Reason for choosing this topic
In today's rapidly advancing global economy, numerous enterprises are established each year, highlighting the critical need for effective financial management Internal financial statements are essential for company boards to make informed decisions, underscoring the importance of accounting in business operations Payable accountants play a vital role in this process, managing various financial obligations such as supplier debts, tax liabilities, employee salaries, and accruals Their work significantly impacts the cash flow of every company, making their position crucial for overall financial health and management.
As a production and commercial entity like PV Gas South, managing accounts payable is crucial to ensure timely and accurate financial records, thus avoiding tax penalties and supplier compensation The accounts payable accountant is responsible for meticulously tracking each invoice related to specific transactions and organizing them systematically Furthermore, this role is vital in prioritizing payments to prevent any penalties or compensations, while also advising management on cash flow control to ensure the smooth operation of the business.
In summary, because of the benefit and important that I could aware about the responsibles of payable accountant, I dicided to choose “ working process of a payable accountant “ as my internship topic.
Research objects
- To research the reality responsible of a payable accountant in every financial month at PV Gas south branch Dong Nai.
- After experienced all the neccessary tasks of this position at company, I will gather and issue some opinions and evaluations in this dissertation.
- By the way apply the learned knowledges in university and some reality experience at PV gas south, I maybe explore some feasible solutions to improve effeciency of accounting systems
This dissertation primarily focuses on the PV Gas South Company, specifically its Dong Nai branch It examines the payment processes, invoice support, booking methods, reporting documents, and other financial information related to PGS.
Research scope
Arising transaction in general and especially focusing on payable accounts relating to Trade payable ( 331 ) , Tax and other payable to the state ( 333 ), Payable to employees
This dissertation focuses on the financial transactions that occurred in the first quarter of 2018, specifically examining accrued expenses payable, other payables, and financial debt Due to my limited knowledge, a short internship period, and the confidentiality of the company, the scope of the analysis is restricted to these specific transactions.
Research methodologies
As I’ve had chance to spend more than 3 months in internship program at company, I have used not only simple but also complicate methods to complete this statement :
1 Reviewing methods : I spend a lot of internship time to read circulars and VAS once again before I try to thorough all the previous working files to do the same.
2 Directly interact : with company’s accountants, financial statement, accounting books, ledgers, invoices, banking documents… In the first days, I just focus on following up and question senior to receive guidance.
I have the privilege of directly booking and resolving transactions within our accounting software, which allows me to efficiently follow up on the invoice process This enables me to create a comprehensive payment summary file and manage our accounts payable effectively.
In addition to pursuing direct job opportunities, I dedicate significant time to researching methods by reading extensively online and reviewing past internship statements to enhance my knowledge and gain valuable experience.
Introduction of Petrovietnam southern gas joint-stock company – PV gas south
History and development process
+ Company’s name : Công ty cổ phần kinh doanh khí miền Nam
+ Company’s name ( in English ) : PETROVIETNAM SOUTHERN GAS JOINT-STOCK COMPANY
+ Abbreviation of company’s name : PV Gas South
+ Headquarter : 4 th floor, PetroVietNam Tower, number 1-5 Le Duan Street, Ben Nghe Ward, District 1, HCM city
+ Website : www.pgs.com.vn
+ Email : lienhe@pgs.com.vn / info@pgs.com.vn
+ Charter Capital : 500.000.000.000 Việt Nam đồng
+ IPO date : Nov 15 th , 2007 ( HNX )
PetroVietNam Southern Gas Joint-stock Company (PV Gas South) is a gas products trading enterprise that operates under the Gas Producing and Trading Company (PV Gas) It was established on March 28, 2000, through Decision No 389/QĐ-HĐQT by the Vietnam Oil and Gas Corporation.
On April 24 th 2006, VietNam Oil and Gas Corporation decided to established
PV Gas South Company was established under Decision No 825/QĐ-DKVN, building upon the foundation of the Gas Products Trading Enterprise, which is part of the Gas Producing and Trading Company (PV Gas) and the Oil Commercial Company (Petechim).
On June 30, 2006, the Dean of the Industrial Ministry signed Decision No 1696/QĐ-BCN, initiating the equitization process of PV Gas South Subsequently, on December 20, 2006, the Dean approved the equitization strategy through Decision No 3734/QĐ-BCN, officially transforming PV Gas South into a Joint-Stock company.
On July 23, 2007, the board of PGS conducted its inaugural shareholders meeting for the first fiscal year Following the approval and completion of all legal procedures, the PV Gas South Joint-stock Company officially commenced operations on July 25, 2007.
In compliance with the general meeting of shareholders' resolution, the board of directors has systematically followed regulations to list shares on the Hanoi Stock Exchange With the assistance of PetroVietnam Securities Company, the company has successfully completed the prospectus and necessary legal documents for the listing The official listing is set to take place on November 15th.
2007, this day is the first time the stock of company has listed officially on the
The Ha Noi Stock Exchange has listed PV Gas South JSC, known by its stock code PGS, which has successfully operated for over 16 years under the slogan "Safety – Quality – Effectiveness." Through significant efforts by its management, the company has established itself as one of the leading LPG trading firms in Vietnam.
PETROVIETNAM GAS has established itself as a leading and reputable supplier in the LPG market, which continues to expand throughout southern Vietnam According to recent statistics from the R&D department of PGS, the annual LPG sales volume reaches 250,000 tons, with 160,000 tons designated for civil use, accounting for 65% of the total LPG output.
In 2009, PV Gas became the pioneer in introducing a new natural product line, Compressed Natural Gas (CNG), to the market Within just seven years of operation, CNG production soared to over 100 million units annually, marking a significant achievement in the industry.
Chart 1.1 The diagram of PGS’s trading quatity of LPG and CNG (Petrovietnam n.d.)
Objectives and visions
PV Gas South aims to establish itself as a leading professional trading company for LPG, CNG, and LNG, not only dominating the Vietnamese market but also excelling in the Indochina region From 2015 to 2020, the company plans to increase its LPG trading volume to 300,000 tons annually, capturing 40% of the southern market, while targeting a CNG volume of 150,000 m³ per year, which would account for 60% of the southern CNG market Additionally, the company aims to achieve a profit after tax to chartered capital ratio (PE) exceeding 20% annually.
