Parallel Card Accounting

Currently, the company is applying the method of parallel card accounting. This method helps accountants easily perform the checking and collating jobs. From there, it is easy to detect errors in the process of recording, accounting and data entry. In addition, this method also helps to closely monitor the situation of received -dispatch – inventory of materials both in quantity and value. According to this method, accountant book entry is based on goods dispatch note, goods received note, etc. The order of accounting entries of raw materials under the parallel card method is summarized according to the following diagram:

The vouchers for received and dispatch of raw materials are the basis for the stock keeper to write “stock card” and the accounting of materials to record the quantity and calculate into the raw materials received  and dispatch  into the “Material accounting card”. At the end of the accounting period, collate the figures on the “Material accounting card” with the corresponding “Stock Cards” transferred by the stock keeper. At the same time, from the materials accounting card, the accountant shall take data to record in the “Stock summary report” of each group, each type of material to compare with the total accounting data.

Recording flow:

At the stock: when receiving the import and export documents, the stock keeper must check the legal and reasonable situation of the voucher and record the actual import and export book into the voucher and on the stock card. At the end of the day, the stock keeper will make a list of the inventories and put them into the stock card. Periodically, the stock keeper sends to the accounting department or the accountant goes to the stock to receive the documents (the documents of received and dispatch of classified materials). The stock keeper must regularly compare the inventory with the actual inventory, regularly compare the material balance with the material stocking norm and provide this situation to the known materials management department. have decided to handle.

In the accounting department: the accounting department opens the material accounting card with the same structure as the stock card but adds columns to keep track of the whole value index. When receiving the import-export vouchers sent by the stock keeper. Material accountants must check vouchers, write unit prices and calculate prices on vouchers of dispatch note goods, goods received note and then record in material accounting card, Nominal ledger. At the end of the month, accounting materials check material accounting card to calculate the total inventory of each item to compare with the stock keeper’s stock card. In addition, in order to have data compared with general accounting, accountants need to summarize detailed accounting data from other subsidiary books into stock count minute for each type of supplies.

2.1.2.2. Detailed accounting of raw materials at the stock

Based on the original documents being goods received note and goods dispatch note, the stock keeper reflects the fluctuation in terms of quantity of materials on the stock card. Stock card is made for each type of material, it specifies the amount of input – output – inventory, the amount of inventory is the basis of the physical inventory reserve of that material. The company’s stock card is using the form prescribed by Ministry of Finance. When there is arisen, input or output, the storekeeper will check the legality of the documents for proceeding with the received and dispatch of raw materials. After that, the storekeeper will record the data of input and output of raw materials into the goods dispatch note, the goods received note and the stock card.

Receipt of goods received note and goods dispatch note, arranged by storekeepers separately according to each type of material for every 5 – 10 accounting days to go to the stock to be taken to the accounting department for accounting entries.

For example: From goods received note No. 41 (Fig. Xxx) February 7, 2020 and goods dispatch note No. 67 (Fig. XX) of February 11, 2020, along with other input and output vouchers, the storekeeper will make a stock card. With the materials “Royal fabric” and “AT fabric” as follows:

Table 2.6:  Stock card Royal fabric

Table 2.7:  Stock card AT fabric

2.1.2.3. Detailed accounting of raw materials at accounting department

In the accounting department, every week, the raw material accountants will summarize the input and output documents from the stock keeper. Accounting material vouchers are classified as follows: classified by groups, types of materials, then further classified by form of payment (for goods received note) or by users (for goods dispatch note).

Based on input – output documents, accountants enter data into the software. Accounting software will automatically enter the material subsidiary ledger. At the end of the month, accountants will print the ledger and close it into a book.

On the material subsidiary ledger, raw materials are monitored both in quantity and value. Accountant and stock keeper will conduct the reconciliation of books (material subsidiary ledger and stock cards) to ensure the accuracy in accounting, timely recording to detect and handle errors (if any).

