General overview of Service provision Accounting and Determination of
Service provision and Determination of Business results
In accordance with the economic law established in 2013, services are defined as intangible goods that are inherently linked in the production and consumption process This definition encompasses services within the framework of Vietnamese products as stipulated by the law.
In economics, services are defined as intangible offerings that resemble goods While some products emphasize tangible aspects, many exist in a spectrum that blends both goods and services, highlighting the interconnectedness of these two categories.
Service provision refers to a commercial activity where a service supplier is obligated to deliver a service to a customer in exchange for payment The customer, in turn, is required to compensate the service provider and utilize the service as per the agreed terms.
The services provision process inenterprises in general and services firms in particular has following main characteristics:
+ There is an agreement between the buyer and seller, the seller agrees to sell, the buyer agrees to buy, they pay or accept to pay
+ Giving customers the best product satisfaction possible when using the services that the company has provided
Definition of business results dertermination
Determining business results involves comparing the costs incurred with the revenue generated during a specific period If revenue exceeds costs, the outcome is profit; if costs surpass revenue, the result is a loss This assessment is typically performed at the end of the month, quarter, or year, depending on the unique characteristics and management needs of the business.
Relationships between service providers and determining business results
Service provision represents the final stage in an enterprise's business process, playing a crucial role in determining overall business performance The relationship between service delivery and business outcomes is significant, as effective service provision directly influences the success of the business Ultimately, achieving favorable business results is the primary objective, with the delivery of gastrointestinal services serving as a vital means to reach that goal.
The role of Service provison accounting and Determination of bussiness
Effective service provision and the assessment of business outcomes are crucial for companies in the service industry Precisely evaluating business results serves as the foundation for measuring an enterprise's performance.
An accounting organization providing services and determining business results is a key tool in the effective management and administration of the enterprise's operations in the business process
Accounting information services are essential for business administrators to assess the effectiveness of their plans These services encompass the analysis of type, quantity, quality, price, and payment, as well as the evaluation of balance sheet costs, including cost of goods sold and management expenses By determining the business results, these services guide future operational strategies, enhance business processes, optimize management, reduce costs, and boost revenue.
Accounting information plays a crucial role in delivering services and assessing business outcomes, enabling state agencies to monitor compliance with obligations to the government This oversight facilitates the formulation of effective policies aimed at fostering comprehensive national economic development.
Accounting information regarding service provision and the assessment of business outcomes is crucial for stakeholders, including investors and suppliers This information enables them to understand the enterprise's financial health and make informed economic decisions promptly.
Method of service provision
The mode of service provision refers to the various methods businesses employ to deliver their services to customers Understanding these delivery methods is essential for optimizing customer experience and enhancing service efficiency.
The diversity of service delivery methods contributes to the complexity of accounting organizations, particularly in managing expenses, revenue, and overall results It is essential to identify accounting objects that aggregate costs, record revenue, and determine potential outcomes for each type and method of service business.
On business organization and management aspect, service businesses often perform business operations management, as follow:
+ According to the process of Completing and producting service provision:
Service providers will be monitored and conducted according to each specific step so that the costs and revenue will be recorded by each step of completion
Bill states that services will be monitored for each customer and individual unit order, allowing for the recognition of total costs and revenue associated with each order, while not addressing aspects such as quality, service delivery, or delivery schedules.
Payment methods
Late payment occurs when a business receives goods but fails to pay the seller on time This payment may be made under the agreed-upon preferential credit terms.
The direct payment method requires commercial enterprises to promptly pay sellers upon receipt of purchased goods, using various payment options such as cash, bank transfer, or goods exchange Notably, invoices exceeding 20 million must comply with Circular 26/2015/TT-BTC, which amends Article 15 of Circular 39/2014/TT-BTC regarding sales and service invoices issued by the Ministry of Finance.
- Payment according to each stage of implementation of the plan:
When each service stage is completed, the service user must pay the service provider then can complete the next planning steps.
Duties of services provision accounting and determiration of business
Sales play a crucial role in determining the success or failure of a business, as they reflect both the competitiveness and reputation of the company in the market.
In modern enterprises, accounting, particularly sales accounting, plays a crucial role in helping businesses and state agencies assess the effectiveness of their cost management and profitability By optimizing the organization and arrangement of the sales process, companies can enhance service supply accounting and accurately determine service delivery outcomes This approach fosters cohesion within the overall accounting system of the business To maximize the impact of accounting on production and business management, sales accountants must actively engage in these processes.
Effectively monitor and evaluate the volume of services bought and sold, along with their quality and value Accurate calculation of the cost of goods sold, selling expenses, and administrative expenses is essential for assessing sales performance.
- Check and supervise the implementation of service sales targets, unit sales, payment of goods, and tax payment to the State
To ensure accurate sales results, it is essential to promptly reflect the sales turnover and actively monitor the collection of sale proceeds This vigilance helps prevent the misappropriation of capital and guarantees that all funds are collected in a timely manner.
- Provide accurate and truthful information, make a full and timely settlement to properly assess business performance as well as the performance of obligations to the State.
Basic content of Service provision Accounting and Determination of business
The basic principles and accounting standards govern Service provision
1.2.1.1 The basic principles Cost convention:
Assets should be recorded at their original prices, reflecting the amount paid or the fair value at the time of recording This ensures accurate accounting of the enterprise's investments.
This principle regulates revenue accounting, where costs associated with the loss of benefits are deducted from assets recorded at cost Consequently, the cost of goods sold, selling expenses, and administrative expenses are all recorded at their respective costs.
