Accounting for sales at general motors vietnam company

NATIONAL ECONOMICS UNIVERSITY CENTER FOR ADVANCED EDUCATIONAL PROGRAM ***************************** BACHELOR’S THESIS IN ACCOUNTING ACCOUNTING FOR SALES AT GENERAL MOTORS VIETNAM COMPANY Student’s name: Le Hong Van Class: Advanced Accounting 54B Intake: 54 Internship guide: Ms Tran Thi Viet Instructor: Tran Manh Dung, PhD, Hà Nội, 2016 CPA Table of Contents ACKNOWLEDGEMENTS ABBVEVIATION PREFACE CHAPTER 1: INTRODUCTION 1.1 The Rationale of the Thesis 1.2 Research Objective .6 1.3 Research Methodology 1.4 Research Dimesion .7 CHAPTER 2: THEORETICAL FRAMEWORK OF ACCOUNTING FOR SALES 2.1 The Nature of Selling Goods 2.1.1 Sales Definition 2.1.2 Methods of Selling Goods 2.2 Accounting for Sales 10 2.2.1 The Responsibilities of Accounting for Sales 10 2.2.2 Requirements of Accounting for Sales 11 2.2.3 Sales Definition In Accounting .11 2.2.4 Accounting Documents Deployed 12 2.2.5 Recording Process 12 2.2.6 Accounting Entries 15 2.5 Accounting for Selling Expense 19 CHAPTER 3: THE CURRENT SITUATIONS OF ACCOUNTING FOR SALES AT GENERAL MOTORS VIETNAM COMPANY 21 3.1 Features of GMV Company .21 3.1.1 Overview of GMV Company 21 3.1.2 List of Products .21 3.1.3 Features of Business Operation .21 3.1.4 Model of Sales 22 Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced 3.1.5 Organization of Sales Management 23 3.1.6 Characteristics of Firm’s Finance Activities 24 3.2 Accounting for Revenue at General Motors Vietnam 28 3.2.1 Accounting Documents and Procedures 28 3.2.2 Procedures of Accounting for Sales 35 3.3 Accounting for cost of goods sold .40 3.3.1 Accounting Documents and Procedures 41 3.3.2 Procedure of accounting for cost of goods sold 42 3.4 Accounting for Selling Expense 47 3.4.1 Accounting Documents 47 3.4.2 Procedure of accounting for selling expense 48 CHAPTER 4: SOME RECOMMENDATION FOR ACCOUTING FOR SALES AT GENERAL MOTORS VIETNAM COMPANY 51 4.1 Advantages of the General Management and Accounting Management at General Motors Vietnam Company 51 4.2 Assessment of Accounting Organization for Sales 53 4.2.1 Strengths 53 4.2.2 Weaknesses 53 4.3 Recommendations to Improve Accounting for Sales 54 REFERENCES 57 Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced ACKNOWLEDGEMENTS Prima facie, I would like to thank all those people making this thesis possible and a memorable experience for me First of all, I place my very sincere gratitude to my supervisor, Tran Manh Dung, PhD for the continuous support for my research, for his patience, motivation, enthusiasm, and immense knowledge His guidance helped me in all the time of research and writing of my bachelor thesis Besides my advisor, I would like to thank the Human Resource and Finance Department of General Motors Vietnam for offering me the three-month internship opportunity and leading me working on diverse exiting projects I am also thankful to my friends in National Economics University: Mai Ly and Kim Chi for being my teammates, for their gentle reminders about the deadline of each state of the thesis’s process I acknowledge my gratitude to my best friends, Quynh Anh and Huyen My, who also are my classmates, for the stimulating discussions, for the sleepless nights we had been working together before presentations or examinations, and for all the fun we had had in the last four years Last but not least, I also wish to thank my family: my parents, for giving birth to me at the first place and supporting me spiritually throughout my life Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced ABBVEVIATION AS : CBU : CKD : COGS: FP&A: GMV : GPSC: PO : SAP : SCT : SM : SME : VAT : VIN : WIP : After Sales Department Complete Built Up Completely Knock Down Cost of Goods Sold Financial Planning & Analysis General Motors Vietnam Global Purchase and Supply Chain Purchase Order Systems Applications and Products Special Consumption Tax Sales and Marketing Department Small and Medium Enterprise Value-Added Tax Vehicle Identification Number Work-In-Progress Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced PREFACE In recent years, along with the sufficient growth of the market economy as well as new technologies and innovations, more and more startups have been established and lessened the market shares of large companies with the price strategies Therefore, it is the hard time for large corporations to overcome and in order to operate smoothly and profitably as before, they need to have an accurate policy and appropriate long-term strategies Consequently, the accounting department plays an