Accounting for salary and payroll related compensations in Ha Noi River Road transportation Join stock Company

INTRODUCTION 1. The importance of the research topic Labour is not only a necessary condition for human evolution but also a decisive factor for the existence and development of the production process. Moreover, in all social regimes, labour always plays a very important role in the regeneration of material and spiritual wealth for society. Nowadays, the human factor is always at the forefront in enterprises. Labours only bring out their best ability when their labour force is compensated appropriately. The worthy compensation here is nothing more than salary and salary allowances. Salary is a monetary representation of the labour cost that the enterprise pays to employees over time, according to the amount of work that the employee has devoted to the enterprise. Salary is also an economic lever to encourage hardworking spirit of employee, stimulating and creating employees interest in the results of their jobs. Recognizing the importance of salary accounting and salary allowances, by the knowledge learned in combination with practical research at Hanoi River transport Join Stock Company, I chose the topic Accounting for salary and payroll related compensations in Ha Noi River Road transportation Join stock Company” (HARITCO,.JSC) for my graduation internship dissertation.

Graduation thesis Academy of Finance STATEMENT OF ORIGINAL AUTHORSHIP I assure that the thesis "Accounting for salary and payroll related compensations" is my own research based on the actual data of HARITCO.,JSC, under the guidance of Mr Mai Ngoc Anh If there is anything wrong, I will take full responsibility AUTHORSHIP OF GRADUATION THESIS TRAN THI THU AN Trần Thị Thu An CQ54/21CL.01Page Graduation thesis Academy of Finance TABLE OF CONTENTS Trần Thị Thu An CQ54/21CL.01Page Graduation thesis Academy of Finance LIST OF ABBREVIATIONS Trần Thị Thu An CQ54/21CL.01Page Graduation thesis LIST OF Acc DIAGRAMS Cr Academy of Finance Account Credit Dr Debit VND Viet Nam Dong Trần Thị Thu An CQ54/21CL.01Page Graduation thesis Academy of Finance LIST OF TABLES Trần Thị Thu An CQ54/21CL.01Page Graduation thesis Academy of Finance LIST OF IMAGES INTRODUCTION The importance of the research topic Labour is not only a necessary condition for human evolution but also a decisive factor for the existence and development of the production process Moreover, in all social regimes, labour always plays a very important role in the regeneration of material and spiritual wealth for society Nowadays, the human factor is always at the forefront in enterprises Labours only bring out their best ability when their labour force is compensated appropriately The worthy compensation here is nothing more than salary and salary allowances Salary is a monetary representation of the labour cost that the enterprise pays to employees over time, according to the amount of work that the employee has devoted to the enterprise Salary is also an economic lever to encourage hardworking spirit of employee, stimulating and creating employees' interest in the results of their jobs Recognizing the importance of salary accounting and salary allowances, by the knowledge learned in combination with practical research at Hanoi River transport Join Stock Company, I chose the topic " Accounting for salary and payroll related compensations in Ha Noi River Road transportation Join stock Company” (HARITCO,.JSC) for my graduation internship dissertation The purpose of research Trần Thị Thu An CQ54/21CL.01Page Graduation thesis Academy of Finance - To research and clarify the basic theoretical issues of salary and payroll related compensations - To research on accounting for salary and payroll related compensations in enterprise - To analysis, assesses and recommends any solutions to complete accounting for salary and payroll related compensations in enterprise The object and scope of research - Object of research: Accounting for salary and payroll related compensations in Ha Noi River Road transportation Joint stock company (Form of salary payment, transfer voucher, …) - Research scope: + Contents: Accounting for salary and payroll related compensations in enterprise in aspect of financial – accounting + Business: Ha Noi River Road transportation Join stock Company; No 881, Bach Dang Road, Hai Ba Trung Ward, Bach Dang District, Ha Noi City, Viet Nam + Period: Accounting for salary and payroll related compensations in 2019 Research methodology Research is based on the methodology of dialectical materialism and historical materialism Specific research methods: In order to collect and process data and present research results, the authors apply a combination of methods of theoretical research, fieldwork, interviews, expert consultation, statistical data, analysis, comparison as follows: - Collection of primary documents: The author asked and consulted directly with the accountants and other employees in Ha Noi River Road transportation Join Trần Thị Thu An CQ54/21CL.01Page Graduation thesis Academy of Finance stock Company In addition, the author explores research issues through consulting with instructors and accounting experts - Collection of secondary documents: The author conducted research theoretical issues through reference textbooks, articles, academic papers… about accounting Collect