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Solutions to prevent and limit risks in international payments at vicofood vn ,jsc

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Tiêu đề Solutions to Prevent and Limit Risks in International Payments at Vicofood VN.,JSC
Tác giả Pham Thu Hang
Người hướng dẫn Ms. Nguyen Thi Hong Mai (MA)
Trường học Banking Academy
Chuyên ngành Foreign Languages
Thể loại Graduation Thesis
Năm xuất bản 2021
Thành phố Hanoi
Định dạng
Số trang 75
Dung lượng 1,83 MB

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BANKING ACADEMY FOREIGN LANGUAGE FACULTY -  - GRADUATION THESIS Solutions to prevent and limit risks in international payments at Vicofood VN.,JSC Advisor : Ms Nguyen Thi Hong Mai (MA) Student : Pham Thu Hang Student ID : 20A7510057 Class : K20ATCC Academic Year : 2017-2021 Hanoi, May 2021 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014128989021000000 DECLARATION Student name: Pham Thu Hang Class: K20ATCC Student Number: 20A7510057 Declaration I declare that the work attached is entirely my own and that I have given due acknowledgment as required by Faculty of Foreign Languages I understand that the work submitted may be reproduced and/ or communicated for the purposes of detecting plagiarism Signed _ Date Plagiarism By signing the declaration, you are stating that you have not plagiarized Use the following as a checklist - This work is entirely my own - I have not copied another student’s work - I have not copied or used in any way material from a text, journal, website or other published source without acknowledgment (including non – English sources) - I have cited and referenced fully and correctly as required by Faculty of Foreign Languages where applicable - I have not reworded material from another source and presented it as my own - I have not used this work in a previous class (self – plagiarism) i ACKNOWLEDGMENTS My full name is Pham Thu Hang and I am a student of Faculty of Foreign Languages, Banking Academy Now I am a final-year student, so my responsibility is finding a new workplace as well as finishing the interning task for graduating The three-month internship period at Vicofood Company was an unforgerttable experience for me Not only did I accumulate more practical knowledge and skills, but I can also correct my shortcomings and improve myself Therefore, I become more confident and get ready to take on the job after graduating This report was completed thanks to my efforts as well as the instruction and suggestions from the professors of Faculty of Foreign Languages, Banking Academy, the leaders and people at Vicofood Company First of all, I would like to dedicate the most sincere gratitude to the professors of Faculty of Foreign Languages, Banking Academy for giving their useful knowledge and accompanying me for years In particular, I would like to express my deepest thanks to my advisor, Ms Nguyen Thi Hong Mai, who helped me with all her heart and meticulousness Thanks to her, I can come up with the best ideas, content and complete my graduation thesis Next, I would like to thank Vicofood VN.,JSC for creating conditions for me to practise and have the opportunity to experience in the company Special thanks to the staff of the company and the leader who helped me during my internship Thanks to their considerate suggestions and advice, I can finish the job successfully and gain a lot of experience Despite making efforts to research, my report still has many shortcomings because of my limited knowledge and understanding I look forward to the comments and suggestions from professors, so the report can be more perfect SINCERELY, Pham Thu Hang ii Table of Contents CHAPTER 1: INTRODUCTION 1.1 Background of the study 1.2 Research reasons 1.3 Objectives of the study 1.4 Significance of the study 1.5 Scope and limitation of the study 1.6 Definition of terms CHAPTER 2: REVIEW OF RELATED LITERATURE 2.1 The role of international payment 2.2 Terms of payment 2.2.1 Cash in advance 2.2.2 Documentary Collection method 2.2.3 Documentary Credit Method 2.2.4 Open account 10 2.3 Type of risks in international payment 11 2.3.1 Notion of risk 11 2.3.2 Risks in international payment 12 CHAPTER 3: METHODOLOGY 16 3.1 Data collection 16 3.2 Data analysis 17 3.3 Reliability and Validity 17 3.4 Research ethics 18 CHAPTER 4: FINDINGS AND ANALYSIS 19 4.1 Overview of business results and payment international method 19 4.1.1 Overview of the company’s business result (2018-2020) 19 4.1.2 Overview of the payment organization for import-export activities of the company 22 4.2 Current status of payment activities at vicofood 27 4.2.1 According to the export situation 27 4.2.2 According to the export market 31 4.2.3 By payment period 37 4.2.4 Based on payment costs 38 4.2.5 According to payment procedures 39 iii 4.3 Risks in international payment activities and overall assessment in international payments at Vicofood 41 4.3.1 Type of risks which Vicofood often faced with 41 4.3.2 Achievements in international payment activities at Vicofood 50 4.3.3 Failures in international payment activities at Vicofood 52 CHAPTER 5: CONCLUSION AND RECOMMENDATION 53 5.1 Conclusion 53 5.2 Recommendation to Vicofood 54 