage paid in months =

Minium wage

x

The actual number

of working days ofemployees in month

The number ofworking days inmonth

 Time-based salary per week

Wages are wages for employees based on weekly wage and number of workingdays in a month

 Time-based salary per day

Hourly rates can be calculated directly to pay hourly rates or based on daily wagefor overtime allowances for employees

Wage paid by hour

1.1.2.3 Other form of payroll

Payroll base on turnover is a form of payment / bonus whose income depends on theturnover achieved according to the sales target and the company's salary / bonuspolicy Usually applied to sales staff

There are many types of salary base on turnover

+ Personal salary and bonus

+ Group salary and bonus

Wage paid in weeks =

Monthly salary

52 weeks

1.2Accounting for payroll and payroll deductions

1.2.1 Definition and role of accounting for payroll, payroll deductions

 Definition of accounting for payroll, payroll deductions

Accounting for payroll play a vital role in all companies with a staff of employees.

Both small and large businesses alike must comply with local, state and federal lawsspecific to payroll reporting and compliance regulations In essence, payrollaccountants act as liaisons that perform financial and reporting activities between abusiness organization, their employees and the government

Payroll and payroll deductions is not only a notice topic because it is an importance

expenditure of the business but also a special concern for employees because this istheir right Workers use wages to stabilize their daily lives, serving their dailynecessities

 The roles of accounting for payroll, payroll deductions

Payroll Accountanting and Payroll deductions cover a wide range of tasks that are

essential for timely, accurate and efficient payroll operations abiding by federal,state and local laws Payroll Accountants and payroll deducitons need to have acomprehensive understanding of fundamental tasks, such as paycheck calculations,taxation principles, preparing ledgers and journals, transfers and journal entries anddeposits Their main role is responsible for appropriate disbursement of funds,maintaining and updating employee leave balance information

1.2.2 Accounting for payroll

1.2.2.1 Vouchers used

Vouchers used in accounting for payroll and payroll deductions are made for thepurpose of monitoring the use of working time, payables for employees inenterprises such as salaries, wages, allowances, bonuses, working-trip allowances,overtime pay, payables for other organizations and some other content related towages or labor

The accounting vouchers consist of:

- Form 01a – LDTL – Timesheet: is a method for recording the amount of aworker's time spent on each job by month or by week.

- Form 02 – LDTL – Timesheet for overtime

- Form 03 – LDTL – Wage payment table: Each production group, eachmanagement department creates a wage payment table, which lists the names andthe paid wage amounts of each person in the group

- Form 04 – LDTL – Bonus payment table: This table is made for each productiongroup, each department, business division these payment tables are the basis forpayment and deduction of other amounts such as social insurance, healthinsurance for workers

- Form 06 – LDTL – Overtime pay table

- Form 08 – LDTL – Exchange contract: This form is a contract signed between theemployer and a person about the workload, working time, responsibilities andinterests of each party when performing that job When the job is done, then the end

of contract It is also a basis for paying wages to the contractor

1.2.1.2 Accounts used

Account 334: payable to employees

This account is used to reflect the amount of money and the situation of the amount

of payments payable to the personnel of enterprises about salaries, wages, bonuses,and other amounts which belongs to the personnel's income In enterprises thisaccount is also used to reflect the wages to pay for outsourced employees

The structure and the content of reflection of the account 334

Debit Account 334 Credit

- Deductions of salaries and wages from the

employees’ salaries

- Salaries, wages, bonuses, social insurance

and other amounts which have been paid or

advanced to employees

- Amounts payable to employees such as salaries, wages, bonuses and social insurance

Debit balance (if any) shows overpay for

Form no 10-LDTL: The list remitted wages

Form no 11-LDTL: Allocation table wages and social insurance

 Accounts used

Account 338: "payable and submitted": used to reflect the amounts payable and submitted to legal authorities, organizations, social associations, for superior about the expenses of union, social insurance, health insurance, payroll

deductions according to the decision of court (the money raising child upon divorce, legal costs, etc.) the value of excess asset waiting to process, short-term bet, encash for someone, keeping money for someone

1.2.3.1 Social Insurance

Social Insurance expense means that expense employers and employees pay to the

government so that people receive money when they are not able to work because

of age, illness, etc.:

Under the current regime, social insurance is calculated that the rate of 25.5% of thetotal wage must be paid to employees in each period

In which:

- Employers must bear 17.5% of the total wage or salary included in production expenses

- Employees must bear 8% of the total salary by deduction into their salaries

Account 3383 – Social insurance: reflecting accruement and payment of social

insurance at units

- Amounts of Social Insurance fees paid

to manage fund agencies of social

insurance

- Appropriating Social Insurance feesinto operating expenses or salaries ofemployees;

Debit balance (if any) shows overpay

for employees.