The company aims to enhance its operations by synchronizing construction, trading, and safety measures while optimizing the strengths of each branch and market area Emphasizing professional sales and the establishment of a robust distribution network, the company also seeks to promote the Petro Vietnam Gas brand in the Southern LPG retail market, targeting a brand awareness goal of 75% by 2020.
+ LPG trading : continue to strive to increase LPG production by 4-5% per year
CNG and LNG trading in Vietnam is experiencing significant growth, with a projected annual increase of over 7.2%, capturing more than 60% of the southern CNG market PV Gas South is dedicated to expanding its presence in the Indochina market while actively researching and developing strategies for the import and distribution of LNG in Vietnam.
The Vietnam oil and gas plant is committed to stable and safe operations, currently producing 350,000 barrels of LPG cylinders annually, with a target of 3% growth each year The company is also focused on researching and developing composite cylinders to launch in the market at the right time, aiming to boost exports.
Our services encompass professional design consultancy, equipment supply, and installation for LPG, CNG, and LNG systems We specialize in optimizing the operation of storage facilities, filling stations, and LPG cylinders to enhance efficiency and effectiveness in the energy sector.
1.2.2 Slogan of PV Gas south
PetroVietNam Southern Gas Joint Stock Company (PV Gas South) is a key member of the Vietnam Oil and Gas Corporation, playing a crucial role in gas distribution After years of overcoming challenges, PV Gas South has earned the trust of Vietnamese consumers and businesses across the nation, establishing itself as a prestigious and reliable brand known for safety and quality Today, PV Gas South stands as a leader in Vietnam's gas trading sector, supplying over 100 million m³ of compressed natural gas (CNG) annually and 250,000 tons of liquefied petroleum gas (LPG), embodying the slogan “PetroVietnam Gas – Energy of Valuable Life.”
LPG / year, revenue of 5.000 billions VND per year, payable for government nearly
100 billions per year, solving the employment problem for thousands of worker
In the near future, the board is committed to advancing the company through innovative and sustainable practices aimed at increasing market share in gas products while enhancing customer service quality The focus will be on ensuring the safety, quality, and efficiency of products to benefit society and promote a "green, clean, and pollution-free" environment PV Gas South values the contributions of its employees, recognizing that their dedication, responsibility, enthusiasm, perseverance, dignity, and creativity are vital to the strength of both the company and the "PETROVIETNAM GAS" brand.
Structure of PGS’s departments
PV Gas South Company has consistently enhanced its organizational structure throughout its development, prioritizing clear task assignments and responsibilities to optimize operational efficiency All decisions regarding the delegation of responsibilities for each role have been publicly approved by shareholder votes to ensure positive business outcomes.
Chart 1.2 The structure diagram of PV Gas South (Petrovietnam n.d.)
1.3.2 The duties of each department
The Organization and Administration department manages all internal administration activities and oversees human resources Its primary functions include addressing legal procedures and fulfilling government-related requirements, such as handling legal documents and ensuring legitimate employment practices.
Page | 11 permit, optimizing the internal infrastructure, prepare important contracts… (Petrovietnam n.d.)
The primary role of this department is to document all transactions occurring throughout the business period, monitor financial performance, and supply essential financial information to support the management team's decision-making processes.
At the end of each fiscal period, it is essential to compile financial statements while ensuring that all legitimate invoices are accounted for to prevent non-deductible expenses The chief accountant plays a crucial role in this process by delegating tasks, assessing efficiency, and taking full responsibility for the financial figures and ratios for the annual period.
This department is responsible for various tasks, including market research and development, cargo distribution, supply and value chain management, and annual financial strategy planning to ensure budget sustainability.
In addition to investment functions, this section will focus on machine operations within the production chain Technicians will perform inspections to assess the quality of each product line before market launch Furthermore, manufacturing decisions will be influenced by these evaluations, as they will rely on the trading results of the products to determine whether to continue or discontinue a specific product line.
This department is dedicated to safeguarding the plant from fire and other natural hazards while establishing a clean manufacturing system that adheres to safety production regulations set by authorities.
Accounting department
Chart 1.3 Chart of PV Gas South internal infrastructure (Petrovietnam n.d.)
Specific function and responsibility of each position :
Chief accountant : Undertake all the responsibilities relating to internal accounting system Evaluating and making the decision to choose and upgrade the suitable accounting methods to apply for company
This article focuses on evaluating a company's financial performance by analyzing its financial statements and estimating the annual Corporate Income Tax (CIT) and Personal Income Tax (PIT) It also proposes solutions and methods for addressing any unusual transactions encountered during this assessment.
Payroll accountant materials accountant Chief accountant
Page | 13 occur Controlling the saving invoice process and also keeping in confidential the accounting information of the company
A general accountant is responsible for accumulating invoices and maintaining accounting records They analyze transactions reflected in journals and trial balances to prepare financial statements and tax reports for the company Additionally, they monitor tax payables to ensure timely payments.
Revenue accountants are responsible for monitoring the financial status of a business as represented by revenue accounts (such as 511, 515, and 711) They accurately record this information in the journal and trial balance using accounting software, ensuring precise financial reporting and analysis.
A tax accountant is responsible for managing tax-related accounts, including payable taxes, deductible and non-deductible taxes, as well as input and output value-added tax (VAT) They ensure the legitimacy of VAT invoices for deductions and assist in preparing timely tax reports and payments to authorities.
Costing accountants are responsible for calculating various manufacturing expenses, including direct materials, direct labor, sales, and administration costs They manage all accounts related to production costs and ensure accurate bookkeeping.
An inventory accountant is responsible for managing materials and goods in storage, conducting monthly stocktakes, and handling receivable and payable invoices They also determine the necessity for importing or exporting items based on the needs of other departments Additionally, they play a crucial role in evaluating and ensuring the quality of inventory.