Revenue and expense recognition must align, ensuring that when revenue is recorded, the associated expenses are also documented These costs encompass both the expenses incurred during the period the revenue is generated and any prior period expenses or payables that relate to that revenue.
- This principle governs revenue accounting, the costs reflected in the recognition of a turnover, an expense related to the creation of that revenue must be recorded
Enterprises must consistently apply their chosen accounting policies and methods for at least one annual accounting period If there are any changes to these policies or methods, the financial statements must include an explanation detailing the reasons and effects of such changes.
The principle of revenue accounting requires that the methods for determining turnover and expenses be consistently applied throughout at least one annual accounting period Any changes to the chosen accounting policies or methods must be clearly explained, including the reasons and effects, in the financial statements.
Precautions in accounting involve careful considerations and judgments needed to make estimates amid uncertainty According to the conservatism principle, increases in equity should only be recognized when there is substantial evidence, while any potential decreases in equity must be recorded as soon as evidence suggests they may occur.
- This principle governs revenue accounting, the costs shown in estimating uncertain expenses such as contingency costs, etc must be significant
An accountant is responsible for gathering, processing, and delivering sufficient material information, as non-material information has minimal impact and can often be disregarded in decision-making.
Materiality is determined by the significance and characteristics of the information or errors evaluated in a specific context This principle influences revenue accounting and the treatment of substantial expenses that span multiple periods, with costs recorded in each period reflecting their potential impact.
All economic and financial transactions of a business, including assets, liabilities, owner's equity, revenues, and expenses, must be recorded in accounting books when they occur, rather than when cash is actually received or paid Financial statements are prepared on an accrual basis, providing a comprehensive view of the enterprise's financial position over past, present, and future periods.
The principle of accrual accounting dictates that revenues and expenses are recorded when they are earned or incurred, rather than when cash is exchanged Revenue is recognized at the point of economic transactions that qualify for recording, while expenses are acknowledged as they are incurred during operations.
Financial statements should be prepared under the assumption of ongoing business operations, indicating that the enterprise intends to continue functioning normally in the near future without any plans to cease operations or significantly reduce its activities If circumstances differ from this assumption, the financial statements must be prepared on an alternative basis, and the rationale for this basis must be clearly explained.
This principle regulates revenue accounting by ensuring that costs are recognized based on the assumption of continuous enterprise operation, focusing on the reflection of revenue and expenses at cost rather than market price.
1.2.1.2 Accounting standards Number 1Standard : General Standard gives basic accounting principles, instructions on recording revenue, expenses, revenue factors, cost factors, results factors and principles, directions guide to presenting elements on financial statements of enterprises
- Revenue arises in normal course of business activities and usually includes: Sales of goods, revenue from service provision, interests, royalties, dividends and shared profits
- Revenue is recognized in the Income Statement when it is realized that future economic benefits related to the increase in assets or reduction of liabilities must be reliably determined
Business expenses include costs associated with regular operations, such as cost of goods sold, selling expenses, and administrative expenses These costs manifest as cash and cash equivalents, inventory, and depreciation of machinery and equipment.
Expenses are recorded in the income statement when they lead to a decrease in future economic benefits, either through asset reduction or an increase in liabilities, and these expenses must be reliably determined.
- Expenses recognized in the income statement must comply with the principle of matching between revenues and expenses
- An expense is recognized immediately in the income statement in the period when it does not bring economic benefits in subsequent periods
Accounting for service provison and services revenues
1.2.2.1 Accounting services revenue and Revenue deductions
The concept and contents of services revenue and Revenues deductions:
Service provision revenue is the total value of economic benefits that an enterprise earns or will get from economic activities arising from the provision of services
Service provision revenue refers to the income generated from executing contractual agreements over one or more accounting periods This includes revenue from transport services, tourism activities, and the leasing of fixed assets through operating leases.
Sales deductions are adjustments made to lower the total sales revenue of goods, products, and services during a specific accounting period These deductions encompass trade discounts and sales discounts.
A trade discount represents the monetary reduction that a business offers to a buyer when purchasing in bulk, as outlined in the commercial discount agreement within the economic contract.
+ Discount on goods sold : is used to reflect discounts or discounts on service provision in the period
Some notes when determining service provision revenue:
- Where the outcome of a service transaction cannot be reliably determined, revenue is recognized in proportion to the recognized costs that can be recovered
- Revenues and expenses related to service supply transactions must be recognized on the matching principle within the financial year
- Where the exchange of services for services is similar in nature and value, such exchange is not considered a revenue-generating transaction and revenue is not recognized
- Revenue is recognized at the fair value of amounts received or to be collected in the future, specifically:
+ For service enterprises that calculate and pay VAT by the credit method, service revenue is recognized at the price of services provided, exclusive of VAT
+ For service enterprises that calculate and pay VAT by the direct method, service revenue is recognized according to the total payment price
When a service is classified as exported and incurs export tax, revenue is recognized based on the total freight charge, including the export tax For service supply contracts spanning multiple accounting periods, revenue recognition is based on the completed work during each period, and service enterprises may utilize specific methods to determine this.
• Compare the ratio (%) of the completed workload to the total amount of work to be completed
• Percentage (%) of costs incurred compared to the total estimated cost of completing the entire service provision transaction
- Service revenue is detailly tracked by type of revenue in service of revenue management to determine business results at the request of business operations management of the unit
Receiving advance payments from customers for service periods requires recording unearned revenue in account 3387 - Revenue Unrealized According to the matching principle, revenue will be allocated each period as the services are provided.
