7 ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS IN ICPARTNERS VIETNAM CO , LTD

MINISTRY OF FINANCE ACADEMY OF FINANCE - - NGUYEN THI DIEU LINH CQ55/21.15 GRADUATION THESIS TOPIC: ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS IN IC&PARTNERS VIETNAM CO., LTD Major Code Instructor : Corporate Accounting : 21 : MSc Nguyen Ba Linh HA NOI – 2021 GRADUATION THESIS DECLARATION I hereby to declare that this thesis is my own work and effort and that has not been submitted anywhere for any award Where other sources of information have been used, they have been acknowledged The data and results described in the thesis are derived from the actual situation of the practice company Ha Noi,……April, 2021 Student Nguyen Thi Dieu Linh Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS ACKNOWLEDGEMENT During the time studying at Academy of Finance, I received the support from my family, my friends and the enthusiastic guidance of the teacher in the school, especially the teachers in the Accounting Department who impart the value knowledge of accounting to me as well as create opportunities for me to have fact-finding about the IC&PARTNERS VIETNAM Co., Ltd Thanks to enthusiastic teaching and help, I have overcome difficulties in life, study and in the process of completing my final thesis First of all, I would like to express my endless thanks and gratefulness to my supervisor Msc Nguyen Ba Linh His kindly support and continuous advices went through the process of completion of my thesis His encouragement and comments had significantly enriched and improved my work Without his motivation and instructions, the thesis would have been impossible to be done effectively Next, I would like to thanks to Board of Directors of IC&PARTNERS VIETNAM Co., Ltd, especially the sisters in accounting department who spend their value time to help me collect relate data of my thesis Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS TABLE CONTENTS DECLARATION i ACKNOWLEDGEMENT ii TABLE CONTENTS .iii LIST OF DIAGRAMS vi LIST OF TABLES vi LIST OF PICTURES .vi LIST OF ABBREVIATIONS vi INTRODUCTION CHAPTER 1: GENERAL THEORY OF ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS IN ENTERPRISES 1.1 OVERVIEW OF ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS 1.1.1 Definition of salary and payroll related compensations 1.1.2 The function of salary and the task of accounting for salary 1.1.3 Changes in salary and social insurance regimes 11 1.2 THE BASIC CONTENT OF ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS IN ENTERPRISES 12 1.2.1 The form of salary payment in enterprises 12 1.2.2 Salary fund in enterprises 16 1.2.3 The form of payroll related compensations according 18 1.2.4 General accouting for salary and payroll related compensations 23 1.3 ORGANISATION SALARY AND OF BOOKKEEPING PAYROLL RELATED SYMSTEMS FOR COMPENSATIONS ACCOUNTING 34 1.3.1 Accounting books used in accounting for salary and payroll related compensation .35 Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS 1.3.2 Accounting forms 38 1.3.3 Presentation in financial statements 38 1.4 ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATION IN THE APPLICATION ACCOUNTING 41 CONCLUSION CHAPTER .43 CHAPTER 2: ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATION IN IC&PARTNERS VIETNAM CO., LTD 44 2.1 Overview of the company 44 2.1.1 The foundatig and development of company 44 2.1.2 Characteristics of business operation of company 46 2.1.3 Characteristics of organizing management mechanism 47 2.1.4 Characteristics of organizing accounting system 49 2.2 Human resources in ICP 53 2.2.1 Characteristics of labor in ICP 53 2.2.2 Classification of labor in the company 54 2.2.3 Labor management in ICP .55 2.3 PRACTICAL SITUATION OF ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS IN IC&PARTNERS VIETNAM CO., LTD 59 2.3.1 Classification of salary in ICP 59 2.3.2 The form of salary payment and salary calculation in ICP .61 2.3.3 Documents/ Vouchers used in accounting for salary and payroll related compensation .61 2.3.4 Accounts used in accounting for salary and payroll related 75 2.3.5 Insurance and personal income tax for foreigners 78 2.3.6 Accounting forms and books in company .81 Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS 2.4 EVALUATION OF ACCOUTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS IN IC&PARTNERS VIETNAM CO., LTD 94 2.4.1 Strength 94 2.4.2 Weakness 98 CONCLUSION CHAPTER .101 CHAPTER 3: SOME SUGGESTIONS FOR IMPROVEMENT OF ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS IN IC&PARTNERS VIETNAM CO., LTD 102 3.1 Some require the completion of solutions to improve the salary accounting system 102 3.1.1 Some ways to implement solutions to improve salary accounting system 104 3.1.2 Some conditions for implementing the solution to improve the salary accounting system .119 CONCLUSION CHAPTER .120 CONCLUSION 121 LIST OF REFERENCES 122 Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS LIST