Page | 14 of products in storage to mark up the figures of inventory provision Saving the requirement invoices and recording all the relating transactions that arised during fiscal period
Payroll accountants are responsible for tracking employee working hours and calculating salaries, which encompass net pay, healthcare insurance, social insurance, unemployment insurance, union fees, and additional allowances They facilitate salary disbursements through banking services once approved by management Additionally, payroll accountants meticulously record all payroll-related transactions in dedicated accounting software.
Materials accountants play a crucial role in managing inventory by receiving material requirements from various departments and accurately estimating the necessary quantities They create comprehensive materials requirements documents for inventory accountants and assess the efficiency of material usage in manufacturing processes Additionally, materials accountants are responsible for recording all transactions related to the input and output of materials, ensuring that this information is accurately reflected in the trial balance within the accounting software.
1.4.2 Accounting standards and accounting regulations
Accounting system : Apply the accounting system of Viet Nam 200 circulars accounting standard
Booking method : Apply the method of Journal
PV Gas South adheres to the Vietnamese Accounting System, as established by the Ministry of Finance on December 22, 2014 This compliance includes following the relevant circulars that guide the implementation of accounting standards and regulations for the fiscal year.
Accounting period : Beginning on January 1 st and ending at December 31 st
Currency used in accounting system : Multi-currency including VND, USD…
Using documents at the company : invoice printed by company, payment request, goods list, stocks-take, commercial contract, receive voucher, payable voucher,…
Depreciation method : straight – forward method, the depreciation period is based on the time stipulated in Circular No 45/2013 / TT-BTC dated 25 April
2013 of the Ministry of Finance
Value added tax : deductible methods
Additional information : ASP is a kind of accounting software that support accountant in terms of booking transactions and issue the financial report at the end of each period
It was generated in the format of transactions relating to :
This software allows users to efficiently manage and record all transactions through its foundational functions Once the booking tasks are completed, users can easily export the data to Excel for financial reporting or leverage other built-in features Further details about these functions will be provided in an upcoming statement.
In conclusion, Chapter One provides a comprehensive overview of PV Gas South, including its history, development process, future strategies, internal structure, functions, and operational fields Subsequent chapters will delve into the accounting system of the PV Gas South branch in Dong Nai, offering a detailed, step-by-step analysis.
Theoretical basis of Account payable
Theoretical basis of Account payable
According to Vietnamese accounting standard ( VAS 01 ) item 18, we can be awared that :
Payable liabilities represent a business's current obligations stemming from past transactions that must be settled using its resources These liabilities are categorized into two types: short-term and long-term Short-term liabilities refer to payment obligations due within 12 months or less than a typical business cycle, including amounts owed to suppliers, internal payables, other short-term payables, and financial debts reported at the time of financial statements.
Long-term liabilities refer to an enterprise's total payment obligations that extend beyond 12 months or exceed the typical business cycle These obligations include amounts owed to suppliers, internal payables, various other long-term payables, and long-term financial debts as of the reporting date.
According to circular 133/2016/TT-BTC article 39, payable accounts must be followed specifically base on each payable object or each business contract It indicate :
1 Liabilities of an enterprise must be accounted for and sorted by according to payment schedule, creditor, currency and other factors required by the enterprise
2 Liabilities shall be classified into trade payables, intra-company payables and other payables according to following rules: a) Trade payables are those derived from purchase of goods, services or assets These include amounts payable when importing through the trustee (in the import trust transaction);
Intra-company payables refer to the amounts owed between parent and affiliated units, while other payables encompass non-commercial liabilities that are not associated with the trade of goods or services.
- Payables related to financial expense, such as: interests, dividends and profits, financial investment expenses;
- Payables paid by third parties; payables which the trustor receives from relevant entities to pay for import-export trust transactions;
- Non-commercial payables, such as: non-monetary borrowings, fines, compensation, assets in surplus pending resolution, social insurance, health insurance, unemployment insurance, or union funds, etc
3 When preparing a financial statement, the amounts payable shall be classified into long-term payables or short-term payables according to their remaining terms
4 Currencies, creditors of payables in foreign currencies shall be specified as follows:
- Liabilities (credit side of accounts payable) shall be converted into the accounting currency at the actual exchange rate applied at that time
An advance payment to a seller in foreign currency shall be recorded to Cr 331 at the recorded specific exchange rate applied at the time of advance payment
When settling a debt, a business can opt to use either the book weighted average exchange rate for each creditor or the actual exchange rate prevailing at the time of payment.
Advance payments to sellers recorded to Dr 331 shall apply the actual exchange rate at the time of advance payment
When an enterprise uses the actual exchange rate to record the debit side of accounts payable, it may also account for any exchange differences that arise during the period This recording can be done either at the time of the transaction or on a periodic basis, depending on the specific characteristics of the enterprise's operations.
Foreign currency payables must be re-evaluated at the time of financial statement preparation, using the closing average transfer rate set by the enterprise's regular bank.
Article 52 of this Circular outlines the average transfer rate and the procedures for managing exchange differences arising from the reassessment of foreign currency monetary payables.
2.1.3 The mission of payable accountant
Firstly, accountant must follow specifically each payable account Every transactions’s unit currency must be converted to VND
At the conclusion of the accounting period, the accounts payable accountant must analyze the terms of long-term liabilities and debts, along with the payment schedule, to identify the liabilities due for payment in the upcoming accounting period and beyond.
At the conclusion of the accounting period, payable accountants must reassess the ending balances of loans and both short-term and long-term debts denominated in foreign currency This evaluation should align with the average exchange rate in the foreign currency on the interbank market, as provided by the Vietnamese government's bank on the reporting date Any exchange rate adjustments resulting from this re-evaluation of short-term and long-term debts must be accurately reflected in the financial statements.
Accountants are required to track the discount and premium associated with various types of bonds They must evaluate the allocation of these discounts and premiums to accurately compute financial loan expenses, which can affect business production costs or be capitalized periodically.