Table 2.8:  Detailed material book: royal fabric

Table 2.8:  Detailed material book: AT fabric

At the end of the month, from material subsidiary ledger, the accounting data will be aggregated to make a list of stock summary report according to each group, type of material. The data on this list will be used for comparison with the Ledger. Stock summary report of Kingpeak Co., Ltd has the following form:

Table 2.9:  Stock summary report

 Table 2.9:  Material distribution report

• General Accounting for materials at Kingpeak limited company
  • List of account

Kingpeak Company applies general accounting of materials according to the perpetual inventory count. It is a form of monitoring and regularly and systematically reflecting the situation of input, output and inventory of raw materials on accounting books. Therefore, the Company’s account system used in accounting of raw materials is as follows.

The accountant uses account 152 of raw materials to accounting entries the transactions related to raw materials according to the regulations of the Ministry of Finance.

Account 152 “Raw materials, materials” – This account is used to record the current number and monitor the situation of increase or decrease of raw materials at current prices. At Kingpeak Co., Ltd, Account 152 is detailed to level 4 to meet the accounting needs in a detailed and complete manner. TK152 is structured like accounts belonging to other types of asset accounts, which are:

Debit: Reflecting the actual value of raw materials increased in the period

Credit: Reflects actual value of raw materials decreased during the period

Debit balance: Actual value of inventory materials

In order to meet the needs of accounting entries and managing materials in a complete and accurate manner, account 152 has specific details to many smaller levels. For example:

Table 2.10: List account

In addition, to accounting entries the raw materials account, the accounting of raw materials also uses other types of accounts such as 111, 112, 331 (opened details for each supplier), 133, 141, 621,627

• The process of bookkeeping

Figure 2.3: Bookkeeping scheme

Note:

Daily record:

Monthly record:

Collate and check:

Every day the checked documents are used as a basis for bookkeeping. When the vouchers are full of legal documents, accountants make input on Misa accounting software. From there, the accounting software will automatically enter the documents into the company’s journal. Since then the accounting software will automatically be recorded in the general ledger according to the appropriate accounting accounts. Simultaneously with the recording in the journal, the arising operations are recorded in the material detailed book.

At the end of the month, at the end of the quarter, at the end of the year, accountants will check and compare data on the software and original documents. After checking the matching, the figures are recorded in the journal and the original documents for making financial statements.

• General accounting of materials
  • General accounting of raw material received

The main materials of Kingpeak Co., Ltd. are mainly purchased from third-party suppliers. For raw materials, the company is hired to process by signing a processing contract with a partner, according to Circular 200/2014 / TT-BTC Kingpeak Co., Ltd will not reflect processing raw materials into account 152 because it is not owned by the enterprise. When receiving processed materials, Kingpeak Co., Ltd. will actively monitor and record information about the total value of supplies and goods received for processing in Financial statement footnotes. When the company determines the revenue from the actual processing benefits, the accountant will account as follows:

Debit 111, 112, 131, …

Credit 511 – Turnover from goods sale and service provision

Credit 3331 – VAT payable (33311).

The company still mainly input raw materials purchased from outside, supplied by suppliers in the market. The characteristics of the manufacturing company are that raw materials account for a large proportion of the production cost. Therefore, every time of importing materials is relatively large, the company often chooses to pay later via bank transfer. At the same time with such a large volume of purchases, there are many cases of goods and invoices coming together or returning at different times. Depending on the circumstances, accountant applies accounting entries accordingly.