- Comercial Invoice Account used: o Account
Account 511: Revenue from goods sale and service provision
Account 511 reflects the turnover from goods sale and service provision of enterprises in an accounting period of production and business activities
- ACC 511 includes some detail accounts as follow:
+ Acc 5111: Revenue from sales and merchandises + Acc 5112: Revenue from sales of finished goods + Acc 5113: Revenue from services rendered
Account 521 represents the total deductions from revenue for buyers, encompassing trade discounts, the value of returned goods, and sales discounts applicable during the period of business activities.
+ Acc 5211: Sales discount + Acc 5212: Sales returns + Acc 5213: Sales allowances
- Other related accounts (Account 111, 112, 131, ) a, Account 511:
- Indirect taxes payable (value-added, special consumption, export, environmental protection)
- Sales of services returned are carried forward at the end of the period
- Sale off sales at the end of the period
- Trade discounts carried forward at the end of the period
- Transfer net revenue to 911 account "Determination of business results"
Credit side: Sales of services provided by the enterprise in the accounting period b, Account 521:
- Trade discount accepted to settle for customers
- Revenues sales returns of which buyers are refunded or which are deducted from accounts receivable of customers about sold products, goods volume
At the conclusion of the accounting period, it is essential to transfer the total trade discounts, sales allowances, and revenues from sales returns to account 511 - Revenue from Sales and Service Provisions, in order to accurately calculate the net sales for the reporting period.
Common transactions: Acc 511,521 o Diagram 1: o Diagram 2:
ACC 333 direct excise tax, export tax, and value-added tax payable
Revenues from sales of goods and service provision ( vat under the direct method)
Sale revenues deduction tranfer net revenue to determine results business)
Revenues from sales of goods and service provision ( Vat under the deduction method)
ACC 33311 payable output value-added tax
1.2.2.2 Cost of goods sold accounting
The cost of goods sold (COGS) represents the actual expenses incurred for goods sold during a specific period, encompassing both the purchase value and associated costs of inventory COGS is a critical metric for investors, highlighting its importance in business accounting practices.
The determination of services cost :
The cost of a service is the total cost of doing business related to providing the service
Finished products and services are immediately included in the cost of goods sold, unlike physical products that can be stockpiled While the cost of services is viewed as part of the unfinished product, service activities typically do not factor in work-in-progress costs Consequently, the cost of products and services is represented by the essential living labor costs and the materialized expenses.
Revenues of returned goods sold at commercial discount sales including value-added tax ( direct method)
Tranfer revenues deduction to acc 511 to caculate net revenues
Revenues of returned goods sold at commercial discount sales including value-added tax ( deduction method) payable output value-added tax
At the conclusion of the business period, the costs associated with products and services that lack a physical form are moved from Account 154 - Work in Progress to Account 632 - Cost of Goods Sold.
Therefore, determining cost services are identified to calculate for each entity, each stage of the providing service process
According to this method, the service at each price shall be released at that price and is recorded for each entity, each bill, each stage of the whole process,
The direct calculation method is commonly used in transport businesses with straightforward technological processes, including automobile, water, and air transport This approach involves analyzing transportation costs gathered over a specific period, along with the value of fuel remaining in the transport vehicles at both the beginning and end of that period, to determine the overall cost using a specific formula.
Product price Fuel cost at the beginning of the period
+ transportation costs incurred during the period
- fuel costs remain in the vehicle at the ending period
Method of costing by order:
This method is primarily utilized in passenger and freight transport businesses for calculating costs associated with customer contracts The focus of cost calculation is on the transportation service provided for each specific order or a series of contracts, with the costing period aligning with the service provision period Upon completion of each contract, the accountant assesses the costs incurred When a customer places an order, the accountant initiates a cost sheet based on the contract At the end of the month or contract period, the accountant compiles and calculates the total costs using data gathered from the transport teams.
This method is suitable for enterprises with stable economic and technical standards, where the management system is well-structured and organized Additionally, the professional qualifications are in place, and the accounting ratios are notably high, particularly due to the effective implementation of the initial accounting regime.
The basic contents of the normative costing method include:
* Based on current economic and technical norms and approved cost estimates to calculate the cost of transportation activities
* Organize separate accounting of actual expenses as following the norm and expenses that beyond the norm
* Separately and regularly analyze the causes of the normative exit costs to take remedial measures
* When there is a change in the norm, it is necessary to promptly re-calculate the normative cost and the difference in costs due to breaking the norm
The actual cost of the transport contract
= cost norms of the transport contract ± the number of difference due to norm change ± Difference due to not reaching the norm
Accounts used: o Account 632: Cost of goods sold
Account 632 encompasses the total expenses associated with products, goods, services, investment properties, and the production costs of completed construction and installation services Additionally, it accounts for expenses linked to real estate business activities, including depreciation, repairs related to operating leases, and costs incurred from the sale or liquidation of investment properties.
1.2.3 Accounting for expenses and revenue from financial activities
- When rearched financial activities , there are two sections what is related to it, including : finacial expenses and financial revenue
- Alternately studyed each section , the following:
The definition and contents of the financial revenue
Financial income is the total value of economic benefits gained from financial activities or capital business in the accounting period Revenue from financial activities
The costs associated with transfer services are recognized in business results related to interests, royalties, dividends, and shared profits only when two specific conditions are met.