In case of expired bond’s interest is paid according to each period, accountant must compute period interest to treat as business production costs and capitalize on incomplete asset’s value
2.1.4 The role of payable accountant
Payable accounting plays a crucial role in the overall accounting process of any enterprise A well-organized payable accounting system significantly enhances the company's ability to manage its financial situation effectively This function provides valuable insights for the board of directors, enabling them to assess financial performance accurately and develop feasible strategies for success.
Based on the results of payable accounting tasks, managers can gain a comprehensive understanding of their company's financial situation and cash flow A positive financial performance indicates that the company is not overly tied up in accounts receivable, allowing for manageable accounts payable by the payment due dates As a result, managers can implement effective strategies to optimize cash flow and ensure the financial health of the company.
2.1.5 Detailed principle of each payable accounts
The Vietnamese Ministry of Finance has issued Circular 200/TT-BTC and its amendment, Circular 133/TT-BTC, which outline the accounting rules, structure, content, and methods for each detailed account While I will base my dissertation on these current circulars, I will not directly quote them due to the brief requirements of this assignment However, it is important to note that the theoretical framework of my work is grounded in these circulars, and I will define each account in accordance with their guidelines.
Overview about the arising payable accounts of the company
Enterprises are required to maintain detailed records of their liabilities, ensuring that information is organized according to payment schedules, creditors, currency types, and other relevant factors as stipulated by Circular 200/TT-BTC.
Liabilities are categorized into trade payables, intra-company payables, and other payables based on specific criteria Trade payables consist of commercial amounts owed for the purchase of goods, services, or assets from independent sellers, including transactions between parent companies and their subsidiaries, joint ventures, or associates This category also encompasses amounts payable in import transactions through a trustee Conversely, other payables refer to non-commercial amounts owed or those related to trading in goods or services.
- Payables relating to financial expenses, such as: interests payable, dividends payable and profits payable, financial investment expenses payable;
- Payables paid by another party; payables which the trustor receives from relevant entities to pay for import-export trust transactions;
- Non-commercial payables, such as: borrowings payable, fines payable, compensation payable, assets in surplus awaiting resolution, payables related to social insurance, health insurance, unemployment insurance, or union funds, etc
If it is evident that there is an unavoidable loss, an amount payable shall be recorded according to cautious rules
When preparing financial statements, it is essential to account for amounts payable that meet the definition of accounts derived from foreign currencies, specifically referencing account 413 for exchange rate differences, which must be re-evaluated at the end of the accounting period.
At PGS – Dong Nai branch, like other companies, the majority of transactions involve accounts payable The accounts payable accountant is responsible for managing all payments due within the month, ensuring accurate bookkeeping based on legitimate supporting documents As a manufacturing company, PGS primarily deals with short-term and long-term payables, including taxes owed to the State budget, labor payables, accruals, and financial debts.
In specific, to clarify the payable accounts, we normally base on :
1 Trade payable : this account is used to record payment liabilities of an enterprise to the vendor of materials, goods or other services relating to manufacturing and operating activitties under concluded business contract or legitimate input invoice.
2 Taxes and other payables to the state : this kind of account will be used to record the transactions relating to taxes such as VAT, PIT, CIT, SCT, export duty or etc
3 Payable to employees : This is used for the transaction which its attributable is related to humans that working to deserve company's operation.
4 Accrual account : the expenses which were occurred but have not paid yet or we still did not collect the legitimate invoice would be treated as this account.
During my internship at the PGS – DN branch, I did not encounter accounts related to bond issuance, payable provisions, or CIT postponements; therefore, I chose not to include them in this dissertation.
The responsibilities of the payable accountant at the PGS – DN branch are closely linked to other accounting roles, highlighting the necessity for collaboration and support from colleagues in order to effectively fulfill their duties.
The accounting process of payable accounts
Describe the book-keeping process of a payable accountant
At PGS – Dong Nai branch, transactions primarily involve accounts payable, similar to other companies Each month, the accounting department receives VAT invoices and fee notes from suppliers Upon receipt, the payable accountant organizes these documents accordingly Simultaneously, payroll accountants submit their prepared payroll files, which have been approved by the chief accountant.
Based on the collected supporting documents, all payable accounts for the specified period will be filtered to create a payment summary The payable accountant will then submit this summary to the chief accountant for review and approval.
Once the payment summary is approved, the payable accountant initiates the payment order through the bank's website using a bank token to access the company's account After executing all orders, they are responsible for exporting the bank statement, which is then used to update the relevant accounting records Additionally, any VAT invoices from previous periods will be utilized to reverse VAT from the accounts receivable Special transactions may arise that require specific techniques for resolution, as determined by the chief accountant The bookkeeping process for payable accounts is summarized in the chart below.
Chart 4.1 The brief process of payable accounting ( sum up by author )
Account of supplier’s payable
Every other month, the accounts payable accountant receives debit notes directly from suppliers After verifying the legality of each signature on the debit notes, the accountant reconciles the payable amounts listed with those recorded in the accounting books While some accounts may be noted in USD, they are converted to VND and the exchange rate is re-evaluated at the end of the accounting period.
For this account, in ordinary, all the arising transactions that would be booked in accounting book need to be legitimate and compatible with the company’s regulations
It is no exception in PV Gas south Consequently, to book the transaction in accounting book and make payment everymonth, the payable accountant must depend on :
1 Value Added Tax input invoice ( VAT input inv )
2 Fee note or Debit note
Breakdown of each arising account Ledger of 331,
To align with the Vietnamese Accounting System, the internal accounting framework utilizes account 331 for all payable transactions To enhance tracking, this account is subdivided into individual vendor accounts, often distinguished by unique codes or labels such as HCM, VT, DN, and BD, indicating the supplier's location In addition to transactions involving debit notes, account 331 also addresses other payable occurrences, such as clearing accrued accounts from the previous month upon receipt of invoices this month, and managing payments made this month that lack VAT invoices.
