BANKING ACADEMY OF VIETNAM FACULTY OF ACCOUNTING GRADUATION THESIS TOPIC: TRADE RECEIVABLES AND TRADE PAYABLES ACCOUNTING AND SOLVENCY ASSESSMENT AT THE HANOI BRANCH OF KKDAY VIETNAM COMPANY LIMITED Student : Nguyen Hoang Tram Anh Class : K24CLCKTA Student ID : 24A4023145 Instructor : Dr. Dang Thi Bich Ngoc Hanoi, April 2025 i STATUTORY OF DECLARATION I hereby declare that this thesis is my own work and effort and that it has not been submitted anywhere for any award. Where other sources of information have been used, they have been acknowledged. The data and results described in the thesis are derived from the actual situation of the practice company.
Hanoi, April 2025 Student Nguyen Hoang Tram Anh ii ACKNOWLEDGEMENT I am very grateful to Dr. Dang Thi Bich Ngoc’s dedicated guidance, which has helped me so much in completing this thesis. I sincerely thank all of the lecturers of the Banking Academy of Vietnam for teaching me valuable knowledge during my years of study at the university. The knowledge I have gained serves as a steady foundation when I doing the thesis, and it also a valuable treasure that will accompany me when I entered the labour market.
I am also grateful to all of the accounting department staff at KKday Vietnam Co. for their support and facilitation during my internship. Their assistance, along with insightful information on the company’s accounting operations, has been vital in the successful completion of this thesis. They have taught me a lot of knowledge and helped me do the practical work of an accountant, helping me apply my knowledge in practice.
I sincerely appreciate everyone's support and assistance! iii TABLE OF CONTENTS STATUTORY OF DECLARATION.ii TABLE OF CONTENTS. iii LIST OF FIGURES.vi LIST OF TABLES.13 THEORETICAL FOUNDATION OF TRADE RECEIVABLES AND TRADE PAYABLES ACCOUNTING AND ASSESSMENT OF A COMPANY’S SOLVENCY.1 Some basic concepts of trade receivables accounting.1 Concept of trade receivables.2 Concept of trade payables.3 Payment relationships and methods.4 Roles of trade receivables and trade payables accounting.2 Accounting for trade receivables and trade payables of enterprises.1 Trade receivables accounting.2 Trade payables accounting.3 Analyze the trade receivables and trade payables situation and evaluate the solvency of the business.1 The role of trade receivables and trade payables analysis and solvency assessment.2 Analyze the trade receivables and trade payables situation of the business. Assessing the company's solvency. 33 iv CHAPTER II.38 CURRENT SITUATION OF TRADE RECEIVABLES AND PAYABLES ACCOUNTING AND SOLVENCY ASSESSMENT AT HANOI BRANCH OF KKDAY VIETNAM CO.1 Overview of KKday Vietnam Co., Ltd Branch in Hanoi .2 Formation and development process of Hanoi branch of KKday Vietnam Co.3 Company functions and missions of Hanoi branch of KKday Vietnam Co.4 Overview of KKday Vietnam Branch in Hanoi.2 Current practices in trade receivables and trade payables accounting at Hanoi branch of KKday Vietnam Co.1 Product characteristics, sales method, payment method.2 Organize trade receivables and trade payables at the company.3 Content of Accounting for trade receivables and trade payables .3 Solvency assessment at Hanoi branch of KKday Vietnam Co.1 Assess the fluctuations and structure of the company's receivables .2 Assess the fluctuations and structure of the company's payables.3 Analysis of the company's solvency over the past 2 years 2023 - 2024.4 Evaluation of the current practice of Trade receivables and Payable accounting at KKday Vietnam Co.2 Limitations and causes.