secondary documents on the situation by observing methods, studying documents, accounting books, financial statements of Ha Noi River Road transportation Join stock Company in 2019 Information could also be collected via the media and other documents - Summarizing and processing data as evidence for the research results: The author uses descriptive statistical methods, qualitative or quantitative analysis and comparison between the reality and theoretical basis or accounting regime to present research results The structure of the dissertation Chapter 1: General theory on accounting for salary and payroll related compensations Chapter 2: Accounting for salary and payroll related compensations in Ha Noi River Road transportation Join stock Company Chapter 3: Solution to complete accounting for salary and payroll related compensations in Ha Noi River Road transportation Join stock Company Trần Thị Thu An CQ54/21CL.01Page Graduation thesis Academy of Finance ACKNOWLEDGEMENTS Ha Noi, May 25th, 2019 To Teachers in Academy of Finance, To Director and all of Officer Staffs in HARITCO.,JSC First of all I would like to express my deepest gratitude to all teachers in Accounting Faculty I'm grateful to you for your help and transfer of precious experience which will prepare knowledge us for our career Especially, I would like to express my gratitude to my guidance teacher, Mr Mai Ngoc Anh, who supports me a lot during my internship I want to take this opportunity to say thank to the Board of Directors as well as all the staff in accounting department of the company Thank you very much for your kind corporation during my internship Sincerely Trần Thị Thu An CQ54/21CL.01Page Graduation thesis Academy of Finance CHAPTER 1: GENERAL THEORY ON ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS 1.1 Overview of salary and payroll related compensations 1.1.1 Definition 1.1.1.1 Definition of salary - According to Marxism's theory: Salary is a living expression of money of labour value - On the market economy: If labour is regarded as a commodity, salary is the price of labour - In Viet Nam during the period of central planning, salary is a part of the social product expressed in cash paid to employees based on the quantity and quality of labour, which may be specified in an employment contract It is a strong production stimulus as it encourages workers to work hard, improve skills and technical, therefore, increase labour productivity - In businesses, salary is considered as part of company expense Thus, spending on salary is spending on development investment Moreover, salary is an important lever to improve business performance of the enterprise On the other hand, organizing fair and reasonable salary in enterprise will contribute to maintaining, strengthening and developing its labour force - To the labour, salary is their income They can only give their best to work if that job gives them enough to cover their life In addition, they work to get salary and they try hard to get more income That is why they always force to improve their knowledge, level, and their ability to meet the change of social - Salary is typically determined by comparing market pay rates for people performing similar work in similar industries in the same region Salary is also determined by levelling the pay rates and salary ranges established by an Trần Thị Thu An CQ54/21CL.01Page 10 equivalent accounting”, then click “Payment voucher” CG CH Description: Payment of salary in December 2018 CI.Booked date: 31/08/2019 CJ Date of voucher: 31/08/2019 CK Debit: Acc 3341 CL Credit: Acc 1111 CM Amount: Complete with the amount of Net Income from “Payroll sheet August 2019”: 1,236,230,808 VND - After that, click “Save” to finish this entry CN CO CP CQ CR CS CT CONCLUSION CU Through the information presented in chapter two, I have an overview of HARITCO., JSC as well as the whole process of accounting salary and payroll related compensations CV The information mentioned in chapter provides a detailed view of the accounting organization of salaries and deductions from salaries: accounting vouchers used, accounting forms and accounting books Thereby, we can find the advantages as well as the irrationality in operating the salary accounting of the company CW The advantages and disadvantages of salary accounting and compensation related to salary and improvement solution of the company will be presented in chapter CX CY CHAPTER 3: SOLUTION TO COMPLETE ACCOUNTING FOR SALARY AND PAYROLL RELATED COMPENSATIONS IN HA NOI RIVER ROAD TRANSPORTATION JOIN STOCK COMPANY CZ DA 3.1 General comment about accounting for salary and payroll related compensations in HARITCO.,JSC DB As everyone knows, salary constitutes an important part of the living of employees Not only that, salary is also an economic lever to encourage enthusiasm for work, to compete with each other and to create an interest in the results of your work Therefore, the work of salary and payroll related compensations are extremely necessary during the operation of the company After a period of intern, learn about the actual situation of accounting on salary and payroll related compensations at Ha Noi River Road transportation Join stock Company and on the basis theories learned, I give a few comments below DC 3.1.1 Advantages • The structure and the management scale of the company is relatively compact, organized