Chart 4.2 Performance format of 331account’s ledger
In terms of booking the arising payable account, PGS have wide range of diversity transactions such as:
On November 17, 2017, PGS incurred an expense of 281,552,645 VND for loading LPG goods onto a ship, which was payable to M&C Company Subsequently, on November 25, 2017, the service supplier issued a VAT invoice and debit note requesting payment from PGS Based on the working statement provided by warehouse staff and accompanying documents, the payable account will process the payment through the VCB bank account.
+ Base on received VAT invoice :
Cr 33101M&C : 309,674,911 + Base on the payment request :
On December 8, 2017, M&C issued an adjusting VAT invoice due to a loading cost deficiency from November, requesting an additional payment of 3,628,514 VND Following the completion of the working statement and the adjustment, the payable accountant will record this amount as an expense, thereby increasing the December expenses.
+ Base on the adjusted invoice ( vendor will make the KHBS invoice by themselves ) :
Cr 33101M&C : 3,991,365 + Base on the payment request :
On December 15, 2017, PGS recorded a VAT input invoice valued at 57,685,000 VND from LDT Co Ltd for inspection fees incurred in October At that time, only a debit note was available To ensure compliance with Vietnamese Accounting Standards (VAS), the payable accountant appropriately recorded the expense in the correct accounting period.
In October, we aimed to reduce expenses by booking 30, but utilized account 335 for reciprocal transactions As a result, in December, the payable accountant will settle the accrual account using account 331.
+ In October : ( as following the minutes of official acceptance )
Cr 112102 : 63,453,500 Reverse VAT at the same time : ( base on the received VAT input invoice )
On December 25, 2017, PGS issued a sales invoice for office rental expenses amounting to 87,172,400 VND for Mrs Võ Thi Kim Lang, covering December 2017 and January 2018 Following established bookkeeping practices, the payable accountant will record this transaction accordingly.
On December 18, 2017, PGS received a VAT input invoice for an air ticket purchased for Mr Tran Van Nghia's overseas business travel, totaling 13,354,250 VND According to Vietnamese tax regulations, this expense is subject to a 0% value-added tax rate, prompting the payable accountant to record it accordingly.
On November 17, 2017, PGS engaged in a transaction to purchase a tire for lifting cars from OLD at a cost of 1,325 USD, using an exchange rate of 22,770 VND/USD The payment was completed on December 25, 2017, with an exchange rate of 22,430 VND/USD This equipment is exempt from import tax and VAT, allowing the accountant to record it accordingly.
4.3 Detail booking entry for this transaction ( ledger 331 of PGS DN )
Account of Tax and other payables to the state accounts
This account is used to record relation between enterprises and State about taxes, fees, charges and other payables, payment and outstanding payables to State budget in the fiscal year
The enterprise must diligently assess and calculate all taxes, fees, and charges owed to the State in accordance with legal requirements, ensuring that all payable taxes, paid taxes, deductible taxes, and tax refunds are accurately recorded in the accounting books.
Indirect taxes, such as VAT (utilizing the credit-invoice or subtraction method), special excise tax, export duty, and environmental protection tax, are essentially collected on behalf of a third party As a result, these taxes are excluded from the revenue figures presented in financial statements and other reports.
Account 333 may exhibit a debit balance, which indicates that tax payments and other expenditures exceed the amounts owed to the State This debit balance could also represent taxes that have been paid but are eligible for exemption, deduction, or refund, with the refund process still pending.
For each sub-account of 333, various supporting documents are necessary to accurately record transactions In the accounting system of PGS Branch Đồng Nai, the output VAT payable is documented in the accounting books based on the values shown on VAT output invoices Additionally, when the company imports goods or materials from overseas, the accountant refers to customs declarations and other relevant documents to track the imported payable tax However, it is important to note that the VAT on imported goods is recorded separately.
At PV Gas South, the payroll accountant prepares the payroll file, which the payable accountant uses to record the Personal Income Tax (PIT) and other labor-related payables in account 338 Following this, the accountant processes the net salary payments for employees Additionally, every quarter, the payable accountant is responsible for preparing Corporate Income Tax (CIT) files that detail deductible and non-deductible expenses This process involves offsetting deductible expenses against revenue to estimate the CIT payable for the quarter The values recorded in account 3334 are derived from the CIT declaration submitted to the tax authorities.
PGS adheres to Circular 200, which aligns with the company's accounting policy, allowing for the use of account 333 that consists of nine sub-accounts Each sub-account serves a specific function within PGS, contributing to the overall financial management and reporting processes.
Account 3331 – VAT payable: This sub-account is used to record output VAT,
VAT payable of import goods, deductible VAT, paid VAT and outstanding VAT payable to government budget
Especially, this also comprises 2 sub-accounts :
Account 33311 is used to track output VAT, including the total output VAT, deductible output VAT, VAT on sales returns or rebates, VAT payable, paid VAT, and any outstanding VAT payable for products, goods, or services provided during a specific period.
+ Account 33312 – VAT on imported goods: To record the amounts of payable, paid amounts and outstanding amounts payable of VAT on imported goods to government budget
Account 3332 – Special excise tax: To reflect the amounts of payable, paid amounts and outstanding amounts payable of special excise tax to government budget
Account 3333 – Export-import duty: To reflect the amounts payable, paid amounts and outstanding amounts payable of export-import duty to government budget
Account 3334 – Enterprise income tax: To record amounts payable, paid amounts and outstanding amounts payable of enterprise income tax to government budget
Account 3335 – Personal income tax: To reflect amounts payable, paid amounts and outstanding amounts payable of personal income tax to government budget
Account 3336 – Natural resource tax: To record the amounts payable, paid amounts and outstanding amounts payable of natural resource tax government budget
Account 33381: Environmental protection tax: Recording amounts payable, paid amounts and outstanding amounts payable of environmental protection tax
Account 3339 – Licensing tax : Record the tax payable for operating permit every year
But in accordance with circular 200, PGS branch Đồng Nai just have transactions relating to 3331, 3335, 3339 accounts The others also arise but it just be record by PGS in consolidate statement
On December 31, 2017, the PGS branch in Đồng Nai issued VAT output invoice number 0002628 for the export of CNG to the Gas Engine at Mỹ Xuân station, amounting to 10,438.199 mmBTU (equivalent to 266,157 Sm3) The total value of the invoice, including VAT, is 1,409,635,978 VNĐ, which the accountant will record accordingly.