- Ability to gain benefits from that transaction
- The revenue can be measured reliably
Revenue from financial activities includes operations as follow:
- Interest: Deposit interest, loan interest, interest collection on deferred or installment payment services
- Gains from sale, transfer of financial instruments, joint venture investments in jointly controlled businesses, associated investments and subsidiaries
- Interest difference from sale and purchase of foreign currencies, interests from exchange rate differences
- Payment discounted due to the purchase of supplies, goods, services and fixed assets
- Bank Statements Account used: o Account 515- Revenue from fianancial activities Debit side:
- VAT payable under direct method (if any)
- Transferring net revenues from financial activities into account 911 “Income Summary”
Credit side : Revenues from financial activities incurred in the period
The definition and contents of the financial expenses
Definition: Fianancial expenses are related to capital activities, financial investment activities and financial activities of interprises
- Cost relataed to investment in financial instruments;joint ventutre investment,associated investment,investin subsidiaries
- Expenses related to lending expense
- Expenses related to buying foreign curriencies
- Establish reserves, reduce short_ term and long-term financial investment
- Expenses for business loan interest mus not be capitalized or discounted when selling products, labor and services…
- Debit notes, credit notes from banks,…
Account used: o Account 635- financial expenses Debit side:
- Interests expenses of loan, of credit purchases, of financial lease;
- Losses from selling foreign currency;
- Losses from liquidating, transferring investments;
- Loss on exchange rates incurred in period;
- Losses on exchange rates revaluated at fiscal yearend of accounts derived from foreign currencies;
- Provision for decreases in business security price, provision for loss from investment in other units;
- Expenses of other financial investment activities
- Return of provision for business security price decrease, provision for loss from investment in other units (difference between provision planned for this period and that of last year);
- Items recorded a decrease of financing costs;
- At end of account period, closing out total costs incurred in period to determine trading results
This is a tuye account that does not have balance Common transactions / regular dealings
1.2.4 Accounting for Selling and Adminitrative ExpensesThe concept and contents of Expenses
Business management expenses include Selling expenses and General and administrative expenses
Accounting for other expenses and income
The concept and contents of the other income
Other income is the income generated from activities other than the normal business activities of the enterprise
- Income from sale, liquidation of fixed assets
- Remaining value or selling price or fair value of fixed assets sold for subleasing by mode of financial leasing or operating lease
- Fines collected from customers, other units that violate economic contracts
- Collect bad debts that have been written off
- Taxes exempted and reduced by the State
- Income from payables of unidentifiable owner
- Bonuses of customers relating to the consumption of goods,
- products and services not included in turnover (if any)
- Income from gifts, gifts in cash and in kind of individuals and organizations
- Previous year's business income was omitted or forgotten to be recorded
- Debit note, credit note of the bank
- Record of handling surplus and missing assets
- A record of liquidation or sale of assets
- Tax receipts Account used: o Acc 711: Other Income
- VAT payable (if any) computed under direct method on Other Income of business which pay VAT under direct method
- At end of account period, posting Other Income generated during period to Account
Credit side: Other income incurred during period
The concept and contents of the other expenses
Additional expenses encompass costs associated with activities outside the core service provision that generates revenue for the business These amounts arise from events or transactions that deviate from the enterprise's regular operations.
ACC 111,112 liquidation of fixed assets
Transfer other Income to determine business results
Amount received due to breach of contract
Amount received from bad debts handled
- Expenses for liquidation and transfer of fixed assets
- Residual value or selling price of a fixed asset sold for subleasing by the method of financial leasing or operating lease
- Fines for violating economic contracts
- Amount of tax fines, retrospective tax payment
- Expenses due to wrong entries or omissions when recording accounting books
- Debit notices, Credit notices from banks
- Minutes of handling of excess or missing assets
- A record of liquidation or sale of assets
Account used: o Account 811 Common Transactions:
Accounting for corporate income tax expenses
The corporate income tax expense recorded reflects the payable amount based on the taxable income for the year, calculated using the current corporate income tax rate.
Accountants must record the enterprise income tax amount temporarily payable as enterprise income tax expenses based on payment vouchers each quarter At the end of the financial year, if the provisional corporate income tax payable is less than the final amount, the accountant will add the difference to the corporate income tax expense Conversely, if the payable amount exceeds the provisional tax, the accountant will reduce the enterprise income tax expense by the difference.
If a non-material error is found regarding the enterprise income tax payable from previous years, the enterprise can adjust the amount of tax payable by increasing or decreasing it in the current year's expenses This adjustment will reflect in the corporate income tax for the year when the error is identified.
For material errors, the accounting retrospective adjustment
When preparing financial statements, accountants must transfer the expenses of corporate income tax incurred to Account 911 (Determination of business results) to determine profit after tax in the accounting period
- Enterprise income tax finalization tax return
- A paper of payment to the State Budget
Accounts used: o Account 821: Cost of corporate income tax
Account 821 represents the collective income tax expenses incurred during the fiscal year, serving as a foundation for assessing the enterprise's post-tax business activity results for the current financial period.
Accounting for determining business results
Business results represent the final outcomes of a firm's production and operational activities over a specific period, reflected in the overall profit or loss generated.
Business results includes reults from normal business activities and results from other activities
Firsly, each reults is calculated as follow:
+ Result from normal business activities (1)
Business results from normal business activities
= net revenue − COGS + fiancial income − selling expense
+ Result from other activites (2) Result from other activities = Other income – Other expenses
+ General journal + Sales journal + Ledger :ACC 511 ,ACC 632,ACC 642,ACC 911…
+ Detailed Accounting Book : AC 511,515,AC 632,AC641,AC 642
• Accounting of derterming business results used core accounts: Acc 911 and Acc.421 and other related accounts
• Each accounts always has different content,particular the following :
Costs of products, goods , investment perpetration and services which was sold
Costs of financial activities, income tax expenses and other expenses
Selling expenses and general administration expenses
Net revenues from products , goods , investment properties and services sold in period
Revenues from financial activities , other income , and decrease record in business income tax expenses
Acc 421 – Undistributed post – tax profit
• Acc 4211 : undistributed post – tax profits of previous year
• Acc 4212: undistributed post – tax profits of current year Common transactions
Transfer selling expenses, administrative expenses,
If Dr.side of acc.8212 >
Dr.side of that account
If Dr.side of acc.8212 >Dr.side of that account share payables
Temporary divided payment , profit , distribution
Acc 3388 Acc 111,112,… to related parties
Accounting books used in Service provision Accounting and determination of
Detailed accounting books
- Detailed accounting books and cards used to record arising economic operations related to accounting objects which need to be monitored in detail according to management requirements
The detailed accounting records and books offer essential insights for managing various asset types, capital sources, turnover, and expenses that are not yet specified in the Journal and Ledger It is important to note that the quantity and structure of these detailed accounting records are not mandatory.
