Project proposal group2 alibaba english centre

Dự án tốt nghiệp được thực hiện bởi nhóm sinh viên trường Đại học Hà Nội. Nội dung chính của bài viết này là tìm ra và lên phương án cải thiện cho doanh nghiệp, từ đó chúng tôi cũng đã ghi lại kết quả sau khi doanh nghiệp thực hiện những phương án đó của chúng tôi. Xin mời các bạn tham khảo

HANOI UNIVERSITY FACULTY OF MANAGEMENT AND TOURISM

-o0o -

EXPENSE MANAGEMENT AT ALIBABA ENGLISH CENTRE

Project Proposal

Mentor: Mrs Do Van Anh Members: Nguyen Thi Hong Van 1704010124

Dang Thi Khanh Linh 1804010056

_March 7th

, 2022_

Abstract

Through 7 years of operation (2015-2022), Alibaba English Center has achieved remarkable and rapid growth in the number of students over 40,000 One

of the top concerns of businesses is cost control Expense management is a critical

factor since it also drives the company’s performance, particularly in SMEs and in

periods of difficulty, specifically two years of Covid-19 Alibaba English Center is

a medium-sized company, so the center also exposes to common problems of weak

cost management For this reason, to support the company strengthen its brand, stay

competitive in the market, and maintain strong performance, cost management is

now a top priority for the center's management This project aims to improve the

cost management system at one of the famous English Centers in Vietnam, which

is Alibaba English Center Cost issues, the impact of costs on the organization's

goals will be shown in the project This project aims to assist the company in solving

cost-related issues, namely administrative costs, commission costs and salary costs

Data are collected from the company to identify the problem existing in cost

management system through interviews with managers and staff, direct

observations of the process, and review relevant documentation Despite the

difficulties of mutual trust between the team members and the CEO of Alibaba

company, we expect to develop certain convenient tools and procedures to assist the

management in controlling costs

Table of Contents

Abstract 2

1.Introduction 4

2.Company introduction 4

a Brief history 4

b, Vision and Mission 5

c, Organizational structure 5

3 Problem Statement 6

4 Literature review 7

4.1 Expense management in small and medium-sized businesses 7

4.2 Expense management for English-teaching centres in Vietnam 8

4.3 Recording expenses under VAS standard 9

4.4 Administrative expenses 9

4.5 Salary expense management 10

4.6 Commission expense management 12

5 Methodology 12

6 Work allocation 13

7 Timeline for the completion capstone project 14

8 Potential obstacles and feasibility 14

REFERENCES 17

1.Introduction

General and administrative expenses are expenses incurred in the process of organizing business activities that such enterprises have to spend to operate their business Enterprise administration costs are related to all activities of the enterprise, not separate for each specific activity At the same time, depending on how the business operates, the administrative costs also vary Consequently, what most directors are keen on is the means by which to deal with this expense in the most sensible manner for their business

Enterprise management is a job that requires administrators to understand the organizational structure and standardize the management process as well as optimize the cost of effective enterprise management to bring greater profits In order to maximize profits, each business must maximize revenue and minimize costs For many businesses, administrative expenses account for a small proportion One of the important keys to help businesses manage business costs effectively is to determine business management norms

This is the basis to help businesses make operating estimates because in order to make a labour cost estimate, there must be a norm of man hours, and the cost of raw materials must have

a norm of raw materials In addition, it also helps managers control business activities of the enterprise because normative costs are the standard, the basis for evaluation, and contribute to timely information for managers to make daily decisions such as pricing a product, accepting or rejecting an order, analyzing profitability More specifically, it attaches the responsibility of each employee to the economical use of resources

Good corporate cost management will help businesses operate effectively, optimize unnecessary costs, and control the finances of the business What problems exist in the cost management system of the enterprise? Which proposal is suitable for the current situation of the company? How to apply this plan in real situation?

2.Company introduction

a Brief history

Alibaba English - the company that we conduct research in is a limited liability company with its head quarter at 186 Giai Phong, Hanoi, founded by Mr Ngo Xuan Thang The company was established in August 2015 with a development path of nearly 7 years so far After 2 years of operation, up to 2017, Alibaba reached the top 100 typical young businesses in Vietnam Up to now, Alibaba has become the largest English centre in Hanoi with more than 40,000 students and

it is also a language centre that has the cheapest tuition fee in Hanoi After 6 years of establishment, the company has now expanded to 7 facilities with 4 facilities in Hanoi, 2 facilities in Nghe An and 1 facility in Saigon The focus that our team wants to study is on facilities in Hanoi The training system at the company includes pronunciation, grammar, communication and TOEIC In addition to training knowledge about industry transfer, the centre also integrates teaching students about critical thinking, creative thinking, presentation skills and teamwork, more specifically and

also the brightest point Alibaba's is a dynamic environment that is different from other English centres

b, Vision and Mission

Since the company's establishment, the company has brought with it the desire of the founder of the company to bring English into the universal language for Vietnamese people in the current economic context of economic integration and globalisation, with the mission of helping one million students to speak English as their mother tongue Moreover, Alibaba also has a mission

to build a strong English community and constantly strives to combine with leading partners in the field to create opportunities and a better future for Vietnamese people

c, Organizational structure

In order for the company to operate flexibly, the organizational structure plays a very important role Alibaba has a team of extremely young, dynamic and enthusiastic employees, the whole company up to now has about 150 employees The organizational structure of Alibaba one-member limited liability company, whose owner is also the director of the company, is in charge

of Mr Ngo Xuan Thang and is responsible for the debts and related property obligations of the company within its charter capital The company has 4 main departments including marketing department, recruitment department, training department and sales department