important role more than ever According to the information provided by accountants, managers will make management decisions that related to the success or failure of the company In the current market economy, heavy industry plays an important role in the development of Vietnam and substantially facilities Vietnamese economy in integrating into the global economy Open market not only provided Vietnam with great opportunities such as the foreign investment and the launching of so many international corporations in our country but also raised challenges to the reliability, integrity and publicity of financial statements and also put multinational entities into some typical hardship To solve those problems, it is necessary to educate young generation of the importance of accounting and accounting system of company in an appropriate method With the enthusiastic supports of the Finance Department in GMV and the instruction of my supervisor PhD, CPA Tran Manh Dung, I had chance to get access to real working environment and considerable knowledge of the accounting system and application of accounting theory obtained at university into treating real transactions in the normal operation The thesis contains: Chapter 1: INTRODUCTION Chapter 2: THEORITICAL FRAMEWORK OF ACCOUNTING FOR SALES Chapter 3: CURRENT SITUATIONS OF ACCOUNTING FOR SALES AT GENERAL MOTORS VIETNAM COMPANY Chapter 4: DISCUSSION AND SUGGESTIONS FOR IMPROVING ACCOUNTING FOR SALES AT GENERAL MOTORS VIETNAM COMPANY Due to the limited knowledge and lack of real experiences, my thesis may contain some mistakes and limitation However, through the work I hereby hope to get the valuable comments and advice to make a better preparation for the future career Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced TABLE OF FIGURE Figure 1.1: Secondary Data Collection Figure 1.2: Primary Data Collection .7 Figure 2.1: GMV’s wholesale financing process Table 2.1: Recognition of cash sale and credit sale 13 Figure 2.2: Accounting for revenue of products and services consisting VAT, SCT, Environment tax 16 Figure 3.1: GMV’s wholesale financing process 22 Figure 3.2: Diagram of the structure of General Motors Vietnam 23 Figure 3.4: Recording process in accounting software .27 Figure 3.5: Car dispatched note 31 Figure 3.6: VAT invoice for selling car 32 Figure 3.7: Spare Part Dispatched Note 33 Figure 3.8: VAT invoice for selling spare parts 34 Figure 3.9: The formula of documental transposition 35 Figure 3.10: Detailed book- Car 36 Figure 3.11: Detailed book – Spare Parts 37 Figure 3.12: Journal voucher No 511-01 38 Figure 3.13: Journal voucher No 511-04 38 Figure 3.14: Register of journal voucher .39 Figure 3.15: General ledger – Account 511 40 Figure 3.16: The procedure for COGS 43 Figure 3.17: Detailed book – Account 6321 (Tire) .44 Figure 3.18: Journal voucher – Account 632 (No 01) 45 Figure 3.19: General ledger – Account 632 46 Figure 3.20: Detailed book – Account 641 49 Figure 3.21: Journal voucher – Account 641 49 Figure 3.22: General ledger – Account 641 50 Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced CHAPTER 1: INTRODUCTION 1.1 The Rationale of the Thesis As the aforementioned information, a substantial period of time has passed since the Vietnamese government shifted to an open-door policy and started to aspire to foreign direct investment Penetrating into a new market like Vietnam provided global entities with both pros and cons Taking advantages of the new market, the cheaper manufacturing resources such as labor force and raw materials, international corporation in Vietnam also take the some difficulties due to the competition of other global companies as well as local manufacturing SMEs and the variety of consuming options These challenges predisposed the desire of some effective and appropriate strategies for them to attract clients Especially in Vietnam where automobile products usually purchased by people from the middle class and above, whom having a substantial knowledge in a wide range of fields such as financial information, the quality of product … before deciding make payment, the success of companies depends on the relationships inside and outside the entities Therefore, each interaction matters and each company in the industry keeps trying to prove the quality of goods and services by many manners that contain the positive income recognized transparently in the financial statements The definition of sales, which is getting beyond the basic one defining sales as the exchange of a commodity for money, currently is considered as