Enterprises must adhere to the guiding regulations outlined in the accounting framework, ensuring they maintain detailed accounting books and cards that align with their management requirements This practice is essential for effective financial oversight and compliance.
General accounting books
General accounting books include Journal and Ledger book
The Journal book serves to chronologically document economic and financial transactions for each accounting period and year, highlighting the reciprocal relationships between accounts It captures the total amounts on both the Debit and Credit sides of all accounting accounts utilized by enterprises, ensuring a comprehensive reflection of all relevant financial activities.
+ Day, month of book entry + Serial number and date of the accounting voucher used as a basis for book entry + Summary of content of arising economic and financial operations
+ Amounts incurred in the economic and financial operations
The Ledger serves as a crucial tool for documenting economic and financial transactions for each accounting period, adhering to the prescribed accounting accounts for enterprises It provides a comprehensive summary of assets, capital sources, and the outcomes of production and business activities To be effective, the Ledger must accurately capture all relevant financial information.
+ Day, month of book entry + Serial number and date of the accounting voucher used as a basis for book entry + Summary of content of arising economic and financial operations
+ The amount of arising economic operation recorded in the Debit or Credit side of the Accounts
Forms of bookkeeping
Form of general journal accounting:
Daily Note Periodic note Compare
Oringinal documenets special journal book Journal book
Daily Note Periodic note Compare
Cash book summary of accounting
Journal- Ledger book detailed general Table
Form of accounting on computers:
Daily Note Periodic note Compare
Cash book summary of accounting
Recording Vouchers detailed general Table
Ledger book- entry voucher register
Service provision accounting and business results in terms of accounting
The rapid advancement of science and technology is transforming the accounting field, with the integration of technology becoming more prevalent Machine accounting utilizes information technology within accounting information systems to convert raw accounting data into essential financial information for informed decision-making.
1.4.1 The principles and requirements of Machine accounting
Effective machine accounting organization must prioritize scientific principles and rationality, ensuring compliance with the Accounting Law It should align with macro-management requirements and adhere to accounting standards, financial policies, and the primary accounting practices of the State.
Daily Note Periodic note Compare
Oringinal doccuments summary sheet of accounting vouchers of the same type
The organization of machine accounting in enterprises must ensure that it is suitable to the enterprise's specific characteristics, conditions, and circumstances
The machine accounting organization is responsible for the receipt, inspection, processing, and supply of economic and financial information, ensuring it aligns with the management requirements of both the enterprise and the State.
To ensure effective machine accounting operations, it is essential to align the organization of these tasks with the payroll and qualifications of the current accounting personnel Additionally, it is important to regularly provide professional development opportunities to enhance the skills and computer proficiency of the accounting staff.
The organization of machine accounting in the enterprise needs to thoroughly grasp the principle of saving and efficiency
1.4.2 Service provision accountants and determine business results in terms of machine accounting
Declare the objects to be managed in the list of accounts, the list of customers, the list of finished products, the goods and the list of documents
+ Set default values, default tax entries, cost of goods sold in the system configuration
+ Enter data of transactions arising from sales activities, financial activities and other activities into the machine
+ Make accounting entries at the end of the period of other expense, revenue and income accounts to determine business results
1.4.3 The specification of service supply accountant and determination of business results in terms of applying machine accounting
After inputting data related to economic transactions, including service provision and financial activities, the accounting software automatically processes and updates the relevant accounts in the accounting books This includes the Ledger accounts 511, 515, 6421, 6422, and 635, as well as detailed records for services, goods, and revenue.
Accounting services play a crucial role in determining business results and managing VAT transactions For enterprises using the deduction method, input VAT can be credited Users simply need to input the tax rate for each product, good, or service, and the accounting software will automatically calculate and record the VAT in the journal.
Automated accounting software can efficiently handle the transfer of expenses, revenues, and other income to assess business results through automatic accounting entries The transition table can be either static or adjustable, depending on the user's setup and management needs.
1.4.4 The advantages and Disadvantages of accounting software
The application of accounting software gives businesses the following advantages ( benefites):
- The process of entering data on accounting software is simpler and faster when recording manually, helping you save a lot of working time
The 1A accounting software features automated functions that streamline common computational tasks, significantly reducing the likelihood of errors in calculations By simply entering documents, the software autonomously handles various calculations, including cost price, fixed asset depreciation, and exchange rates, without requiring manual input Additionally, it proactively checks for accounting errors and promptly alerts users to any issues, allowing for immediate corrections This automation not only minimizes the need for manual error-checking but also ensures confidence in the accuracy of financial records.
Accounting software streamlines the process of generating statistics and reports tailored to business needs, significantly reducing the time required It automates the retrieval of reports, financial books, and tax returns, minimizing the manual effort required by accountants Additionally, the software allows for easy export of reports to formats such as Excel and Word, facilitating convenient printing.