88 v SOLUTIONS FOR IMPROVING TRADE RECEIVABLES AND TRADE PAYABLES ACCOUNTING AND SOLVENCY ASSESSMENT AT HANOI BRANCH OF KKDAY VIETNAM CO.1 Development orientation of KKday Vietnam.2 Solutions for improving payables and receivables accounting and solvency assessment at Hanoi branch of KKday Vietnam Co.1 Solutions for trade receivables and trade payables.3 Recommendations for Implementing the Solutions.1 Recommendations to the Government.2 Recommendations to the Ministry of Finance.100 vi LIST OF FIGURES Figure 1.1: Trade receivables accounting chart.2: Trade payables accounting chart.1: KKday’s Income Statement in 2023-2024.2: Organizational structure of KKday Vietnam.3: KKday Vietnam’s Accounting Department.4: Accounting bookkeeping sequence in the form of computerized accounting.5 Document circulation of sales operation.8 Create VAT Invoice on MISA .9 Record receivable on MISA.13 Document circulation of payment operation.17 Payment order records in MISA.20: Confirmation letter from suppliers.74 vii LIST OF TABLES Table 2.1 Some indicators for evaluating receivables.2 Some indicators for evaluating payables.3 Some indicators to analyze the company's solvency.80 viii ABBREVIATION Account receivable AR Account receivable turnover ART Account payable AP Account payable turnover APT Business Development Department BD Department Company Limited Co.,Ltd Joint Stock Copmany JSC KKday Vietnam Branch in Hanoi KKday Vietnam Days of Payables Outstanding DPO Days of Sales Outstanding DSO Vietnamese dong VND Key Performance Indicators KPI 8 INTRODUCTION 1. Rationale Businesses nowadays have to deal with both opportunities and challenges because Vietnam economy is now transparent in the global market economy. Effective financial management becomes an important aspect in determining the stability, performance, and competitiveness of a corporation. Trade receivables and trade payables, as well as solvency, are practically important for a firm, since they can maintain steady cash flow, reduce financial risks, and build effective business strategies.
KKday Vietnam Company Limited is a developing company with a plan to expand its business in the tourism industry. That is why trade receivables and trade payables accounting become vital factors to develop its operation. Additionally, measuring solvency helps the organization meet financial obligations, ensure financial balance, and enhance market credibility. The tourism sector has lots of transactions per day, including transactions from customers and suppliers, creating a huge number of receivables and payables.
To effectively support business activities, this demands that all of the company's transactions be handled precisely, carefully, and publicly. In recent years, KKday Vietnam Co. has made efforts to increase its market share and strengthen its position in the online travel business. To ensure long-term success, the company must improve its trade receivables and trade payables accounting, as well as monitor and assess liquidity.
As a result, understanding this issue is critical, not only for practical applications in financial management, but also for its major contribution to boosting business efficiency and strengthening the company's market position. Based on my academic training, as well as research and practical observations at the company, I have decided to choose the topic: "Trade Receivables and Trade Payables Accounting and Solvency Assessment at the Hanoi Branch of KKday Vietnam Co. Literature review Trade receivables and trade payables accounting are critical components of company accounting, with a direct impact on business performance and reputation. However, the study of trade receivables and trade payables accounting and solvency evaluation is still relatively young, with little specialist research in this field.
Currently, just a few studies have been undertaken on this topic, including the following noteworthy works: Receivables and payables are crucial components of a company’s financial statement, especially the balance sheet, since they reflect the financial commitment and cash flow in the future of the entity. A large amount of receivables can cause liquidity problems because the company has issues with turning them into cash in time to satisfy its financial obligations. Other causes of cash flow problems are from customers who delay or default on their payments. This will limit the company’s capacity to meet operational expenses and clear existing liabilities.
In contrast, a large number of payables also cause financial insecurity. Poor trade receivables and trade payables management can make it difficult for a company to raise future financing, maintain steady relationships with suppliers, or run its operations properly. That is why Kieso & Weygandt (2007) and Henrique et al. (2020) agree that maintaining a balance between receivables and payables is critical for financial stability, solvency, and long-term profitability.