a pivotal dimension of a business Not only is it pondered as a manner to conduct social reproduction, but it also is reckoned as the meeting of demand for goods which helps manufacturers to plan the production volume and consumption in the ongoing operation In the viewpoint of businessman, increase in sales means the raise of the rotation of capital and profits for the business entity A great performance of a company normally goes along with the improvement of living standards of its workforce In addition, accounting in the era of economics globalization is required to become a vital efficient method aiding organizations to take a look at their financial situation wholly Therefore, accounting in general and sales accounting in particular play a momentous role more than ever Nevertheless, sales accounting in many enterprises is merely deployed for tax declaration without analysis of selling factors and the usage of data on sales accounting is not really effective The research containing indicators of sales activities will raise the awareness of companies about the status of sales activities and provide the necessary information for people running business to evaluate the pros and cons existing within sales department Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced Thank to these above reasons and along with the kindly guidance of my supervisor PhD, CPA Tran Manh Dung, I have finally chosen the research topic “Improving the Accounting for Sales at General Motors Vietnam Company” 1.2 Research Objective This study has two main objectives The first one is to evaluate the current situation of accounting for sales in GMV and the second is to reflect both advantages and disadvantages of sales accounting within the company and then at the end of the study, I hereby hope that the conclusion and recommendation of my work might solve some difficulties which GMV is facing efficiently 1.3 Research Methodology To the research, variable methods of collecting data were applied Generally, I focused on two main types of data being primary and secondary data The process of collecting was taken place as below: - Secondary data was gathered first on account of its availableness Two sources of secondary data deployed in this thesis were internal and external one Internal sources used in my research was the documents within the company such as the invoice requests, invoice, Z-option sheets used for posting on SAP …I also picked up the information from financial statements and other related documents whilst the main source of external data came from the legal documents, internet and so on Figure 1.1: Secondary Data Collection Internal sources Invoice requests Invoices Z-options Financial statements External sources Legal documents Newspapers Internet Ohers Secondary data After collecting the secondary data, primary data was collected This data are collected through the analyzing process In this study, I employed the method of observation and interview During the internship period, I had many opportunities to get knowledge from observing the work of sales accountants as Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced well as accounting computer system Besides, I decided to make some interviews directly and indirectly in addition via emails, telephone and internet Figure 1.2: Primary Data Collection From Interview Primary data From Observation After the collecting procedure, the data processing was performed The process included analysis, comparison and synthesis to reflect and assess the accounting for sales in GMV 1.4 Research Dimesion This research was taken place within GMV during my internship period The data collected and analyzed in the report were in the accounting books for sales of 2015 In addition, the report will focus on analyzing Accounting for sales, especially in three main parts: Sales Revenue accounting, Costs of goods sold accounting and selling expense accounting Supervisor: Tran Manh Dung, PhD, CPA Accounting 54B Le Hong Van – Advanced ... OF ACCOUNTING FOR SALES Chapter 3: CURRENT SITUATIONS OF ACCOUNTING FOR SALES AT GENERAL MOTORS VIETNAM COMPANY Chapter 4: DISCUSSION AND SUGGESTIONS FOR IMPROVING ACCOUNTING FOR SALES AT GENERAL. .. SOME RECOMMENDATION FOR ACCOUTING FOR SALES AT GENERAL MOTORS VIETNAM COMPANY 51 4.1 Advantages of the General Management and Accounting Management at General Motors Vietnam Company ... 2.2.6 Accounting Entries 15 2.5 Accounting for Selling Expense 19 CHAPTER 3: THE CURRENT SITUATIONS OF ACCOUNTING FOR SALES AT GENERAL MOTORS VIETNAM COMPANY 21 3.1 Features