5.2.1 Solutions for payment methods at the company 54 5.2.2 Relationship with banks 55 5.2.3 Human resource 56 5.2.4 Strengthening Vicofood’s business and position 57 5.2.5 Other solutions for payment at company 57 5.3 Recommendation to banks 58 5.4 Recommendation for the government 59 iv LIST OF ABBREVIATIONS Abbreviation Full form BIDV Bank for Investment and Development of Vietnam CAD Cash against documents CIF Cost, Insurance and Freight FOB Free on Board IP International payment L/C Letter of credit T/T Telegraphic Transfer UCP The Uniform Custom and Practice for Documentary Credits VCB Vietcombank WTO The World Trade Organization v LIST OF TABLES Tables Table 1: Comparison Documents against Payment and Documents against Page Acceptance Table 2: Business statistics at Vicofood (2018- 2020) Table Payment value of exports at banks over years (2018 – 2020) 19 22 Table 4: The situation of using payment methods over years (2018-2020) 28 Table 5: The situation of using payment methods in Asian market (2018- 33 2020) Table 6: The situation of using payment methods in Africa (2018-2020) 36 Table 7: Vicofood’s international payment operating expenses (2018-2020) 39 Table 8: The export situation of Vicofood to some countries in Africa 47 vi LIST OF FIGURES Figures Page Figure 1: The level of risk in international payment (Seyoum, 2009) Figure : The process of cash in advance Figure 3: Documentary collection process Figure Letter of Credit payment process Figure 5: Open account process 11 Fingure : Business statistics at Vicofood (2018- 2020) 20 Figure T/T payment process at Vicofood 23 Figure :CAD method process at Vicofood 24 Figure : L/C payment process at Vicofood 26 Figure 10: Structure of using payment methods according to contract 29 (2018-2020) Figure 11: Structure of using payment method according to payment value 30 (2018-2020) Figure 12: The fluctuation of USD / VND exchange rate from 2018 to 2020 33 Figure 13: Lending interest rate from 2018 to 2020 45 vii ABSTRACT: In the trend of deepening integration into the world's economy, the import-export activities in our country also grow strongly in positive directions Payment activities, especially international payment activities, play a very important role in operating import-export activities effectively and efficiently Therefore, risk management in international payment is a must-have aspect in import-export company The aim of this paper is to find solutions to limit and prevent risks in international payment at Vicofood The quantitative method used in this research is conducted by collecting most information from an online interview and raw data from financial reports of Vicofood By analyzing the applied payment methods in reality and clarifying type of common risks in international payment activities at Vicofood, some feasible measures were proposed to minimize losses as much as possible viii CHAPTER 1: INTRODUCTION 1.1 Background of the study In the era of globalization, international trade activities, including import and export activities, have been developing at light speed As the lifeblood of the economy, import and export activities important aspects in any countries in the world because this is the shortest way to contribute to increases in wealth accumulation and solving of debt burden for most countries of the world Large or small countries, whether developed at high or low levels, have a desire to boost import and export activities Starting from the extremely vital role of import and export activities, all countries in the world today are entering a new race which is promoting import-export activities, and Viet Nam is no exception Only by stimulating import-export activities and opening up the economy will Vietnam have opportunities to achieve socio-economic goals and stabilize people's lives Therefore, when Vietnam joined and became an official member of WTO, import-export activities have boosted more strongly than ever due to integrating with the international economy In the context of continuous development of import-export volume, international payment is an indispensable stage in buying and selling transactions among different companies from different nations To be specific, for import-export enterprises, international payment occupies an important position in each business cycle Payment activity directly affects the capital turnover, the entire reproduction process, investment as well as company's profit Thus, what international payment means to use and how to apply payment are tasks that businesses need to focus on To be able to manage and organize well international payment, managers must be able to analyze types of risks a business may encounter in the future such as: exchange risk, credit risk and interest rate risk, etc in order to take measures to limit and prevent Preventing financial risks in the import-export business in general and in international payment in particular is a principal task for all businesses Therefore, it is necessary to pay attention, research and analysis to provide optimal solutions for businesses in preventing risks in international payments By doing this, international payment will be

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