3 Problem Statement

Our team's target community will focus on the Alibaba English Center for all ages who want to learn with a focus on everyday communication as well as in-depth communication Alibaba English Center was established in 2015, after 7 years of operation, the center has 7 branches nationwide and more than 40,000 students With a system of training and teaching processes focusing on basic daily communication for all ages, Alibaba has affirmed its position in helping students practice listening and speaking English in real life However, when we went into the company's management system, we found that there was a gap due to weak cost management In particular, in the management of administrative costs, salary expenses, commission expenses, there are many weaknesses and loopholes that can lead to many serious consequences in improving the development of the company later After surveying and working with the company, we learned that there is no specific accounting department who will be responsible for recording all kinds of expenses and related documents And when recording all kinds of expenses will be due to Mr NCH, holds the position of lecturer vs cost control, after everyone uploads the data to a drive file for comparison Regarding salary, there will be an Excel file on Google Drive to control teaching activities as well as expenses after a lesson Moreover, when there are costs incurred, each employee is responsible for uploading to Google Drive the invoice or photo for comparison and payment to Mr NCH The Excel file would automatically calculate the amount of payables to workers in the formula:

Payables to Workers= Salary (based our their claims)+ Expenses paid by them in advance Once Mr NCH alone takes care of all the work related to the costs incurred, it will lead to many loopholes Furthermore, because there is no accounting department in Alibaba, Mrs LA, an employee of the sales department, are the trustful one to record the transactions in a journal based

on Drive file & based on Mr NCH’s checking at the end of the month However, Ms LA violated Circular 200 cost accounting principles because Mrs LA does not actively record expenses at the time of arising, but only records all expenses at the end of the month Due to the lack of strict cost management has led to the following consequences

The first issue, based on firsthand observation after working in this setting for a long time,

is administrative expenses for which there is no dedicated person or cost /asset management department In fact, lecturers/employees buy materials, print articles, parties and bonuses completely freely and upload expenses to Excel file, but this file is not paid too much attention Without a dedicated cash flow manager, photocopying, document printing, party money, bonuses, and fines are just a few examples, and without a warehouse manager, it's impossible to keep track

of vouchers, duplicate paperwork isn’t processed, and anyone can come and go from the warehouse This leads to shady, unsubstantiated expenses, which can lead to a lot of shady, fraudulent activity

The second cost concern is that payroll costs are quite complex In fact, lecturers and staff will automatically report the working day on an Excel file We found that Mr NCH was both a

teacher and a salary checker through his practical experience working at the company and looking through Alibaba's financial documents when asked by this group

Finally, according to company policies, you will be paid a commission if you recommend others to join the trial course About how to calculate the commission for each person, each employee has contributed to the company as cumulative points and the employee self-declares his contribution in the Excel file However, three incidents of employees generating bogus emails to register for a trial course were uncovered by December 2019, and those three employees were also

in charge of reviewing enrolled students As a result, I was able to deceive the number of students that signed up for a trial lesson in order to collect a commission The CEO has not yet discovered

a complete solution to the two challenges outlined above

This project will provide a way to solve the problems of cost management in the most appropriate way from our team's point of view This is the foundation for assisting firms in making operating estimates, as a labor estimate requires a norm of man-hours, and a norm of raw materials necessitates a norm of raw materials Furthermore, because standard expenses are the basis for evaluation, it assists managers in controlling business activities of the organisation by providing timely information for managers to make daily decisions, such as pricing a product, accepting or rejecting orders, and reviewing profitability More specifically, it ties each employee's accountability to the efficient use of resources It will positively affect the aspect of the community

in the long run A positive effect on the organisation is that it will help the company understand the costs of money coming in and out, easy to manage as well as reasonable allocation without wasting money Alibaba will be able to operate more efficiently, reduce superfluous expenses, and keep track of its finances with good corporate cost management

4 Literature review

4.1 Expense management in small and medium-sized businesses

In traditional accounting for costs, it is assumed that fixed costs are independent in the level

of activity and variable costs change proportionately according to the changes in the level of activity Costs should be divided into fixed and variable ones Most management accounting expects that the proportion between costs and activity refers that a 1% increase in activity results in a 1% increase in costs, and a 1% decrease in activity results in a 1% decrease in costs (Allen, 2007)