in a centralized form for easy management of the Board of Directors The level of specialization of each department and unit is clear and specific All departments and units have the connection without overlapping of responsibilities among the departments in order to help the specialized departments and units understand the details of their fields In particular, the accounting process is built relatively appropriate to the current operating scale of the company Accountants are all qualified and knowledgeable about the current accounting regulations, standards and regime The division of tasks facilitates the complete and accurate accounting and serves the timely management needs of the company • Regarding labor management and recruitment: the labor force at the unit is increasingly rejuvenating with the love of the job and the enthusiasm at work The number of employees who have a degree and are continuing a higher education program is also increasing every year The company always creates conditions for employees to have the opportunity to improve their knowledge and gain more experience through seminars, sending to attend specialized classes for officials The recruitment of employees at the Company is relatively clear, scientific and reasonable Candidates who are recruited must undergo rigorous tests to assess skills and expertise In general, there is no fraud or special situation during the examination process After being recruited, candidates continue to have a probationary period so that the Board of Directors as well as the departments and units concerned have a more objective view of competence and enthusiasm • Human resource management in the company is relatively tight, there is a comparison of timekeeping with personnel statistics to ensure fairness between employees For the case of leave entitlement to social insurance is closely monitored The vouchers must be fully signed by the relevant departments and individuals to be paid • Regarding accounting of salary and payroll related compensations: The company chooses the accounting form of the General Journal This is a form suitable to the size and nature of the company’s industry It is convenient for assigning accounting personnel, avoiding duplication of records, creating a unity between salary accounting practice and general accounting Bookkeeping is carried out regularly and continuously Accounting vouchers are always updated fully, timely, organize the rotation of documents between scientific and reasonable departments, easily for checking and comparing books With this form, the financial statement is made quickly and accurately • In the process of salary calculation always ensures accuracy, consistency in months and months of the year The form of timebased payment is convenient for monitoring and timekeeping at enterprises • Accounting of salary and payroll related compensations comply with the State's regulations The Company's accountants always keep up to date with the latest current documents and regulations issued by the State, properly deduct salary deductions and promptly update and amend when necessary system of accounting books and vouchers true to the accounting regime Some samples of the Company books are adjusted to the job requirements but still ensure compliance with regulations and have a high consistency • The documents are presented fully signed, guaranteed accuracy, not erased The collection and handling of documents are carefully, scientifically and reasonably facilitated for later calculation and examination • Salaries, Social Insurance, Health Insurance, Unemployment Insurance and Trade Union Funds are always carefully and accurately calculated according to the rate prescribed by the State, appropriately distributed to each subject to expenditures Enterprise fees and obligations payable to the regulator • The payment of payables and receivables must be clear and in accordance with the prescribed regime The payment of salary to employees in cash, paid on time as agreed Thus, create trust, comfortable psychology, improve the sense of responsibility of employees DD 3.1.2 Disadvantages DE Besides the mentioned advantages, the current situation of salary accounting and salary deductions still have some disadvantages that need to be overcome as follows: • Currently, the company's accountant does not accrue allowances for employees, but only when the month which approval and leave of the Organization and Administration, the company will account for this expense and account it into expenses incurred This is unreasonable because the employee's leave time is 12 days / year, and must be accounted equally for all months Therefore, according to the provisions of the accounting regime, the monthly salary deduction must be made for production workers in order to distribute evenly and correctly expenses, helping to stabilize wage costs, especially for enterprises have a total salary fund relatively relative to the company Moreover, the deduction of leave wages is an integral part of direct labor costs so the absence of the company also means that the company has not fully implemented the requirement of managing expense items , especially in the months with a high number of employees on leave, not only the number of manufactured products decreases but the labor costs also increase due to the increase of the wage of the leave, which in turn