Credit balance shows salaries, wages and other amounts payable to employees.

1.2.3.2 Health Insurance

Health insurance expense is the expense incurred by a business to pay for its

portion of the medical insurance of its employees If the expense relates to

employees in the selling and administrative area, the expense is charged in that portion of the income statement If the expense is instead related to employees in the production area, the expense is charged to the cost of goods sold

Health insurance expense is 4.5% of the total wage payable to employees, in which:

- Employers must bear 3% and be included in production and business costs

Account 3384 – Health insurance: reflecting accruement and payment of health

insurance by units

- Amounts of Health Insurance fees

paid to manage fund agencies of social

insurance

- Appropriating Health Insurance feesinto operating expenses or salaries ofemployees;

Debit balance (if any) shows overpay

for employees.

Credit balance shows salaries, wages and other amounts payable to employees.

1.2.3.3 Unemployment Insurance

Unemployment insurance expenses is the amount of money businesses must pay

employees when they suffer lost a job Under the current regulations,unemployment insurance is 2% of the total salary payable for each accountingperiod, in which the employer pays 1%, which is included in the production andbusiness costs, the employees bear 1% by deducting their salaries

Account 3386 – Unemployment insurance: reflecting accruement and payment of

unemployment insurance by units

Debit Account 3384 Credit

- Amounts of unemployment Insurance

fees paid to manage fund agencies of

social insurance

-Appropriating UnemploymentInsurance fees into operating expenses

1.2.3.4 Trade union

 Trade union fees

A trade union is an organization that has been formed by workers in order to

represent their rights and interests to their employers, for example in order to

improve working conditions or wages Therefore, Trade union fees is a grant fund for union activities at all levels

- According to the current regulations, that fees is deducted at the rate of 2%

of the total amount

- Salary must be paid for each accounting period and included in the business and production expenses, including 1% for the grassroots trade union and 1%for the upper union

Account 3382 – Trade union fees: reflecting accruement and payment of trade union

fees by units

Debit Account 3382 Credit

- Trade union fees disbursed at units;

- Amounts of trade union fees paid to

manage fund agencies of trade union

fees

- Appropriating trade union fees intooperating expenses or salaries ofemployees;

- Overspending trade union fees whichare granted additionally;

Debit balance (if any) shows overpay

for employees.

Credit balance shows salaries, wages

and other amounts payable to employees.

1.3 Accounting books used

1.3.1 General journal

A Journal entry is the first step of the accounting or book-keeping process In this step, all the accounting transactions are recorded in general journal in a

chronological order The general journal is maintained essentially on the concept

of double entry system of accounting, where each transaction affects at least two accounts

Other names used for general journal are “journal book” and “book of original entry”

 The process of making a journal entry

The first step in the process of preparing a journal entry is to analyze the accounts involved in a business transaction and then apply the rules of debit and credit

1based on the type of each account After identifying the accounts involved in the transaction and deciding upon the applicable rules, the journal entry is recorded in the general journal in a specified format which includes the following details:

Diagram 1.1: Diagram of accounting payroll and payroll deductions recorded in

the general journal form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

vouchers in the same type to record these transactions They can make it easy to record, collate and check information and figures frequently However, because there is only a general accounting books (journal ledger), it makes difficulties for medium and large size enterprises in performing a division of labor

Wage payment table

Financial statements Trial Balance

General ledger 334, 338

General detailed

Diagram 1.2: Diagram of accounting for payroll and payroll deductions recorded

in the Journal ledger form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

1.3.3 Journal Voucher

A journal voucher is a document on which is stored the essential information about

an accounting transaction This voucher contains the following information:

 Unique identifying number

Financial statements

detailed reports

Detailed book 338

accounting vouchers of

Diagram 1.3: Diagram of accounting for payroll and payroll deductions recorded

in the Journal voucher form.

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

1.3.4 General Journal Voucher

A general journal is the part of the accounting record keeping system in which transactions are entered The four types of journals include sales, cash receipts, purchases, and cash disbursements. 

A general ledger is the account used to store and sort the balance sheet and income statement transactions Accounts included are cash, accounts receivable,

investments, inventory, equipment, and land

In other words, a journal voucher makes entries into the general journal, whose transactions are then used for the preparation of the ledger

Wage payment table

Diagram 1.4: Diagram of accounting for payroll and payroll deductions recorded

in

General journal voucher form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

Wage payment table

General ledger 334, 338

General journal voucher

General detailed reports

Detailed book 338

accounting vouchers of the same type.