OF DIAGRAMS LIST OF TABLES LIST OF PICTURES LIST OF ABBREVIATIONS No Abbreviations Acc BOD Cr Description Account Board of director Credit Dr Debit ICP IC&PARTNERS Vietnam Co., Ltd PIT Personal Income Tax VAT VND Value Added Tax Vietnam Dong Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS INTRODUCTION Rational of the study The economy of our country is now a market economy, salaries are one of the issues that are most concerned by the State and Society Because only a small change in the salary policy of the State entails changing the daily life of millions of workers and the business results of all businesses For employees, salaries are a basic and important income: to feed themselves and their families For businesses, salaries are a part of the cost of production, but the goal of businesses is to reduce the cost of lowering the cost of products but cannot reduce the salary of workers So that the organization of labor management and salary payment properly and reasonably will promote the spirit, sense of responsibility and the attachment of employees to enterprises, this will be a premise for business to reduce the cost of lowering product costs, contributing to increase profits for businesses and create sustainable development for businesses Therefore, the accounting of salary and payroll related compensation in enterprises is a very important stage Based on the use of reasoning and based on the actual situation at the unit, with the enthusiastic guidance of MSc Nguyen Ba Linh and the staff in the company, I would like to study the topic "Accounting salary and payroll related compensation at IC&PARTNERS Vietnam Company Limited.” The aims of the study - System and clarification of basic theoretical issues on research topics - Researching and describing the situation of accounting of salary and payroll related compensation at the company - Analyzing, evaluating and proposing a number of comments to improve Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS the accounting of salary and payroll related compensation at the company Research methods  Methods: Accounting is economic science, with the object of research is accounting of salary and payroll related compensation Therefore, the method of research is based on dialectical materialism and historical materialism  Specific research methods: To research and present research results, I apply a combination of methods of theoretical research, field surveys, interviews, accounting consultations, and statistics, analysis, comparison to collect and process documents  Collect documents:  Conducting research on accounting of salary and payroll related compensation through reference to syllabuses, books, circulars, decrees Observing and studying accounting documents and financial statements in the Company in 2020 and information on the mass media  Conduct interviews, get direct opinions of accountants and other employees at the company and ask the instructor's opinions  Summary of processing of collected documents is a justification for research results: using descriptive statistical methods, qualitative analysis and comparison between the situation and the theoretical basis for deduction, induction and presentation of results The subject and scope of the study - Research subjects: research on the theory and situation of accounting of Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS salary and payroll related compensation at the company (how to calculate salary, how to transfer documents, payment methods and salaries, etc.) - Research scope:  About content: Focusing on studying the status of salary and payroll related compensation at the company on the perspective of financial accounting  About space: Studying the status of accounting of salary and payroll related compensation of the company  About time: Researching the theoretical issues and surveying the actual documents at the company in 2020 Structure of the thesis Graduation thesis consists of chapters: Chapter 1: Chapter 2: General theory on salary and payroll related compensation Accounting for salary and payroll related compensation in Chapter 3: IC&PARTNERS Vietnam Company Limited Some suggestions for improvement of accounting for salary and payroll related compensation in IC&PARTNERS Vietnam Company Limited However, due to my first time exposing to the actual work as well as the limited time and knowledge, my thesis can not avoid some mistakes in the content and layout I expect to receive the teacher’s reviews to make my thesis perfect Nguyen Thi Dieu Linh CQ55/21.15 GRADUATION THESIS 202 (2) Foreign language skills In the coming time, the accounting system in Vietnam is gradually aiming to apply international accounting standards, so it is necessary to know English That helps accountants easily access the international accounting process Propose the company to build a foreign language club to exchange experiences and practice English skills together The club can admit members