Example 1: The company buys royal fabrics for warehousing according to VAT Invoice No. 000775 of Kim Tu Co., Ltd. on March 15, 20, quantity 2000 meters, the unit price of tax is 127,600 dong/meter and 10% VAT. The total payment price is VND 280,720,000. The company pays the seller within 15 days from the date of receipt of contractual goods via bank transfer. In this case, the goods and invoices return to the same day on March 15, 2020. The accountant will make a statement as follows:

Dr 1521: 255,200,000

Dr 133: 25,520,000

Cr 112: 280,720,000

Example 2: The company buys AT fabric for warehousing according to VAT invoice No. 0001232 of Trinh Kim Garment Joint Stock Company on 12/03/20, quantity 3000 meters, the unit price of duty is 78,300 VND / meter, VAT 10%. The total payment price is VND 234,900,000. The company pays the seller within 7 days from the date of receipt of goods under the contract via bank transfer. In this case, the goods and invoices return on the same day 12/03/20. The accountant will make a statement as follows:

Dr 1521: 234,900,000

Dr TK 133:    23,490,000

Cr TK 112: 258,390,000

After preparing the goods received note, the accountant will enter all transaction data into the software system of the company. The system will then automatically record in Ledger Accounts 152, 133, 331, and detailed book. For the form of payment by bank transfer, the sales department must prepare the “Payment demand letter” and “Request for money transfer” and transfer it to the accounting accountant to complete the payment procedure for the supplier.

• General accounting of raw material dispatch

At Kingpeak Co., Ltd, the material export transaction takes place regularly, the main raw materials are dispatch to produce products, serving the management at enterprises; some are very few and negligible for sales and corporate management. The departments make a materials requisition based on product norms, production plans, and production orders of the management. The number of raw materials exported will be approved by management to ensure the strict use of raw materials. This amount of dispatch is specific to each purpose that is the factory. Accounting entries cost is very important, moreover, the cost of raw materials at the company accounts for a large proportion of the total cost. Therefore, the general accounting of dispatch raw materials must reflect promptly and accurately allocate to the right users. When the operation of dispatch raw materials, depending on the object of use, accountants make accounting and enter data into the software. When applying the accounting software, when receiving the goods dispatch note, the accountant will update that goods dispatch note to the system. The accounting software will automatically update into ledger TK 152, details book of related reports.

For example: 11/02, goods dispatch notes No. 67 (Table 2.7), raw materials for production of orders Zara1067, raw materials with a dispatch value of 51.8 million VND. Material accounting will account for the following:

Dr TK 621: 51.800.000

Cr TK 1521: 51.800.000

Example 2: Dispatch transaction 500 meters of AT fabric to produce the order of AV1302 according to the export form No. 81 dated March 14, 2020, the accountant shall make the following accounting:

Dr TK 621: 128.975.000

Cr TK 1521: 128.975.000

All goods dispatch notes will be combined and entered the accounting software system. The software will automatically allocate and update data into ledgers, detailed books, stock summaries report, etc., always ready to use when needed. All input and output operations of the company’s raw materials (except outsourced raw materials) are reflected and monitored in Ledger 152. Ledger 152 reflects all existing amounts and the variable situation fluctuations of all materials that the company input and output.

In order to better understand the use of general records in the accounting of raw materials, the following are excerpts of some general ledger forms that the company uses. The first is the General Journal, which is updated daily from goods dispatch notes and goods received notes that accountants enter the system.

Table 2.11:  Journal ledger

Table 2.11:  General Ledger

• Inspection, revaluation of raw materials

According to the regular plan, Kingpeak Co., Ltd. conducts an inventory of materials at the end of the year (may make an unscheduled inventory depending on management requirements). Inventory of raw materials aims to determine the actual quantity and quality of each existing material. Also check the situation of storage of raw materials in the warehouse. Help the company promptly detect cases of loss, damage, stagnation, poor quality, … of raw materials. The company will issue timely remedies. Inventory board will measure, calculate the actual quantity in the warehouse. Completing the inventory process, the inventory board will prepare an inspection report.