On December 31, 2017, the payable accountant at PGS Đồng Nai branch will record the estimated Personal Income Tax (PIT) based on the December payroll file.
4.4 The total of PIT that was presented on Payroll file
For Transaction 3, the Đồng Nai branch incurs an annual licensing tax of 1,000,000, which is settled by the end of January 2017 In accounting terms, this transaction is recorded by the payable accountant.
4.5 The detail of booking entry record lisencing tax
Payable account for labour
Each month, the payroll accountant is responsible for calculating the salaries of all staff in accordance with company regulations regarding salaries, allowances, and bonuses Once the payroll file is finalized and approved by the branch director and chief accountant, it is sent to the accounts payable accountant Based on this payroll file, the accounts payable accountant issues banking orders using a bank token and exports the bank statement after the transactions are completed, which is then used for recording in the accounting books.
The accounts payable accountant typically relies on the monthly payroll file provided by the payroll accountant to process labor payments However, accurately calculating employee salaries each month requires the payroll accountant to reference various supporting documents.
Page | 38 working contract, timekeeping statement, assignment letter, previous payslip or other updated official notification…
Accountants typically categorize monthly salaries, allowances, and bonuses under account 3341, assigning each employee a unique department code for easier tracking of working hours and related items Additionally, employees are responsible for paying various taxes on their income, including social insurance, health insurance, unemployment insurance, trade union fees, and personal income tax, which are recorded under accounts 3383, 3384, 3385, and 3386 Furthermore, companies may adopt different methods for recording salary expenses, often consolidating all payroll-related accounts under account 641.
642 but others maybe treat as 632* depend on their operating form In PGS, accountant will depend on the code center of each staff to record their salary expense
In specifically, base on the Vietnamese accounting system and the regulations of PGS, the accountant will treat :
+ 334151 : payable account for lunch expense
4.6 A part of trial balance where reflect the balance of 334* account
Depend on the approved payroll file which was sent by payroll accountant, payable accountant will be in charge of two duties :
+ The first one is to make banking payment and export the bakstatement
+ The second one is to record all the relating account into accounting book
On December 31, 2017, the payable accountant will process payments and record all related transactions in the accounting books for employee Hoàng Xuân Lãm, based on the approved payroll file provided by the payroll accountant.
Accruals
The accrued account (335) is utilized to record transactions that occur within an accounting period for which payment has not yet been made, and for which no VAT invoice or necessary documentation exists Concurrently, accountants will increase production expenses as a corresponding entry to account 335 This treatment also applies to transactions related to interest on debts or bonds, which are accrued and settled in the following period Monthly expenses, such as car rentals or courier fees, are recorded as accruals under account 335 and are cleared in the subsequent month upon receipt of the vendor's invoice It is essential that the accrued amounts accurately reflect the actual expenses incurred during the period, with any discrepancies being refunded as necessary (Thông tư 200/2014/TT-BTC 2014).
+ The reality arised payable that had been cleared by using 331
+ If the value of reality expenses smaller than its accrual in the previous period, this difference will be clear by reverse entry to decrease expense
+ The estimate value or the value that was presented on debit note will be record as producing and trading expense
At the conclusion of the accounting period, a credit balance in accrued accounts indicates that the anticipated expenses have not yet materialized, despite being recorded.
Accrual accounting typically occurs when a transaction lacks a VAT invoice, necessary documentation, or payment In such cases, expenses may be accrued based on supporting documents like debit notes, fee notes, or rental contracts.
4.8 An example of Debit Note ( Fee Note )
Because of the fact that company’s accounting system depend on the circular 200 of Financial Ministry, so the account of accruals is just recorded as 335000 and doesn’t have level
In practice, a variety of transactions pertain to accrual accounts; however, in the context of PGS, the focus is primarily on common accrued expenses such as rental costs, expenses incurred without invoices or payments, and bond interest To illustrate these concepts more clearly, we can examine specific examples.
On December 5, 2017, VNPT issued a debit note detailing the office phone expenses for December, amounting to 944,334 (excluding VAT) However, the VAT invoice was not received until the following month To ensure accurate financial reporting, the payable accountant recorded the expense and increased the accrual accordingly.
Cr 335000 : 1,043,767 For the ending balance of 138800, it will be clear ( by offset with 133100 ) on the next month or whenever the vendor VNPT issue the VAT invoice for PGS
Transaction 2 : On the January 03 rd 2017, PGS signed in a contract with ANH KHA VN to rent a car for engineering dept at value 24,000,000.
In accordance with the contractual regulations, the payable accountant will record the accrual for the upcoming month's rental fee while processing the payment for the current month Additionally, as stipulated in the agreement between PGS and ANH KHA, any additional expenses incurred each month will be classified as expenses For instance, the total expense listed in ANH KHA's November invoice for car rental amounted to 30,833,000, and consequently, in December 2017, the payable accountant will execute the necessary entries.
+ Base on the input VAT invoice
On December 31, 2017, an expense transaction related to the loading and unloading of LPG for December arose, despite the invoice not being received during that month To ensure accurate financial reporting for the period, the payable accountant will record this transaction accordingly.
Account of other payable
This account is designed to represent the payment status of accounts payable that are not included in the other 33 accounts Typically, it is used to track advance receipts from clients and any discrepancies arising from financial or operating lease sales.
In summary, the main transactions of this account arise in PGS include :
- The value of excess assets has not yet been clearly identify, pending to authorities’ decision
- The accrued and paid for social insurance ( SI ) , health insurance ( HI ), unemploy insurance ( UI ) or trade union fee
- Payable profits and dividends to owners
Amounts received by an entrusted party from the entrusting party for the purpose of covering import and export taxes, VAT on imported goods, and payments to the entrusting party are classified as receivables on behalf of a third party.