pushes up the price of unproductive products physical This is also a disadvantage for the company • The company is paying workers in cash with a large number of employees; therefore, large amount of money is easy to cause confusion, errors, and loss in the payment process Moreover, this method of payment takes a lot of time, is not scientific, and does not meet the needs of employees • Accountants only open detailed book of Acc 3341 for all employees including office staffs and factory employees, making it difficult to follow up and check later • Compared with other businesses, the remuneration for reward and reward policies of the company is still low, not promoting the whole working spirit of all employees On the other hand, the workers in the unit are mainly from disadvantaged families but the policy to support these workers is not really high The company needs to pay special attention to holiday bonus policies DF DG 3.2 Solution to complete accounting for salary and payroll related compensations in HARITCO., JSC DH 3.2.1 Completing in forms of salary and salary calculation - With the current form of salary, labour days are the basis for calculating the basic salary to be paid to employees Therefore, accurate timekeeping is essential to ensure fairness of the labour force spent However, this form does not reflect the sense of responsibility and working attitude of each employee To overcome this situation, the company should set up a daily work reporting system managed by the head of the department At the end of the day, all employees will turn in a job report, including what they did, the percentage of completion Doing so helps management can manage their employees while helping them tracks the progress of the work that their department undertakes - Separating social insurance participants and non-social insurance participants to build a list of employees paying social insurance, from which to simplify the calculation of payroll related compensations DI 3.2.2 Completing in accounts used and accounting policy - For salaries paid to employees, all are gathered into account 3341 The company needs to separate this account into the accounts for easy tracking As follows: • Account 3341: applies to permanent employees • Account 3348: for outsourced workers - For salary, now the company has not made allowance This can have a negative impact on business activities during the period, for example, when there are many employees on leave, resulting in higher labour costs and slow progress due to lack of labour Therefore, the company should make accrual payments in advance to ensure stable salary costs as well as the effectiveness of cost management, to avoid adversely affecting business results Regarding the deduction of leave for employees' leave, the Company should apply the deduction level and the percentage of monthly leave allowances based on the following formula: DJ DK DL Amount accrued in accordance with the annual salary planThe S payment to accrued employee xrate according to the annual lea =alary DM DN DO Total allowable leave pay for employees as planned DP The accurred rate according to the annual leave plan = DQ Total main salary to be paid to employees DR DS DT DU Regarding the accrual allowable salary accounting, the accountants shall as follows: - Monthly conduct payroll related compensations: DV Dr Acc 622: Direct labour costs DW Dr Acc 6271: Cost of workshop staff DX Dr Acc 6421: Management personnel expenses DY Cr Acc 335: Accrued expenses - When calculating the actual leave pay to the workers DZ Dr Acc 335: Accrued expenses (Amounts accrued) EA - Cr Acc 334: Payables to employees If the accrued expenses are smaller than the actual payable amounts, additional deduction shall be made: EB Dr Acc 622: Direct labour costs EC Dr Acc 6271: Cost of workshop staff ED Dr Acc 6421: Management personnel expenses EE Cr Acc 335: Payables to employees (deduction amount) - If the deducted amount is larger than the payable amount, record the expense reduction: EF Dr Acc 335: Accrued expenses (The deducted amount is larger than their actually payable amount) EG Cr Acc 6271, 622, 6421 EH 3.2.3 Completing vouchers EI Labor documents should be circulated regularly to the accounting department for early payment Salary accountants need to gather weekly vouchers to account EJ All transactions related to salary accounting and payroll related compensations are fully and timely updated by accountants in accounting software However, monthly, accountants still check economic transactions arise and print documents to save more hard copies, ensuring data safety principles All book templates are in accordance with the regulations of the Minister of Finance The company can add documents to determine the time and volume of work completed for each ship such as: - Voucher confirming the completed workload Overtime ticket EK All documents are always presented in detail and clarity EL 3.2.4 Completing in accounting books for salary and payroll related compensations  Detailed accounting book EM The order of conducting detailed bookkeeping in salary accounting and payroll related compensations at the company is quite complete and reasonable For better, the company needs to take measures to improve the content on the accounting books For example, the company should add the following contents to the Timesheet: Number of standard work in the