The inspection report is a document to accounting entries for changes in inspection report

In case stock take is found to be missing, damaged, or lost materials, based on the inspection report of Kingpeak Co., Ltd., the accountant records an increase in cost of goods sold directly account 6320

Dr 632: Damaged and lost parts

Cr 152: Raw material

For example: After receiving the inventory of raw materials (Table 2.34), compared with the summary of input – output – inventory of raw materials, “Sewing thread 54”, the stock take count is the same as the quantity on the register. At the end of the book period, there were 8 rolls (with the book price of VND 145,000) but they were moldy due to poor storage, these materials did not guarantee the quality of the products at the company. Therefore, cancellation is granted, and the value of these materials is recorded to the account of cost of goods sold in the period:

Dr 632: 145.000

Cr TK 152: 145.000

Table 2.12: Inspection report

CHAPTER 3: COMPLETING ACCOUNTING PROCEDURES FOR RAW MATERIALS AT KINGPEAK LIMITED COMPANY

3.1. Assessing the current accounting procedures for raw materials at kingpeak limited company

After years of construction and growth, Kingpeak Co., Ltd. has constantly grown in all aspects. The company has been reaping great achievements. In general, Kingpeak Co., Ltd. has a strict management apparatus, the departments are assigned tasks in a clear, scientific and coordinated manner. Kingpeak Co., Ltd. is a manufacturing enterprise so costs raw materials account for a large proportion of the cost of products. Therefore, the organization of accounting entries is indispensable and must ensure all three basic requirements: timely, accurate, and comprehensive. Supplying materials promptly and synchronously for production needs, inspecting and supervising the observance of material consumption norms, preventing wastefulness, and raising the efficiency of capital use. However, depending on whether materials accounting entries can ensure all these factors or not, and depends on whether to analyze supply and use of raw materials.

After a period of intern in the accounting – finance department of Kingpeak Co., Ltd., contacting department, accountants as well as the parts they were in charge, I found that accounting at the company had Pros and cons:

3.1.1. Strengths

3.1.1.1. Materials management

The management of raw materials at Kingpeak Co., Ltd. has been built quite scientifically and logically from the stage of purchasing, storing to preserving and using raw materials.

Organize the procurement of raw materials

As a manufacturing enterprise, raw materials are essential inputs for the company’s operations. Therefore, at Kingpeak Co., Ltd. the procurement of raw materials is always focused. In addition, the sales department of the company often learns about the current suppliers in the market, from which to contact to get a stable supply of materials at a low purchase price and ensure the quality of contribution. partly reducing raw material costs, reducing production costs, reducing product costs, creating a competitive advantage for their products.

Storage, preservation and use

In order to ensure the quality of raw materials and timely supply for production and business activities of the company, the storage and preservation of raw materials are made at the company’s raw material warehouse. Currently, the company’s material warehouse is well organized, arranged near-production workshops so it is convenient for transportation, avoiding loss and loss. Storage system of the company has enough conditions to ensure convenience for the import, export and stock take of raw materials.

Especially, when buying raw materials for warehouse, the company has organized a good job of assessing the quantity and quality, quality and specifications of raw materials before warehousing, ensuring that the raw materials are enough. good production standards and high-quality products.

Regarding the dispatch and use of raw materials, the dispatch and use are made in accordance with the production purposes and production management based on the consumption norms of exported raw materials used for the production and business of the company. When there is a demand for materials, the department must send a request for materials export to the sales department and must be reviewed and approved by the director. This helps to manage the raw materials used for production and business activities of the company and is a key basis for striving to lower the cost of raw materials in product costs.

3.1.1.2. Voucher system, accounting method and raw material price calculation

The system of vouchers and accounting books on materials of the company is made relatively complete in accordance with the provisions of the Vietnamese Accounting System and in accordance with the characteristics of the Company’s production and business. Nominal Ledger of materials is organized in the form of the journal with simple book templates, easy to understand, easy to carry out, and easy to check. The account that the company opens and uses in accordance with the provisions of the Accounting System issued by the Ministry of Finance.

Regarding the accounting method, the company is applying a perpetual inventory count, so the situation of importing, exporting, and inventorying materials on the accounting books are monitored and reflected regularly, continuously, and systematically. This is an accounting method suitable for the characteristics of the company’s production and business.