outside the company in Hanoi city Create online groups on social networks such as Facebook, Zalo, Skype, ect, more members have a need to exchange experience in tax accounting, help members timely update information in English Every week, the company organizes offline meetings to exchange experiences, exchange English conversation, increase exposure Can create a large communication environment, which is very helpful for the company employees Sponsor staff to learn and take English tests like: TOEIC, TOEFL, IELTS, ect  SOLUTION 3: Enhance professional ethics for employees and customer information confidentiality (1) Enhance professional ethics for employees With the characteristics of an accounting and auditing consulting company, the security of internal information as well as information of customers are always placed on top of ICP Therefore, right from the recruitment of Nguyen Thi Dieu Linh_CQ55/21.15 110 GRADUATION THESIS 202 personnel, in addition to the labor contract, ICP needs to require employees to sign confidentiality agreement (2) Customer information confidentiality The company needs to develop a regulation on confidentiality information signed by employees: Nguyen Thi Dieu Linh_CQ55/21.15 111 GRADUATION THESIS 202 IC&PARTNERS VIETNAM THE SOCIALIST REPUBLIC OF VIETNAM COMPANY LIMITED Independence – Freedom – Happiness CONFIDENTIALITY AGREEMENT Confidentiality agreement is applied in IC&PARTNERS VIETNAM COMPANY LIMITED at 5th Floor, Building N02, GoldSeason 47 Nguyen Tuan, Thanh Xuan Trung Ward, Thanh Xuan District, Hanoi City, Vietnam, tax code: 0107012135 Hereinafter referred to as "Company" Hanoi, day 01 month 05 year 2019, I am: - Full name: PHAM VAN HAI - Birthday: 08/10/1985 - ID number: 151488025 - Permanent address: Dong An – Tu Van – Vu Thu – Thai Binh Hereinafter referred to as "Employee" I have read, understood and agreed to the following confidentiality commitment: Article 1: Confidential Information (a) "Confidential Information" includes data, information, in any form, related to the Company, related companies regarding capital or related interests, the Company's customers, or any Company's present or future business interests, for example: Original documents, copy as well as translated documents; (b) Information from or relating to business processes, internal management procedures, accounting, recording or reporting; (c) Information about the company's customers, including potential customers who have not signed a contract with the company Information about contracts, contract content and other information related to the Nguyen Thi Dieu Linh_CQ55/21.15 112 GRADUATION THESIS 202 Company's contractual relations; Information about employees, hiring plans or new personnel development; (d) Business or strategic plans; (e) Documents or other information deemed by the Company to be classified information and require Employees to comply with such forms, regulations, memos, notes, reports, and other documents in the work process Article 2: Acceptance of confidentiality obligations (a) Confidentiality of Confidential Information under the terms of this Agreement is a condition for working at the Company When approving to work for the Company, the Employee also accepts legal constraints for not disclosing any Confidential Information specified in Article (b) The confidentiality obligation applies to all confidential information that a person may obtain from the process of working at the company, whether in the form of employees, collaborators or any other form (c) The confidentiality responsibility applies even to confidential information that Laborers obtain before signing this commitment The confidentiality responsibility applies even when the Employee no longer works at the Company Article 3: Forms of penalty and compensation (a) Violation of security regulations may result in the Company applying internal corporate discipline in accordance with its rules, regulations and legal prosecution when necessary (b) The Company may impose penalties and compensation including:  All direct damage caused by Employee's behavior  Cost of hiring attorneys and other consultants to remedy the damage caused by Employee's behavior  All benefits gained by Employee due to violations of this commitment Nguyen Thi Dieu Linh_CQ55/21.15 113 GRADUATION THESIS 202  In the event that the Employee deliberately violates this provision for the purpose of personal gain, the Company will demand compensation for all direct and indirect damages in accordance with the law due to the Employee's behavior  Other penalties and compensation as prescribed by law Signature (Name and full name)  SOLUTION 4: Completing policies and regulations on labor, salary to improve the efficiency of salary accounting (1) Add some content about regulations on forced resignation of employees In the regulations, the company need to add manifestations, specific cases that lead to the decision to quit the job or not as below: (1.1) Reasons from employees: The company has the right to fire employees in the following cases: i Employees who commit theft, embezzlement, gambling, intentionally injuring and using drugs within the workplace, disclosing business secrets, technological secrets, and infringing upon ownership intellectual property of an employer, which causes serious damage or threat to cause particularly serious damage to the property and interests of the employer; ii Employees are disciplined for prolonging the wage increase period and repeating the offense within the period of deletion or disciplinary action for re-offense; iii Employees voluntarily give up 05 cumulative days in a month or 20 Nguyen Thi Dieu Linh_CQ55/21.15 114 GRADUATION THESIS 202 cumulative days in a year without a good reason Poor capacity: i Workers lack or have no prerequisites to that work For example, the company's receptionist has a hearing loss ii Workers lack a certain skill without additional / complete behavior, repeated violations and only error and no changes Weak working attitudes affect job performance: i When employees fail to meet the required time for work, often absent from important projects or worse, a weak attitude can slow work, affecting the quality of consulting services provided to customers ii Working or lack of productivity is the most common reason for businesses when they make decisions to lay off employees and this is the most difficult reason for approval In this case, the company must create conditions for employees to develop their full capacity The company cannot let employees leave if they have not spent much effort in training, helping or guiding them to achieve their own desired standards Health is not enough i Workers suffering from sickness and accidents have treated for 12 consecutive months for people who follow labor contracts with indefinite terms, have been treated for consecutive months, for employees who work under labor contracts with definite terms and Nguyen Thi Dieu Linh_CQ55/21.15 115 GRADUATION THESIS 202 more than half of the term of labor contracts for persons who follow labor contracts on a seasonal basis or on a certain job with a term of less than 12 months but labor capacity has not recovered ii When workers' health is recovered, workers are considered to continue to sign labor contracts, employees not guarantee to complete the workload due to their health, the company can absolutely for employees to leave (1.2) Reason from the company: Due to natural disasters, fire or other force majeure reasons in accordance with the law, the employer has sought all remedies but is still forced to narrow production, reduced work place (2) Add some regulations on employee benefits i Employees will receive allowances; use rental cars and taxis to help you get to customers In case the company customers outside the province need to stay, all expenses for renting hotel rooms and airfare costs are paid by the company (excluding laundry costs, luxury drinks) Documents proving that the business trip requires a Decision to go on a business trip (approved by the Board of Directors days before departure), the Employee's Business Travel Plan ii The employee is paid by the Company to pay for periodic health examination as prescribed Nguyen Thi Dieu Linh_CQ55/21.15 116 GRADUATION THESIS 202 iii The employee, depending on the approval of the General Director for each case, is paid by the Company for training fees related to his/her professional skills and other skills for the purpose of the Company’s work iv For some cases (decided by the Company), employees are paid by the Company for rent (including related utilities such as electricity and water, television cap, ect if any), tuition fees for their children workers (including related surcharges) Employees who are foreigners working at the Company are paid the cost related to applying for visa, passport and work permit, ect in Viet Nam Example: For Ms Nancy, in the process of signing a labor contract and working in Vietnam, the company needs to pay for the following expenses: + Payment of salaries and allowances; + Visa, Passport, Work permit; + Expenses for roaming allowance; + Payment of health examination fee; + Rent of the apartment with the cost of electricity, apartment water, management costs for foreign experts; + Expenditure for her child to go to school (with university level) + Expenses for her family to return home once a year;  SOLUTION 5: Improve labor management in quantity as well as in time, the company needs to fix objective errors caused by timekeeper by using timekeeping confirmation Nguyen Thi Dieu Linh_CQ55/21.15 117 GRADUATION THESIS 202  In order to improve the labor management in terms of quantity as well as in terms of time, the company needs to overcome the objective errors caused by timekeepers by using the time attendance confirmation  This time attendance confirmation is filled in by the employee who cannot check-in by fingerprint