Utilizing accounting software enables managers to access crucial financial information promptly, facilitating swift and informed decision-making Furthermore, this technology enhances the productivity of the accounting department, leading to significant savings in both labor and operational costs.
Accounting software ensures immediate updates on new tax and social insurance regulations, streamlining compliance Additionally, high-quality software often integrates with various services, facilitating tasks for accountants, such as connecting with tax authorities and managing electronic invoices.
While accounting software offers numerous advantages, it is important to recognize its limitations, as not all businesses will benefit equally from its use If you are contemplating a transition from manual accounting to software solutions, it is essential to weigh potential disadvantages and limitations.
When considering software costs, it's essential to account for licensing fees, upgrade implementation fees, and ongoing support fees Many software solutions require an initial royalty payment, followed by annual charges for support and upgrades However, with 1A accounting software, users benefit from a straightforward annual fee that encompasses all these costs, eliminating the need for a significant upfront investment to obtain software rights.
Effective customer support is crucial for setting up essential information like account systems, accounting policies, inventory pricing methods, and tax declaration methods Throughout the usage of the software, professional advice and assistance with troubleshooting hardware or network issues may be necessary If the software vendor does not charge annual support fees, users may find themselves lacking the guidance and support they need when challenges arise.
Disclosure of service supply accounting and business results information in
Balance Sheet (B01)
The Balance Sheet is a comprehensive financial statement that captures the total value of current assets and the sources that fund these assets for a business at a specific point in time It also provides insights into sales performance and helps determine the overall business results reflected in the financial position of the enterprise.
This index reflects the deductible VAT amount and the refundable VAT amount at the reporting time
The data to be inscribed in this index shall be based on the Debit balance of Account 133 “ deductible VAT”
1.5.1.2 Tax and other payables to State ( Code 313)
This entry reflects the total amounts of enterprises still payable to the State at the reporting time, including taxes, charges, fees and other payables
The data is based on detailed Credit Balance of Account 333 “Tax and payables to the State”.
Income Statement (B02)
The Income Statement provides a comprehensive overview of a company's operational performance, detailing outcomes from core business activities as well as financial and other operations It presents key sales indicators and business results, with specific methods for establishing these targets.
1.5.2.1 Revenues from sales and service provisions (Code 01)
Basing on the accumulated cumulative amounts on the Credit side of Account 511 in the reporting period, the consolidation shall be recorded 1.5.2.2 Revenue deductions ( Code 02)
In the reporting period, the total cumulative amounts recorded on the Credit side of Account 521 will be aggregated to determine the net revenue from the sale of goods and the provision of services, classified under Code 10.
This index reflects he revenues from sales of good, finished goods, investment real property, service provision and other deducted revenues during the reporting period
1.5.2.4 Cost of good sold (Code 11)
Based on the accumulated arising Credit amount of Account 632, reciprocal arising Debit of Account 911 of the months in the period 1.5.2.5 Gross revenue from sales and service provisions (Code 20)
Code 21= Code 10- Code 11 1.5.2.6 Financial income (Code 21)
Figures recorded in this index are the arising accumulated amouns of the Debit side of Account 515 corresponding to the Credit side of Account
911 during the reporting time 1.5.2.7 Financial expense (Code 22)
Based on the accumulated accumulation of Credit of Account 635, reciprocal to arising Debit of Account 911 of the months in the period 1.5.2.8 Enterprise administrative expense (Code 26)
Figures recorded in this item are the total number of arising amounts of Credit side of Account 642 corresponding to the Debit side of Account
1.5.2.9 Net profit from operations ( Code 30)
Code 30= Code 20+ Code 21- Code 22- Code 26
Based on the accumulated debt amount of Account 811 reciprocal arising Credit of Account 911 of the months in the reporting period 1.5.2.10 Other income (Code 31)
Based on the total arising amounts of Debit side of Account 711 corresponding to the Credit side of Account 911 in the reporting period 1.5.2.11 Other expenses ( Code 32)
Based on the total arising amounts of Creditside of Account 811 corresponding to the Debit side of Account 911 in the reporting period 1.5.2.12 Other profit (Code 40)
This item records the difference between other income ( after deduction of VAT payable under subtraction method) and other expenses incurred during the reporting period
1.5.2.13 Total pre-tax profit (Code 50)
This index reflects the total accounting profit made in the reporting year of the enterprise from business operations and other activities arising in the reporting period
1.5.2.11 Current enterprise income tax expense (Code 51)
Based on the accrued amount, Credit of Account 821 reciprocal, arising Debit of Account 911 of the months in the reporting period
1.5.2.12 Profits after enterprise income tax ( Code 60)
The "Last year" column reflects data derived from the "This year" column in the previous year's business results report, ensuring that the corresponding recording data for each norm is accurately transferred.
Cash Flow Statement (B03)
Cash flow statement is a summary of the situation of cash collection and payment of enterprises divided into 3 activities : Business activities, investment activities and financial activities in a certain period
- Making cash flow statement is based on:
Note to the financial statements
Cash flow statement in the previous period
Other essential accounting documents include the General Accounting Book and detailed accounting records for accounts such as "Cash," "Bank Deposit," and "Cash in Transit." Additionally, it encompasses General Accounting Books, detailed records of relevant accounts, spreadsheets, and the allocation of depreciation for fixed assets, along with other detailed accounting documents.
1.5.3.2 The targets on the Cash Flow Report are as follows:
Proceeds from sales, service povision and other revenue:
This item is based on the total payment price collected during the period from the sale of goods, finished products, service provision, royalties, commissions, and other revenues It includes amounts collected from receivable debts related to previous sales and services, as well as any advances made by buyers for goods or services.