Regarding the calculation of raw material prices, the company is currently using Specific cost identification. The calculation of raw material prices is consistent with current accounting standards. For dispatch materials, the company applies specific cost identification method. According to this method, products, supplies and goods that are released from the warehouse will be equal to the price at the time of warehousing. This method complies with the relevant accounting principles. The value of materials delivered goes into production in accordance with the costs the company has spent. The value of inventory materials is properly reflected in its actual value. Moreover, applying this method of accounting, the actual cost of inventory can be calculated immediately without having to wait until the end of the accounting period. Therefore, it has a positive effect on the management of the company closely, closely. Accounting can calculate the reasonable and accurate cost for each shipment from which to take appropriate measures to the goal of lowering product costs.

3.1.1.3. General accounting of raw materials

The company applies a parallel card method to manage inventory in and out. This method is easy to record, easy to compare and quickly detect errors, and relatively easy to apply

Kingpeak Co., Ltd. applies the form of general journal accounting – this is a form quite suitable to the characteristics of the company. Moreover, applying the common journal accounting form is also convenient for applying software accounting, helping to reduce the workload while still fully reflecting the arising economic operations. Perpetual inventory count is also used appropriately by the company. With the system of thousands of auxiliary materials with abundant types, it is required to be monitored regularly so as not to interrupt the production process.

3.1.1.4. Software accounting

Accounting work will become simpler when raw and warehoused materials are monitored on accounting software. Previously, the workload of accounting was extremely much without application of accounting software. The process of handling documents and making reports became more convenient when applying accounting software. The benefits of accounting software are more evident when applied to accounting of raw materials. When having the import and export operation of raw materials, the warehouse department is responsible for making goods dispatch notes, goods received notes and saving notes to the machine, thanks to the connected computer system, the accountants only need to find those vouchers and record them in the book. advantageously without fear of duplication or omission. Due to the director’s request, the accounting department always must aggregate the data in the books in a timely manner so that it can periodically publish internal reports. When applying accounting software helps accountants save time, improve accuracy. Especially the goods received notes, goods dispatch notes are stored in the machine to help the accounting data be consistent with the storekeeper. Besides, accounting software also helps accountants can access data easily. Print and report jobs are carefully archived.

3.1.2 Weakness

3.1.2.1. Detailed accounting of materials

The recovered scrap does not carry out the procedures for warehousing, it is not reflected in the journal both in quantity and value. In fact, when the production cost is calculated and the product price is calculated, the product price is calculated according to the following formula:

Therefore, the calculation of the value of recovered scrap as well as utilization of scrap but other things will contribute to lower production costs.

3.1.2.2. Materials management

Many perennial raw materials due to excess in production are still monitored and inventoried periodically. This problem wastes accounting resources and storage. Because of the long-term inventory, these materials can no longer be used due to mold, rot and this will make it difficult for the company when capital is backlog. Many materials have not been imported or exported for many years, but accountants still must follow and fulfill accounting procedures.

The store of basic materials is well designed, ensuring material facilities. But due to the characteristics of the tropical monsoon climate, Raw materials are easily moldy when in winter. This often happens with less used materials.

3.1.2.3. Voucher system, accounting method and raw material price calculation

The process of document rotation is still manual, many cumbersome procedures, many levels of approval so sometimes time-consuming. Accounting after 1 week to go to the warehouse to get documents to the accounting department. Import-export operations are always going on, so the reflection of accounting information is still slow.

At Kingpeak Co., Ltd. currently, the materials used include many types with different buying sources, the market price often fluctuates. On the other hand, due to the increasing demands of customers about the quality and design of products, raw materials also require constant improvement of specifications and quality. With such fluctuations in prices and types of raw materials, the company has not yet made a provision for raw materials so far, so the reflection of the value of raw materials may be higher. market price, affecting the policy of purchasing and storing material of company.

