NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ACCOUNTING AND AUDITING 0 Delt. BACHELOR THESIS ACCOUNTING PROCEDURES FOR PAYROLL AND PAYROLL DEDUCTION AT THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JOINT STOCK COMPANY Student name: Dang Khanh Huyen Student’s ID: 11182251 Class: Accounting CFAB K60 Supervisor: Assoc. Nguyen Thanh Hieu Ha Noi, 2022 STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Bachelor Thesis independently. I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper.
I clearly marked and separately listed all the literature and all other sources which | employed producing this academic work, either literally or in content. Hanoi, 30/06/2022 Signature TABLE OF CONTENTS INTRODUCTION Vv CHAPTER 1; FEATURES OF LABOUR AND PAYROLLAND MANAGEMENT OF LABOUR AND PAYROLLAT THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JOINT STOCK COMPANY. Features of labour and payroll at Thanh Nam. The form of payment for salaries and wages applied at Thanh Nam.
The forms of paymernt for salarIes and Wa؀s. Policies of payroll deduction applied at Thanh Nam. Features of organization of labour and payroll at Thanh Nam.15 CHAPTER 2: CURRENT SITUATION OF ACCOUNTING PROCEDURES FOR PAYROLL ANF PAYROLL DEDUCTION AT THANH NAM. Accounting for payroll at Thanh Nam.
Methods applied for payroll ealculation. Accounting procedures for payfolÏ. Accounting for payroll deductions at Thanh Nam. Accountfing for procedures for payroll deductionis.àccccccsccà 55 CHAPTER 3: IMPROVEMENT OF ACCOUNTING PROCEDURES FOR PAYROLLAND PAUROLL DEDUCTIONS AT THANH NAM SC.
Assessing the current accounting procedures for payroll and payroll deductions at Thanh Nam. Suggestions to complete accounting procedures for payroll and payroll deductions at Thanh Nam. Management of payroll and payroll deductions. Accounting documents and doeumenfs transfET.
Conditions needed for implementing proposed solutions. 68 CONCLUSION 69 REFERENCES 70 1H LIST OF TABLES Table 1.1: Group of workforce at Thanh Nam.2: Working index for Job tIfÍ€§.3: Salary for public holIdays. 8xx raye 7 Table 1.4: Salary for personal leaVe.-- cành HH HH nh Hà HT re 8 Table 1.6: Percentage of payroll deductions (01/01/2021 — 30/06/2021).7: Percentage of payroll deductions (01/07/2021 — 30/09/2021).8: Percentage of payroll deductions (01/10/2021 — 30/06/2022).9: Percentage of payroll deductions (01/07/2022 — 30/09/2022). óc cty HH HH HH HH rệt 20 Table 2.2: Timesheet of office staffs.3: Payroll sheet of workers at SOjJÔ.4: Bonus payment sheet for New YaI.5: Advanee Payment Request.8: Sick leave ceTHÍICAf€.
chà HH HH HH Hà HH He Hrec 50 Table 2.9: Soctal Insurance s€CfIOH. cc ccn nhà nhàn HH Hà re 51 Table 2.11: Insurance premium she t.1: Payroll sheet of construction departimeii.-- c2 s2 22222 vsexs 67 INTRODUCTION To begin with, for every employee, wages and salaries take a significant role to apply for a vacancy at a company. The remuneration is a main source of income to make up their waste labour. Therefore, a reasonable income for workers needs to satisfy the basis of productivity and minimum living standards.
In addition, the employees take notice of salary disciplines detailed in remuneration regime in order to determine that whether or not they are fit for the job. For business sector, one of the primary objectives to manage an organisation effectively and efficiently is the payroll management. It is clear that the payroll focuses not only on remuneration regime but also on measure of staffs’ performance. The managers will evaluate the quantity and quality of labour through the payroll for the purpose of optimizing labour costs.
From that point, the company can adjust the plan of staff allocation, for example, according to each product price as well as distribution and administrative costs. Moreover, based on workers’ information on the payroll, the business also can prepare some contingency plans for the shortage or surplus labor events to occur. In order to comprehend how payroll is created and how the use of labour ability is effective and efficient, the thesis is built with the aim of studying, analysing and assessing the accounting procedures for payroll and payroll deduction at Thanh Nam investment construction and development trading joint stock company. As a result, the thesis provides some related recommendations to the improvement of the salary and salary deduction procedures.
The scope of the thesis consists of the Accounting Department of Thanh Nam. There are three main parts involved in the thesis as following: Chapter 1: Features of labour and payroll and management of labour and payroll at Thanh Nam investment construction and development trading joint stock company. Chapter 2: Current situation of accounting procedures for payroll and payroll deduction at Thanh Nam investment construction and development trading joint stock company. Chapter 3: Improvement of accounting procedures for payroll and payroll deduction at Thanh Nam investment construction and development trading joint stock company.
CHAPTER 1; FEATURES OF LABOUR AND PAYROLL AND MANAGEMENT OF LABOUR AND PAYROLL AT THANH NAM INVESTMENT CONSTRUCTION AND DEVELOPMENT TRADING JOINT STOCK COMPANY. Features of labour and payroll at Thanh Nam., JSC actives in construction field as a subcontractor. The company provides mostly construction services for a wide range of construction projects like mixed-used commercial projects, residential projects and education projects. Due to the features of construction industry as well as each kind of building projects, the workforce of the company is required high standards of age, health, gender, technical level and experience.