The study "Trade receivables and trade payables accounting and solvency assessment at 2A Technology Import Export Co., Ltd" by Nguyen Thi Phuong Nhung (2019), Banking Academy of Vietnam, addresses the key concepts of trade receivables and trade payables accounting and evaluates how they are implemented in the company. The study shows the advantages and disadvantages of the company's accounting systems and proposes strategies to improve trade receivables and trade payables efficiency. However, it focuses on examining the solvency of receivables and payables rather than doing a thorough evaluation of the firm's other debt-related difficulties. 10 Another important research paper is Nguyen Anh Duc's (2020) study "Completing trade receivables and trade payables accounting at Dai Duong BOT JSC" from the Banking Academy of Vietnam.
This thesis discusses basic trade receivables and trade payables accounting theories, as well as the operational framework of the company's accounting system. It focuses on the procedural aspects of trade receivables and trade payables accounting, suggesting ways to improve debt management and internal controls. However, the study does not comprehensively examine liquidity evaluation, instead emphasizing the adoption of accounting methods. According to existing research, trade receivables and trade payables accounting is critical in corporate financial management, with a direct impact on liquidity, business performance, and financial stability.
However, despite its relevance, the study of trade receivables and trade payables accounting with solvency assessment is not popular. The prior research has looked into trade receivables and trade payables accounting and solvency assessment, and these studies generally focus on the accounting of trade receivables and trade payables within specific companies. The thesis is about other industries and not related to the tourism industry. Additionally, no prior research has been conducted on trade receivables and trade payables accounting at KKday Vietnam Co., particularly at its Hanoi branch.
The tourism industry's unique characteristics, which rely on bookings, collaborations with service providers, and fluctuating demand, make solvency evaluation even more critical. However, there is a considerable deficit in academic research that addresses industry-specific financial challenges. Given these gaps, my thesis, "Trade Receivables and Trade Payables Accounting and Solvency Assessment at the Hanoi Branch of KKday Vietnam Co.," will make a valuable contribution to the tourism industry by providing a better analysis of how the company manages its receivables and payables and how these financial factors affect its solvency. This research will provide practical insights and recommendations to improve financial decision-making inside the organization and the tourism industry as a whole.
This study intends to fill a gap in existing research and act as a resource for future studies on trade receivables and trade payables management in tourism firms. Research subjects - Objectives: This study aims to address the research gap and serve as a resource for future studies on debt management in the tourism industry. It also focuses on improving trade receivables and payables accounting, enhancing financial controls, and leveraging digital technology to boost business efficiency and growth of KKday Co., Ltd in Vietnam at Hanoi Branch. - Scope of study: + Content of research: Due to the limited duration of the internship and the scope of the thesis, this study primarily focuses on trade receivables and payables accounting, and liquidity assessment during 2023 - 2024 at the Hanoi branch of KKday Vietnam Co.
+ Research location: Conducted at the Hanoi branch of KKday Vietnam Co. + Research period: The data used for analysis mainly comes from 2 years: 2023 - 2024 at the Hanoi branch of KKday Vietnam Co. - Research methodology: This study uses a combination of quantitative and qualitative research methods Quantitative method: + Document collection method: Researching and gathering all documents related to the topic from textbooks, accounting standards, regulatory circulars, journals, the Internet, etc., to systematize the theoretical foundation of trade receivables and payables accounting in enterprises. + Verification and reconciliation method: This involves verifying and reconciling accounting records for accuracy and correctness, as well as comparing practical data with theoretical concepts.
+ Comparison and synthesis method: Based on the initial collected data, I systematically synthesized the information to make observations and provide my 12 own assessments of the accounting work in general and trade receivables and payables accounting in particular at the company. Qualitative method: + Financial statement analysis method: This method is used to analyze labor utilization, assets, capital sources, business performance, debt analysis indicators, and liquidity ratios of the company in 2023-2024.