and must be certified by the group leader in that day  Then, this document must be given to admin in no more than 24 hours from the time confirmed Nguyen Thi Dieu Linh_CQ55/21.15 118 GRADUATION THESIS 202 Voucher 1.2: Time confirmation  Nguyen Thi Dieu Linh_CQ55/21.15 119 GRADUATION THESIS 202  SOLUTION 6: Labor management at the end of the period Develop a table to evaluate the quality of work of each employee periodically From there, assess the human resource situation to make appropriate and timely policies to promote the efficiency of work to create common values for the whole company Voucher 1.3: Job evaluation Nguyen Thi Dieu Linh_CQ55/21.15 120 GRADUATION THESIS 202 3.1.2 Some conditions for implementing the solution to improve the salary accounting system Salary calculation must be based on productivity, work efficiency, the company should increase the professional coefficient to increase the emulation of the work of all employees If employees work well, high efficiency will pay commensurate with the effort spent, consistent with the company's salary fund This assessment needs to be carried out monthly so it can be managed more closely and more accurately assessed The evaluation of this rating should be for the staff of each department to directly vote and comment On the other hand, if you want to pay the right salary for employees, it is necessary to determine the right salary fund of the business To this, it must firstly build and calculate the salary fund for businesses in a reasonable manner This requires businesses to rely on the state regulations, market surveys, forecast development situation of the plan year Nguyen Thi Dieu Linh_CQ55/21.15 121 GRADUATION THESIS 202 CONCLUSION CHAPTER The content of chapter presents some solutions to improve the internal accounting situation in general; separate salary accounting First, mention the requirements to improve accounting at the business Secondly, referring to specific solutions, each solution corresponds to the weaknesses in the company's accounting system presented in chapter The solutions given are fully documented, makes it easy for the company to Finally, describe the conditions to improve accounting at the business Through this ICP can refer to apply to improve the efficiency of the accounting system at the business Nguyen Thi Dieu Linh_CQ55/21.15 122 GRADUATION THESIS 202 CONCLUSION After the internship at ICP, the enthusiastic help of the guidance teacher and the accounting staff of the company, I has completed the project: "Accounting for salary and payroll related compensation at IC&PARTNERS Vietnam Co., Ltd." During the internship at ICP, I studied about accounting of the company in general and accounting for salary and payroll related compensation in particular I have learnt about the strength and weakness of company I boldly offers a number of solutions to improve the accounting of salary and payroll related compensation in ICP Practical lessons during the internship at the company helped me to consolidate and master the knowledge of the school, thereby seeing the relationship between theory and practice Although there are many attempts, but due to limited capacity and time, surely my thesis is still limited I look forward to the contribution and advice of the teachers to make my topic more complete Once again, I would like to express my sincere thanks to the board of directors and all staffs of IC&PARTNERS Vietnam Co., Ltd In particular, the instructor has dedicated to help me complete my thesis Thank you sincerely Nguyen Thi Dieu Linh_CQ55/21.15 123 GRADUATION THESIS 202 LIST OF REFERENCES • List of reference books Financial Accounting Curriculum: Editor: Prof Dr Ngo The Chi Financial Publishing House, Academy of Finance Accounting principles Curriculum: Financial Publishing House, Academy of Finance Organization of accounting work in enterprises Curriculum: Financial Publishing House, Academy of Finance The Political Economic Curriculum: Ho Chi Minh National Political Publishing House Vietnamese accounting regime: Statistical publisher Vietnamese accounting standards: Ministry of Finance issued Decision 15/2006- QD/BTC of the Minister of Finance Circular 133/2016TT-BTC Circular 111/2013/TT-BTC 10 Circular 92/2015/TT-BTC 11 The Resolution No 954/2020/UBTVQH14 12 Other circulars and documents Nguyen Thi Dieu Linh_CQ55/21.15 124 ... used in accounting for salary and payroll related compensation .61 2.3.4 Accounts used in accounting for salary and payroll related 75 2.3.5 Insurance and personal income tax for foreigners... SALARY AND PAYROLL RELATED COMPENSATIONS IN ENTERPRISES 1.1 OVERVIEW OF ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS 1.1.1 Definition of salary and payroll related compensations Definition... books used in accounting for salary and payroll related compensation 1.3.1.1 Types of accounting books Accounting work in an accounting unit is often more and complex, not only reflected in the number