Ten_Nhom: 33101 - Phải trả cho người bán – VND
Ghi nhận chi phí x p dỡ hàng LPG tháng 12/2017 3354 236,297,223
In various accounting periods, businesses often record advance receipts from customers related to asset leases, advance interest received from loans, purchases of debt instruments, and unrealized revenue and income.
- Trade union fee overpayment is compensated
At the end of the accounting period, if the ending balance exist in the Debit side of
338, it means the paid value is more than the reality payable or the amount of social security paid to employees has not been paid
As following the regulations and guidance on Circular 200, the account of 338 have 8 accounts of level two as the same as circular’s guidance :
- 3381 : The excess assets which pending to the authorities’s decision
- 3382 : Trade uinion fee that reflect the arisen accrual and payment in period
- 3383 : Social insurance that reflect the arisen accrual and payment in period
- 3384 : Health insurance that reflect the arisen accrual and payment in period
- 33888 : Other payable and receivable on behalf
The booking process at the PGS branch in Đồng Nai relies on PGS, leading to all related expenses during the period being classified as selling expenses (6418) Consequently, this results in a corresponding increase in the balance of account 33888.
There are some special transactions that occur regularly in PGS :
Transaction 1 : On the day of 27 th December 2017, the fixed asset accountant figured out the excess assets that value 35,000,000 VND at that time and report
Page | 48 to the chief accountant to the next decision So during the pending time, payable accountant will treat this as :
Transaction 2 : On the day of 28 th December, as follow the information that were presented on the file of December payroll, payable accountant will record payable for labours as :
( take Bùi Quy t Thắng as an example )
4.10 Bui Quyet Thang’s payable relating to his income
Transaction 3 : On the day of December 31th 2017, according to document
PK02-12-166 ( invoice 6257 ), branch Đong Nai has an expense of purchasing Fuel cost 4,093,201VNĐ for Tan Kien CNG station For this transaction, accountant will record as :
Loan and finance lease liabilities
A company's loan and financial debt account reflects its liabilities from loans and financial leases, along with the status of their repayments This includes loans obtained through the issuance of bonds or preference shares, which come with specific provisions mandating the issuer to fulfill certain obligations.
Enterprises must closely monitor their payable terms and finance lease liabilities, ensuring that any repurchase agreements set for a future date are not recorded in their accounts Loans and finance lease liabilities with a repayment period exceeding 12 months from the financial statement date should be classified as long-term, while those due within the next 12 months must be categorized as short-term Proper classification is essential for accurate financial reporting.
For the financial lease liabilities, total liabilities recorded in the Credit side of Account
341 shall be the total payable amount calculated on the present value of minimum lease payments or the fair value of leased assets (Thông tư 200/2014/TT-BTC 2014)
In the accounting system at PGS, accounts are initially recorded as 341 based on the loan contract Upon receiving a payment request, the payable accountant processes the payment and records the transaction to clear the corresponding balance of 341 If the contract value is denominated in a different currency, it is re-evaluated at the end of the period, using account 635 for losses and account 515 for gains This approach ensures that all transactions are accurately reflected in the accounting records.
In conclusion, this chapter provides a brief overview of the transactions occurring at the PGS Dong Nai branch As discussed, the branch primarily engages in common transactions within the scope of its internal staff's permissions Despite the simplicity of these transactions, I have compiled all relevant insights in this chapter Moving forward, the next chapter will focus on exploring the potential specialized knowledge that may arise within the company.
Comments and proposals
Overview
Because of the fact that PGS branch Đồng Nai is operating in form of dependent accounting branch, they still remains the strict regulations of Vietnam accounting standard
They apply the method of regular declaration, original documents serving for booking entry in accordance with VAS
The implementation of non-concurrent duties ensures that responsibilities among accountants are clearly separated, preventing any individual from exploiting their position for fraudulent activities.
Advantages
The Dong Nai branch of PGS, while a government entity, has implemented an accounting system that is sensible, clear, and easy to manage This system is designed to integrate effectively with supportive software and tools, enhancing overall work efficiency.
The payment process is systematic and requires meticulous attention to detail, with each department closely monitoring expenses The chief accountant plays a vital role in maintaining the integrity of the branch's accounting system, ensuring that all supporting documents are complete and accurate Implementing booking entries that align with the branch's business characteristics facilitates effective tracking of payables This approach allows accountants to manage payments efficiently, ensuring timely payments to suppliers while maintaining control over financial obligations.
Timely payment of obligations to the state is essential It is important to take reasonable measures when faced with long-term customer debt situations, as these can increase the risk of capital occupation.
Each month, the chief accountant prepares a management report that enables the branch manager and the PV Gas South board of directors to effectively monitor financial performance, facilitate strategic planning, and manage business funds for PGS Corporation, with a specific focus on the Đồng Nai branch.
The accounting of branch liabilities adheres to strict procedures, emphasizing the documentation of transactions Due to the branch's operational structure, the classification and assessment of expenses are limited, with most costs categorized as selling expenses This streamlined approach enhances the efficiency of cost accounting.
Relevent accounting information about payable for vendor is always sufficiently and timely record when data is needed to support management and issuing decision
The accounting team at PGS possesses extensive experience and in-depth knowledge of the branch's business operations They are well-versed in relevant circulars and accounting standards, with oversight and review conducted by the chief accountant.
Disadvantageous and Proposals
Beside the advantages side as I listed above, accounting system also contain some defectiveness :
The bookkeeping process, while meticulous, is often complex and time-consuming To initiate a payment order, approvals and signatures are required from the branch director, head of department, and chief accountant This limited authority for the payable accountant contributes to a predominantly manual accounting process, resulting in inefficiencies Additionally, in urgent situations where company authorities are unavailable due to business travel, delays in processing payment orders can lead to fines or negative evaluations, especially for payments to the state or significant partners.
To address this issue, I recommend that the branch implement QuickBooks Online accounting software This platform allows authorized users to easily log in and review approvals from any location, enhancing efficiency With QuickBooks' user-friendly features, both the chief accountant and the director can swiftly manage urgent situations and approve payments through online banking.