1.4 Factors influencing Salary and Salary deductions

1.4.1 Internal Factors

1.4.1.1 Supply demand of labor market

When the supply of labor is greater than the demand for labor, the wage tends todecrease, when the supply of labor is smaller than the demand for labor, the wagetends to increase, and when the supply of labor is equal to the labor demand Thelabor market is in equilibrium The wage is now a balanced wage, which is brokenwhen the factors affecting the supply and demand of labor change such as (marginalproductivity of labor, prices of goods and services )

When the cost of living changes, due to the change in prices of goods and services,real wages will change Specifically, when the cost of living increases, real wageswill decrease Thus forcing units and businesses to increase nominal wages forworkers to ensure stable life for workers, ensuring real wages are not reduced

1.4.2 External Factors

1.4.2.1 Working environment of enterprise

The policies of the business: the policies of wages, allowances, prices appliedthoroughly and appropriately will encourage employees to improve productivity,quality, efficiency, directly increase their income

The financial ability of an enterprise strongly affects wages For businesses with alarge amount of capital, the ability to pay salaries for employees will be easy andconvenient On the contrary, if the financial capacity is not stable, the salary of theemployee will be very precarious

The rational or unreasonable organizational structure also affects more or less thesalary How is the management done, how to arrange the workforce to superviseand propose measures to stimulate the production process As the result, theefficient of production process by good organization structures affects salaryregime

1.4.2.2 Employees

Labor qualifications: For highly qualified workers, there will be higher income thanlower-level workers because to achieve that level, workers have to spend morepower for their work or they have to take part in long-term training in schools or atthe enterprise The enterprises are willing to pay high salary for the jobs whichrequire a high level of knowledge and qualifications

In addition, working experience and work time often go hand in hand A personwho has many years of experiences will gain a lot of experience, so they will limitthe risks that may occur in the job and improve his sense of responsibility before thework to achieve high quality productivity As the results, their salary will beincreasing Moreover, the ability of completing of the job is fast or slow, qualityassurance or not, affects the wages of workers immediately

In conclusion, payroll accounting and payroll deductions are affected by bothinternal and external factors, so companies should find a good accountingmanagement

CHAPTER 2 THE STUDY

2.1.1 Establishment and development of Thien Ung Training Service Accounitng Company Limited

2.1.1.1 The establishment of Thien Ung Training Service Accounting CompanyLimited

Thien Ung Accounting Company was founded in 2013 by Mr Hoang Trung That.With the desire to help students and those who do not really understand accounting,

he cooperate with a number of lecturers who have been chief accountants,accounting experts and general accounting; all have many years of experience inaccounting They create many interesting lectures, It really get attention fromstudents In addition to teaching and training to help students with experienceequivalent to 3-4 years of experience, the company also associates with a number ofcompanies to give students the opportunity to experience internships and work at anumber of companies

 Core values:

 Reputation is the most important asset of the Company;

 Ethics is the most important quality of its employees;

 Compliance and risk control

 The goal of the company

Support accounting students in the last year to practice at the Company: Instructing

to make internships reports, select topics, provide data, stamp to confirminternships

Create favorable conditions for newly graduated accounting students, accountants to

be exposed to practical accounting jobs, improve their professional skills, learnfrom experience from the former chief accountants

 Training new accountant with high professional skills, who can master their owntax and financial statements

Advice to support and solve problems that businesses are having to deal withaccounting books and Tax

Supporting business managers and leaders who can manage their businessaccounting system well, whether they are doing right or wrong

Provide free accounting resources with high professional skills for businesses, haveexperience in handling the actual accounting operations that enterprises are facing 2.1.1.2 The development of Thien Ung Training Service Accounting companyLimited

After 7 years of establishment, the company has expanded many branches andachieved many rewards After 7 years of establishment and development, thecompany has affirmed its position in both teaching and accounting fields Thecompany has been one of the leading accounting training centers in Vietnam andalso one of the most prestigious accounting and financial consulting firms inVietnam Up to now, the company has collaborated with many other companies andtrained thousands of students, all of whom have leaved great feedback

2.1.2 The main activities and the organizations of Thien Ung Training Service Accounting Company Limited

2.1.2.1 The main activities of Thien Ung Training Service Accounting CompanyLimited

 Accounting Services

If the accounting department of the enterprises doesn’t have more experiences orthe company is shortage accountant, they will hire external accounting services.The company will do all the tasks relating accounting, which consists ofreviewing and checking accounting books, balancing profit and loss, makingannual financial statements for all types of enterprises