Money paid for goods and service providers
This item is based on the total payment amount made during the period for the purchase of goods or services, as well as expenses related to production and business activities It includes costs for purchasing, trading securities, and any amounts already paid towards debts owed to suppliers of goods or services.
This item is made based on the total amount paid to employees in the reporting period on salaries, wag, allowance, bonuses, which businesses have paid or advanced
The index is calculated based on the total Corporate Income Tax (CIT) paid to the State during the reporting period This includes the CIT paid in the current period, any CIT payable from previous periods, and any CIT that has been paid previously, if applicable.
Accurate revenue accounting is crucial for accountants, as it enables managers to assess business performance and make informed decisions that optimize enterprise outcomes.
The thesis has focused on research to clarify following problems:
- The basic theoretical issues related to revenue and cost accounting and determining business results in service enterprises: Concept, nature, expense and business results
- Focus on clarifying the content of service provision accounting and determining business results
- Organizing the system of accounting books and reports, and determining business results according to the current accounting regime and research save accounting process in conditions of applying machine accounting
This article examines the fundamental aspects of service provision accounting and the assessment of business results at Thai Son International Import, Export Company Limited It aims to identify the strengths and weaknesses in the company's accounting practices, providing insights into the current state of service provision accounting and its impact on business outcomes.
CHAPTER 2: CURRENT SITUATION OF SERVICE PROVISION ACCOUNTING AND DETERMINATION OF BUSINESS RESULTS AT THAI SON INTERNATIONAL IMPORT, EXPORT COMPANY
Overview of Thai Son International Import, Export company limited
The process of formation and development of the company
Name of the company: Thai Son International Import, Export Company Limited
Vietnamese name of the company: CÔNG TY TRÁCH NHIỆM HỮU HẠN XUẤT NHẬP KHẨU QUỐC TẾ THÁI SƠN
Type of business: Limited liabilitites Company
Authorized capital: 11.000.000.000 (eleven bilion vietnamdong)
Address: No 28 Lane 93 Hoang Van Thai, Ward Khuong Trung, Thanh Xuan District, Hanoi
Websize: http://www.thaisontrans.com.vn/
Legal representative of the enterprise: Vũ Hữu Sơn Visual history and devolopment of Thai Son International Import, Export Company Limited
Thai Son international import-export company was established on October 27,
In 2014, a limited liability company was established at the main office located at 28 Lanes 93 Hoang Van Thai, Khuong Trung Ward, Thanh Xuan District, Hanoi City, with a total charter capital of VND 1,200,000,000 and comprising two or more members.
In its early years, Thai Son faced significant challenges, starting with just four employees, including two capital contributors, an accountant, and a salesman After experiencing losses at the end of 2014 and the third quarter of 2015, the company turned a profit in the fourth quarter of 2015 Thai Son continues to focus on transportation services for domestic and international goods, generating annual revenue between 12,000,000,000 and 15,000,000,000 VND After nearly seven years of operation, Thai Son has maintained two main branches in Hai Phong and Hà Nội, with a current team of 20 members and total capital of 11,000,000,000 VND Looking ahead, Thai Son plans to make strategic investments to accelerate growth, capitalizing on the expanding international trade and enhancing logistics industry opportunities.
Business characteristics and production processes of the company
Domestic Container Shipping, Foreign Container Shipping
The shipping process involves signing a contract to transfer the customer's goods into the warehouse, completing necessary paperwork, and arranging cargo containers for shipment This includes loading and unloading the goods while ensuring their condition is checked throughout the process.
Delivery to the warehouse or receiving location
The consignee will sign to receive the goods intact
The type of model business:
Organizational characteristics of production and business at Thai Son
Import- export department delivery department
STT MAJOR SERVICES PROVIDED CODE
2 Transporting goods by inland waterways 5022
3 Transport of cargo by sea and ocean 5012
4 Other supporting services related to transport, details of shipping agency services, customs declaration, logistics services, freight forwarding
5 Warehousing and storage of goods 5210
The company's organizational structure, illustrated in the chart above, is a scientifically interconnected system led by the general director, who oversees various departments.
The General Director, equipped with essential managerial skills, oversees the daily operations of the company and is accountable to the Board of Members for fulfilling his rights and obligations As the legal representative of the company, the General Director bears full responsibility for all decisions made, particularly in relation to the Import and Export Department.
The Import and Export Department, comprising the Forwarding and Documentation Departments, plays a crucial role in the company's organizational structure This department is responsible for efficiently and promptly handling import and export contracts entrusted to its staff.
The forwarding department is essential for managing all procedures from the initiation of declarations to the delivery of goods to customers With a dynamic and well-trained staff, this department significantly contributes to building customer trust and credibility.
The Document Department is responsible for overseeing document storage and drafting the customs dossier, along with essential documents for the forwarding department They ensure that all tasks are fully assigned and consistently monitor the cargo handling process Additionally, they maintain regular communication with customers to provide necessary information regarding shipments.
The Business Department is essential for organizing and managing the company's activities, focusing on market research and customer acquisition This department significantly contributes to the company's operations by expanding market share and establishing valuable contacts Meanwhile, the Accounting Department plays a crucial role in maintaining financial integrity and supporting overall business functions.
The accounting department manages the company's expenses and customer receipts by verifying documents related to total expenses, cost of goods sold, sale prices, payment terms, and invoicing (both domestic and foreign) It ensures comprehensive recording of all accounting operations and provides accurate periodic reports Additionally, it handles advance payments to forwarders for services rendered.
The role involves advising the general director and overseeing the implementation of labor organization practices, effectively managing and allocating human resources to ensure worker protection and employee health care policies It emphasizes the importance of all departments adhering strictly to the company's internal regulations.