Despite operating on a small scale, the branch's transactions primarily involve the installation, transportation, and supply of cylinders However, recording and monitoring these transactions using Excel can be time-consuming and poses a significant risk of inaccurately booking essential information.
To address the current challenges and reduce accounting department costs, the board should implement QuickBooks software to enhance the efficiency of the accounting system Additionally, to boost the skills of the accounting staff, the branch should register for a Thuvienphapluat account to stay updated on revised circulars and changes to accounting standards.
Knowledge expandations
This chapter presents a case study on expatriates working for PGS in Vietnam Although PGS is a subsidiary of the Vietnamese government, it is also partially owned by a Russian oil company, referred to as "Company A," which collaborates with PV Gas South This analysis focuses on the interactions and transactions among these three entities: PGS Vietnam, the Vietnamese government, and Company A, highlighting the complexities of expatriate employment in this unique corporate structure.
This article examines the hypo-tax method used to calculate personal income tax (PIT) for expatriates working in Vietnam, specifically focusing on its application by a Russian oil company Additionally, it discusses the process of offsetting accounts related to other receivables and payables, particularly concerning payments made on behalf of expatriates.
The Hypothetical Tax method is utilized to calculate the tax withholding from expatriates' wages by their employers Multinational companies implement this approach to manage the increased tax obligations faced by employees in both their home and host countries, ensuring that labor does not pay more or less in taxes than they would if they had not relocated The hypo tax represents the actual amount withheld by the employer to align with these tax considerations.
Firstly, base on the assignment letter between expatriates and company A that let them go to work in Vietnam, we can clarify these problems :
1 In the items of remuneration, we can determine the exact monthly gross salary, foreign service indemnity, other allowances, bonus… So we can pick the figures to calculate the PIT liabilities for expatriates
2 In the item of accommodation, we can determine that PGS will apply the estimated method for house leasing expense
3 Compulsory insurances item show that these arised liabilities will be the personal responsible of expatriate
4 Personal income tax regulation indicate that PGS will pay PIT for expatriate on behalf of company A PGS will implement tax equalization scheme, withholds hypothetical tax before paying their monthly income In case there is additional withholding PIT from actual PIT payable in Vietnam, this PIT is considered as a benefit of expatriates and will be record as PGS expense
We can utilize the hypo-tax in accordance with the directives from the Vietnamese Ministry of Finance (No 12495/BTC-TCT) and refer to Circular 111/2013/TT-BTC for calculations.
1 In terms of hypothetical PIT :
When an employer implements a tax equalization scheme that includes a hypothetical tax deduction before disbursing income to employees, they are responsible for paying the personal income tax (PIT) on behalf of the employees The taxable income is calculated based on the income received, excluding the deductible hypothetical tax, in accordance with the specified guidelines.
4, article 7 of circular no.111/2013/TT-BTC dated August 15, 2013
In Vietnam, after calculating the actual tax paid, employers will implement tax equalization for payment Any additional tax deductions or refunds from the hypothetical tax deducted will affect the employer's income at the time of receiving the difference This adjustment will either increase or decrease the income, excluding the hypothetical tax, to accurately determine the income subject to Personal Income Tax (PIT) liability.
2 In terms of hypothetical house-leasing expense :
If an employer utilizes a hypothetical house-leasing remuneration scheme, where the hypothetical rent is deducted from the employee's income before payment, the income considered for taxable conversion excludes any deductible home remuneration The calculation of house rent as income for this conversion must not exceed 15% of the total taxable income, excluding both actual rent and hypothetical rent fees This method follows the guidelines outlined in item 4, article 7 of circular no 111/2013/TT-BTC issued by the Ministry of Finance on August 15, 2013.
When an employer in Vietnam deducts hypo-PIT tax and hypothetical house rent fees while paying housing expenses, expatriates' personal income tax (PIT) is affected The taxable income for expats is calculated by excluding the deducted hypo-tax and hypo-rent fees from their overall income.
The determination of house rent as income for calculating actual taxable income should not exceed 15% of the total taxable income, excluding actual rent and hypothetical rent fees This calculation method follows the guidelines outlined in item 4, article 7 of Circular No 111/2013/TT-BTC, issued by the Ministry of Finance on August 15, 2013.
The formula to determine income as basis for conversion :
Income use as basis of conversion
Payment on behalf by employer
Actual income are monthly salary, monthly allowance of employee
Payment on behalf by employer are the benefits comes by cash or non-cash which was paid to employee by company as guided point đ, item 2, article 2 of this circular
Deductions include : family deductions, deduction of premiums, voluntary retirement funds, deduction of charitable, humanitarian or study promotion contributions under the guidance in article 9 of this circular
4.4.2 Reality example of hypothetical tax
Next, I would like to present a reality case study relating to the case of employer simultaneously the deduction of hypo-PIT tax, hypotheticated house rent fee and pay
Page | 57 the house rent expense that I have met since the time I worked intern at PV gas south Dong Nai branch
To take an example about the PIT computation file of Mr Justin in quarter I / 2018 :
The gross salary, foreign services indemnity, and actual housing allowance will be derived from the assignment letter Based on these income figures, the payroll accountant will calculate a hypothetical tax amounting to 2,740 Euros (approximately 28,134.89 Euros or 77,089,598.6 VND) each month.
According to the assignment letter, Mr Justin has been designated as the foreign worker who will be employed in Vietnam for an extended period.
183 days so he has to incur the progressive income tax Thus, he also has personal deduction as 9,000,000 VND and Social security contributions ( SSC )
Payroll accountants track total income, including overtime bonuses and allowances, to determine the income subject to grossing up, excluding housing This process enables them to calculate both grossed-up income and gross income for taxable housing, after accounting for personal deductions and Social Security contributions.
According to the house leasing contract, Mr Justin's monthly rental fee amounts to 43,215,500 VND; however, the taxable housing value is only 32,024,487 VND, which is calculated as 15% of the gross income in accordance with the VAS tax system.
+ Consequently, the income subject to grossing up will be add taxable housing and leading to the changes in Total assessable income and Total taxable income