 Tax accounting services

Services help to manage tax accounting issues and focus on strategic tax aspects

of the business Services include:

 Deferred tax validation projects

 Tax basis balance sheet support

 Remediation and restatement assistance

 Financial statement carveout support

 Issue-specific tax accounting consulting, including valuation allowance assessments, business combinations and etc

 Financial reporting services

It helps an organization or business mainly to analyze and evaluate thecompany’s financial performance in the previous financial years as well ashow the company is doing quarter on quarter basis In simpler words,financial reports would provide the organization with an analysis of how theorganization has performed in the past and how it is performing presently

 Teaching service

The company will train all the student from basis accounting knowledges tobecoming a good accountant by many accounting experts, general accountantand so on

2.1.2.2 The organization of the company

Based on business field, basic mission of a commercial enterprise, the managementsystem Thien Ung Training Service Company Limited has been organized as thefirst chart follows:

Chart 2.1: The organization of Thien Ung Training Service Company

 Director

Director is the most powerful people who is responsible for controlling the workand resources of the Company and ensuring the recruitment and retention of therequired numbers and types of well-motivated, trained and developed staff to ensurethat it achieves its mission and objectives Besides, managing director prepares acorporate plan and annual business plan and monitors progress against these plans

to ensure that the Company attains its objectives as cost-effectively and efficiently

Chief Accountant Accountant

Treasurer Secretary

Sale Department

Head of Sale Department StaffVice Director

 Contributing to sales innovations, strategic business development, and theprofitability of the company as determined by the company's strategic goals.

 Evaluating the success of the company in achieving its goals and formulatingplans to correct any issues if the company is not achieving its goals

 Managing the daily operations and revenue generation of the company andensuring its continual growth

 Assisting in maximizing the company's operating performance and achievingits financial goals

 Assisting in managing the company's finances, identifying ways to increaserevenue and decrease costs, analyzing financial reports, and preparingoperating budgets

 Contacting with the customers to know their needs and requirements

 Identifying the target budget for each year with following-up percent

of the budget realization each quarter of year

 Developing the rapports with all existing and new customers to knowtheir demands

 Accounting form

Accounting form is the accounting book system used to systematize and synthesizedata from the original documents according to a certain order and recording method.Recently, Thien Ung Training Service Accounting Company Limited is using

General Journal is a type of accounting form which is simple and easy to record.

All economic events are recorded in a chronological order Moreover, the records

make it possible to trace the debits and credits of accounts when there are many

errors Accountants will record into a ledger after entering items into the general

journal

2.1.3 The features of accounting system of Thien Ung Service Training Company

Limited

2.1.3.1 The organization of accounting system

The company is a unit of an independent accounting firm, therefore the Company's

accounting system is relatively complete and suitable for the organizational

structure of the consultant business Accounting system of the Company is

expressed through the following chart:

Chart 2.2: The chart of accounting system

Chief accountants: Have responsibility for directing and guiding the work of

accounting, accounting information of the company and the work of finance

General accountant is responsible for analyzing and preparing financial documents

and reports, such as tax returns, income statements and balance sheets Accountants

Chief Accountant General

Accountant Accountant Payment Accountant Tax accountant Payroll Treasurer

keep track of the money coming in and the money going out General accountantsensure that the financial statements up-to-date It is the responsibility of a generalaccountant to stay current on tax regulations and make sure that taxes are paidcorrectly and on time.

Accountants of payment is a person who is responsibility for checking and

monitoring all the payment of the company, which help the board of director cancontrol the financial situation of the company For example, they can collect thetuition of the students who are training at the company

Tax Accountant is responsible for assisting clients and companies with their

financial and income tax statements Their work includes preparing payments,identifying tax savings, and analyzing tax issues

Payroll accountant is a person who make salary statements of employees and issues

paychecks to employees They are responsible for maintaining payroll relatedaccounts They are responsible for the reconciliation of accounts and accuracy ofaccounts

Treasurers: have responsibility to manage income cash funds, export cash funds in

the company

2.1.3.2 Accounting form, applied accounting policy and reporting system at thecompany

 The accounting form

Accounting form is the accounting book system used to record, systematize andsynthesize data from original documents according to a certain order and method ofrecording Recently, Thien Ung Training Service Accounting Company Limited isusing General Journal General Journal is a type of accounting form which is simpleand easy to record All economic events are recorded in a chronological order.Moreover, the records make it possible to trace the debits and credits of accountswhen errors are committed Accountants will record into a ledger after enteringitems into the general journal