Cost management is a comprehensive index to measure the level of enterprise management Generally, firms with limited access to capital have higher internal costs including salary and rental expenses There are two categories in processing costs which are rational decision-making and motivational The rational decision-making treats expense as a consequence of weighting costs and economic benefits The other is motivation and stimulations, providing incentives to work, for example perksNotedly, in some companies, rewarding staff for firm performance improvement has now become a common practice However, because some of the expenses are variable, decision-making processes by management are put in several difficulties, which requires critical information (Rougnaghi, 2017)

Today, many firms manage their costs by utilising resources When current operation results are not good as expected, it is the manager's critical decision whether to maintain resources and keep the cost capacity in the short-term or immediately cut those The most common cost-related problem nowadays is that most information for expenses that managers receive are mainly from financial statements while a business can have various expense behaviours It was long believed that administrative, general and selling costs vary according to activity level However, recent experimental studies have revealed evidence that the reduction in costs may lead to lower quality in sales processing in the future (Anderson et al, 2019) Thus, in some cases, an increase

in costs can result positively in business activities To decide firm cost and whether to reduct expenses, it requires a long process of consideration and analysis before imposing those costs to firms

4.2 Expense management for English-teaching centres in Vietnam

Truong Manh, a Vietnamese strategic manager, pointed out a common model for English-teaching centres in Vietnam

In his opinion, English-teaching centres in Vietnam commonly has to to financial issues due to poor expense management The cashflow indeed reflect the optimization of business operations Expenses are divided in 3 categories: marketing & sales expenses, managing and controlling expenses and others However, in Vietnam, English-teaching centres mainly assign a

specific person, usually known as an accountant to control both revenue and expense situations, which is considered as the great lack of expenses management Hence, there is a great risk of monetary frauds The founder is suggested to proceed with a short-term step which is to review all the transactions in the latest 2 months and then highlight those that may have least effect on the business operation to judge and decide omitting those transactions in the future Moreover, expenses for human resources should be considered because efficiency and effectiveness require a thorough judgement, which comes to be the common weakness in most English-teaching centres Employees are overpaid than their potentials, leading to over- expenses (Truong Manh, 2021) 4.3 Recording expenses under VAS standard

Alibaba adopts the VAS standard There is no accounting apartment in the company All the transactions and reports are recorded and prepared by L.A- a trustful person having a degree in accounting and now working in the sales department At the end of each month, L.A would based

on salary and expenses claimed earlier in the mutual Excel files by all the staff and checking results conducted by NCH, a person being responsible both for teaching at the centre and reviewing expenses to record all the transactions incurred and then prepare reports

In fact, L.A actions violate TT 200- the VAS standards and accounting principles Under VAS, expenses are the accounts that decrease economic benefits and are recorded at the time of occurring transactions or possibility of the future without already being paid or not (VAS,n.d) Moreover, the matching principle, which requires revenues and any related expenses should be recorded together at the same time, is also violated In addition, it is expected that the account should review evidence and reasonability for transactions by him or herself before recording, not just by relying on the others’ opinions and judgement

4.4 Administrative expenses

Administrative expenses reflect directly on a company’s efficiency Research from the University of Texas shows that 82% of poor cash flow management leads to the failure of a small

or medium-sized business The manager should review all office management tools to track the costs better (Akerks, 2016) Business is an organisation comprising many individuals Thus, there

is a high risk of shortage in controlling administrative expenses, especially some variable costs like material printing, perks, and outside working expenses In an English centre, main costs come from studying material (Truong Manh, 2021) Some businesses have effective software and managing tools to control, but most neglect the importance of this matter, which leads to loss of the budget balance It is assumed that those expenses are the hardest to control, thus being the most-driven fraud (Styles et al, 2018) In Vietnam’s accounting system, administrative expenses (TK 642) are clearly classified into details including taxes, fixed assets’ depreciation, expenses incurred from conferences, research and training In Alibaba’s case, the cost spent for printing materials should

be accounted for TK 6427 (Vietnamese Accounting System)

4.5 Salary expense management

According to the internal auditing process for salary payables, Alibaba has now not fulfilled all auditing duties, especially the matter of lack of duty segregation There are 3 aspects that need to be reviewed periodically: incurring salaries expenses, calculating methods and recording in the company Internal control judgement helps businesses to identify possible misstatements and potential risk factors In terms of duty segregation, the managers or auditors should proceed with internal control to check the segregated responsibility between human resource department and accounting department In addition, internal auditors should check labour contracts, documents and company policies which authorise specific payroll and commissions to review recruiting procedure, payroll agreement and the independence in 3 different processes (reporting working hours, paying salaries and recording salary expenses) Moreover, payroll-related models in the company should be reviewed to prevent frauds and risks in payroll and duty completion confirmation and records These are the most important functions because of its direct and vast effects on salary expense management in the business (SCIC, n.d)

Today, with economic development, there is a need for towards-large-scale- companies for building a firm salary management system Salary management system has a more complete definition than the word “salary management “itself It is a combination of controlling human resources and business operation as well as analysing company policy-making model and database (Zhang et al, 2012)

Poor employee expense control can result in both employee dissatisfaction and higher cost processing Therefore, expense management has become a crucial corporate function nowadays

In a research project, Suresh proposed using software as an effective way to manage the employees’ detailed working days and working hours