Organizational accounting system at Thai Son International Import,
Thai Son Co Ltd utilizes a centralized accounting system within its financial planning department to facilitate effective oversight, provide professional guidance, and maintain alignment between the chief accountant and company leadership.
The accounting department of the company has 3 employees including: tax accountant, payment accountant, Bank Accountant, cashier
- Develop and organize the implementation of the Company's accounting apparatus after being approved by the General Manager
- Propose the General Manager in planning the use, management of assets and capital of the Company;
- Under the authorization of the General Manager, performing information disclosure and shareholder relations
- Implement the financial and financial use plan according to the Company's business needs
- Perfore the accounting and financial work of the Company strictly according to the provisions of law and the Company's regulations
- Prepare statistical and accounting reports according to regulations and check the accuracy of reports made by other dependent units
- Guide and direct the attached units to perform the accounting work according to the prescribed regimes and the Company's policies
- Assist the Board of Directors and the General Manager in dealing with errors of the affiliated units related to the accounting and finance work
Assist the General Manager in consolidating the annual business plans from the attached units to formulate the comprehensive annual business plan for the entire Company, which will then be submitted for approval to the General Manager and the Board of Directors.
- Assisting the General Manager in organizing business information, business planning, monitoring and analyzing the implementation of monthly business plans of affiliated units;
Efficiently storing and preserving documents while centrally managing statistical accounting data is essential for compliance with legal standards and the Company's regulations This process ensures that relevant data is readily available to both internal units and external entities as required.
- Participate in building and commenting on the Company's regulations, economic, financial, accounting and technical norCode
2.1.4.3 Tasks of the internal members of the company
The Finance and Accounting Department is tasked with overseeing all accounting activities, ensuring that work and reports comply with current regulations and the company's charter Under the guidance of the General Manager, the department is responsible for reviewing financial statements and management reports, providing insights into the company's financial health Additionally, it collaborates with the General Manager on matters related to recruitment, transfers, salary adjustments, and disciplinary actions for accountants, while also reporting any financial and accounting law violations to higher authorities.
In companies with many partners, a broad customer relationship, it is necessary to have a debt accountant, they will manage all of the company's liabilities
- Liabilities to customers and suppliers o Customer debt:
Track customer debt collection( import customers payment before invoicing)
Export customers (except for some customers with compulsory credit contracts) must pay early
Comparing customer debt books to check debt details of each customer o Suplyer debt:
Accountant records into bookkeeping of supplier liabilities from the date of receipt of documents under each supplier's credit contract or shipping
Track customer receivables If the customer has paid off, the accountant will pay the supplier
- Understand the value-added tax law, circulars, and documents guiding the implementation of the value-added tax law
Directly work with tax authorities when incurred
Check and compare the value-added invoice with the input-output tax list of the company
Prepare a Monthly report on the input value-added tax of the company, classified by a tax rate
Prepare a monthly consolidated report on the input value-added tax of the company according to the deductible output allocation ratio
Monitoring reports on the state budget remittance, the company's tax refundTogether with general accounting, comparing tax report data of the agency
Compile dossiers of preferences for new investment projects that register new arising units or adjust to decrease when arising
Make a tax refund when it arisesQuarterly pay tax return vouchers for the whole company
Ensure to review the report on tax invoice usage for submission to the tax department Create a comprehensive archive to preserve value-added tax invoices over time, preventing any loss or damage.
Check and compare invoice cancellation record to adjust tax revenue in a time when it arises
The accountant needs to prepare a report on foreign debt and a report on payment of commissions to the customer
2.1.4.4 Accounting Organization of accounting voucher system Organizing the application of the accounting voucher system
According to the accounting voucher system issued under Circular 133/2016 Ministry of Finance
Accounting vouchers are papers and information carriers that reflect economic and financial operations that have arisen and completed, serving as a basis for recording accounting books
- All economic and financial operations arising in the production and business activities of the unit must be vouched and recorded fully, honestly and objectively in the accounting vouchers
- Accounting vouchers issued according to the enterprise regime include 5 criteria: + Target labor wages
+ Inventory target + Sales target + Target fixed assets
2.1.4.5 Organizing the application of accounting accounts system
The system of accounting accounts is applied according to the accounting regime
Main accounts used in the company:
2.1.4.6 Organizing the application of accounting records system
Implementing a comprehensive accounting book system is essential for processing information from accounting vouchers, facilitating the preparation of financial and management reports, and ensuring effective inspection and control.
Accountants utilize daily accounting vouchers to record economic transactions in accounting software, which automatically updates the general diary and detailed books Subsequently, they transfer information from the general diary to the ledger At the end of the period, accountants create a detailed summary table based on the general account and compare it with the ledger's general account They also verify the data using the balance sheet and prepare the accounting report by referencing the arising balance sheet and detailed table.
2.1.4.7 Introduction to the Thai Son International Import, Export company limited accounitng software
The company utilizes Misa accounting software to enhance its accounting processes Designed for small and medium-sized enterprises, Misa effectively manages essential accounting functions such as banking, purchasing, sales, invoice management, taxation, and inventory This software enables businesses to monitor revenues, expenses, and liabilities while automatically calculating profits, allowing business leaders to easily evaluate the performance of each department.
Misa software includes the modules:
Daily Note Periodic note Compare
Oringinal doccuments summary sheet of accounting vouchers of the same type
MISA software offers a comprehensive accounting interface tailored for companies, featuring complete modules Each member of the accounting department is equipped with a computer that has MISA software pre-installed, all connected to a centralized server.