month, number of social insurance benefits, number of paid leave days, % of unpaid days off Payroll for employees should have an additional column for penalties for violating wages and a bonus column In case of violations, employees must pay a fine according to the company's regulations  General accounting books - Each employee should raise awareness and knowledge of the General Journal method being applied at the unit, combining close checking and checking so that duplication and overlap are minimized The bookkeeping needs to be consistent with each other and include timely, reasonable and accurate figures - Salaries and payroll related compensations have relatively many types of books, so the accountant should ensure the accuracy and consistency of information between the books and should use more accounting software in the book, combining manual and computer recording to avoid fraud and loss EN The accountant should proceed to record the book as soon as a transaction arises, such as an advance payment transaction, because this is an irregular expense, so it can be omitted Similarly, in case of recording payroll related compensations paid to employees on behalf of insurance agencies, the accountant should record the arising operations in the General Journal and General Ledger of related accounts after receiving the certificate of sick leave for enjoying social insurance and the voucher of social insurance benefits Accumulation of accounting entries should not be cumulative at the end of the month as this may cause errors and duplications that affect the quality and timeliness of accounting information EO 3.2.5 Completing in accounting reports for salary and payroll related compensations - The importance of mangament reports is enormous, so accountants need to use them to make management reports on salaries and payroll related compensations Based on these management reports, the Board of Directors and the management units at the unit will monitor the situation of salary fluctuations at the unit Management reports can be broken down into reports of each department and unit for more detailed and specific monitoring From there, the Board of Directors can promote strengths in the labor situation and the accounting of wages at the unit and minimize unnecessary limitations - Establish a system of salary lists including: expected personnel for the following year, expected number of working days, salary policy and a system of rational allocation norms for each subject to calculate the unit price of products and goods according to the method of fixed wages calculation in the most reasonable and fair manner to promote working spirit of employees, increasing productivity and business efficiency for the company EP EQ CONCLUSION ER During my internship at HARITCO., JSC, with the help and support of my guidance teacher and accountants at the company, I have finished my thesis on “Accounting for salary and payroll related compensations in Ha Noi River Road transportation Join stock Company” ES In addition, during my internship at HARITCO., JSC, I have been studying and doing accounting practice in general and studying accounting for salary and payroll related compensations in particular I realize that salary accounting plays a very important role in the business, so it needs to be completed I have identified the strengths and weaknesses of salary accounting and salary deductions to propose solutions to help businesses improve the current situation ET The practical lessons during the internship at the company helped me to consolidate and master the school's knowledge, thereby seeing the relationship between theory and practice EU Despite many efforts, but due to the capacity and time is limited, certainly my thesis still has limitations I look forward to the contributions and advice of instructors to make my topic more complete EV Once again, I would like to express my sincere thanks to the board of directors and all employees of HARITCO., JSC In particular, the instructor wholeheartedly helped me to complete my thesis EW EX EY Thank you sincerely EZ LIST OF REFERENCES FA - List of references books Prof PhD Ngo The Chi, PhD Truong Thi Thuy (2010), "Financial Accounting Textbook", Finance Publishing House Th.D Luu Duc Tuyen, Th.D Ngo Thi Thu Hong (2011), “Organization of accounting system”, Finance Publishing House Circular No 200/2014 / TT-BTC dated December 22, 2014 of the Ministry of Finance Decision 595/QĐ-BHXH dated April 14,2017 of the Vietnam social security There are also other circulars and documents List of documents provided by the Company Regulations of the Company Regulations of salary of the Company Relevant accounting books and vouchers There are also documents from other sources of information FB FC FD FE FF ... at Hanoi River transport Join Stock Company, I chose the topic " Accounting for salary and payroll related compensations in Ha Noi River Road transportation Join stock Company? ?? (HARITCO,.JSC) for. .. salary and payroll related compensations Chapter 2: Accounting for salary and payroll related compensations in Ha Noi River Road transportation Join stock Company Chapter 3: Solution to complete accounting. .. of salary accounting and payroll related compensations Further details on salary and payroll related compensations of the Ha Noi River Road transportation Join stock Company will be exhibited in