As a result, Thanh Nam., JSC owns a ad-hoc labour force which comprises two types of objects: direct workers and indirect workers. The direct workers often serve with short-term contracts (under one year). Hence, they do not contribute for the social insurance, health insurance, unemployment insurance. They are bricklayers, masons, welders, plumbers etc.
who incline to work as manual employees at the construction site completely. In accordance with the features of this group, the criteria for the recruitment depend on significant factors such as whether the candidates are of working age (at least 18 years of age according to Labor Code 2019), whether they meet the health requirement for the job, whether they are male or female, and whether they are skilled workers. Therefore, the direct labor are young mostly and in rude health. Additionally, they are not required to own any professional certificate but they should have practical experience.
The indirect workers as management officers, quantity surveyors, quality controllors etc. who work under long-term contracts so they have responsibility to participate in the social insurance, health insurance, unemployment insurance totally. Furthermore, unlike direct labour, office staffs need to have specialized knowledge so they mostly graduated from related college or university. They direct the implementation of a plan and manage the direct workers to ensure that the projects are performed as expected.
Accordingly, the office staffs can work at the company’s office or at the construction site with the direct employees. For the new employees, the firm plans training programmes which are combined with a two month probationary period. The seniors train for the new workers and the professional train for the new staff as well as officers to follow the set procedure very precisely. Especially, the new entrant who works in the business as an apprentice are trained and evaluated carefully by the experts as the managers.
After the training period, individuals completing the scheme successfully would officially sign the labor contract. Due to the unique features of the construction labor, the number of labor force at the company in the period from 2019 to 2021 is also interested and shown as below: No Number of employees Department 2019 2020 2021 Indirect labour 18 19 21 1_ | Board of Director 5 5 5 2_ | Accounting Department 4 3 4 3 | Admin & Human Resource 2 2 3 Department 4 | Material supply Department 1 2 2 5 | Construction Department 6 7 7 Direct labour 329 207 426 Total 347 226 447 Table 1.1: Group of workforce at Thanh Nam., JSC It is noticeable that the number of human resource at Thanh Nam., JSC over the years has changed significantly. For the indirect labour, there were some slight variation in the number because they signed the long-term contracts and that means they are required a high commitment to the business (motivation, loyalty and job satisfaction). In general, the quantity of indirect staffs had increased slightly by 3 individuals over 3 years from 2019 to 2021.
However, the number of direct workers is very numerous and continuously fluctuates from year to year or evenly in a year. For instance, there was a considerable decrease in the quantity of direct employees from 329 workers in 2019 to 426 workers in 2021. The major reason for this decline is that the Covid-19 situation in 2020 was tured seriously with the dramatical increase in the number of cases and the business was under orders to put a stop to all construction projects. Therefore, all direct employees operating at construction sites stopped their work for a long time.
Until 2021, the situation returned to normal leading the return of work so the number of direct labor boost substantially. 2 In addition, the number of direct labor is more volatile than indirect labor. In fact, the fluctuation is influenced by the unique characteristics of construction field. A construction project does not provide a stable job over the years for direct labor due to its “one-off nature”.
Consequently, the direct labour engaged in construction area is seasonal and migratory employed on a piece-rate basis. They are essentially dedicated to farming during a certain period or climatic conditions in a year. During the rest of the year, they are engaged as construction labor for intermittent short durations. They do not reflect their contribution in construction as an occupation.
Accordingly, the degree of commitment they have to the profession is not really extensive and they have little loyalty and motivation to enhance the necessary knowledge and skill of the chosen trade. Due to the marked differences between the two kinds of labour, Thanh Nam., JSC has human resource management (HRM) to developing and maintaining an effective labour force which matches the business’s requirements. Unlike the indirect staffs, the direct employees need to be managed in a strict and systematic way to avoid a shortage of human resources as well as to ensure cost-effectiveness. Human resource department and construction department coordinates perfectly for the management of the direct workforce.
As a subcontractor, the company has a wide range of construction contracts as well as projects at the same time to expand the business. Hence, setting up reasonable plans for rotation of the direct employees is very crucial because the managers need to take full advantage of this numerous workforce. The form of payment for salaries and wages applied at Thanh Nam. Payroll policies Thanh Nam., JSC institutes the payroll policies to run the payroll procedure smoothly as well as guarantee workforce of accurate and timely payment of salaries and wages.
The salary policies, thus, perform a huge role in maintaining the staff morale and the stability of business finance. Principles for formulation of payroll In compliance with Decree 49/2013/ND-CP, the firm also sets up some principles for formulation of payroll as below. Pay scale is based on the region-based minimum wage announced by the Government to adjust the salaries and wages of each job title to the finance of the company: + The lowest salary for the simplest position but not less than the region- based minimum wage. + The lowest salary for the simplest position with training or apprenticeship is greater than 7% the region-based minimum wage.
+ With the same job title, employees working in heavy and dangerous conditions will be paid at least 5% higher salary than workers working in normal conditions. Because as the rule, if the enterprise with the current salaries and wages does not meet the above conditions, it will have to adjust the payroll, and the enterprises find that each year the region-based minimum wage is likely to increase, the company always sets the salary equal to or higher than the region-based minimum wage to save time as well as costs.