3.1.2.5. Reporting raw material

At Kingpeak Co., Ltd, the company management is always concerned about the profits and production costs. But with the important role of raw materials at such a company, Kingpeak Co., Ltd. has not yet used any type of report for analysis, showing the situation of purchasing and using raw materials at the company. The company only has general types of reports, but there are no more micro reports that can help the board of directors make strategic plans for the company. information on the implementation of material plans, the use of raw materials for production, and can lead to an inadequate assessment of capital use efficiency.

3.2. Recommendations to improve the accounting for raw material at kingpeak limited company

3.2.1. Materials management

When dispatch raw materials, the company needs to minimize unnecessary procedures to shorten the time and do not interrupt the production process.

Constructing the stock scientifically, if possible, should have a hygrometer and industrial dehumidifier in the company’s warehouse. This helps to ensure the best conditions of storage of raw materials in the warehouse, to ensure the quality of the raw materials in the warehouse and not to reduce the value when stored for too long.

The company should build a system of norms related to materials more clearly and closely. The company accountant should organize the procurement process, not just participate in the accounting and payment process. Tighten costs at the purchasing stage to avoid waste, fraud, and loss. At the same time, ensure the procedures for warehousing of raw materials in accordance with strict regulations set by the company.

3.2.2. Voucher and voucher rotation

The accounting work of Kingpeak Co., Ltd. now uses all the required documents to reflect the transactions of raw materials. All arising economic operations related to raw materials must be truthfully and objectively recorded and recorded. The company has applied the correct voucher system for businesses regulated by the Ministry of Finance.

For mandatory accounting vouchers prescribed by competent state agencies, units must strictly comply with the forms, contents and methods of making. The problem of document rotation of the company is still quite slow. At the beginning of the week, the new accountant goes to the warehouse to get the documents to the accounting department. As a result of untimely tracking of accounting materials, the work will lead to the risk of errors. The storekeeper should circulate the inventory receipt for accounting of raw materials at the end of the day or at most every 2 days to avoid this situation.

For the form of documents circulating internally such as the ” Materials requisition” the company needs to reduce the procedures. The company needs flexible items to fit the needs of the user or only needs one-level accept to save time for approval.

3.2.3. Accounting detail book

The company is applying the parallel card method. The company is using this method very well. The parallel card method is only optimal for small businesses with few types of materials. In the near future, if the company’s business develops, there are many types of materials in the warehouse. Then the parallel card method will not work well. The advantage of parallel card recording methods such as accuracy and timeliness will not be optimal when there are too many arising transactions. When raw materials are received and dispatched continuously and intricately, this method becomes inefficient. But in my opinion, with good qualifications and machine accounting applications will completely overcome the disadvantages of this method and promote its advantages.

3.2.4. Reports related to the material

Reports about raw materials, inventories as well as used volumes are too biased towards past data. That is, the reports mainly aim at monitoring the process of using raw materials, serving the preparation of financial statements. In order to improve the ability to manage and use materials more effectively, reports on materials need to go towards the purpose of serving management accounting more. For example, reports on future consumption of raw materials, plans for procurement and use of raw materials, and reports on future market prices of raw materials should be prepared regularly and in response to demand further. Thereby avoiding the situation of making reports for full procedures that cannot be used for any management purpose. The reporting system needs to contribute more to the management and development strategy of the company

CONCLUSION

Material management is one of the important issues of business management. Raw material management becomes even more important when businesses want to grow. Improving the management of raw materials in any business has a major role to the production and business efficiency of each business.

Kingpeak limited company is a unit specializing in the production and trading of garments, so the raw materials used in large quantities and diverse types. Along with the efforts of management, functional departments, especially sales, technical and accounting departments, have ensured continuous production. The company’s products not only satisfy domestic demand but also overseas markets. Sales department with materials planning and supply department and accounting department with material accounting department have been constantly improving to successfully complete the material supply task to help the company manage materials. safe materials, avoiding loss, loss and waste. In addition, it contributes to reducing production costs, increasing working capital flow rate, thereby increasing the efficiency of production and business for enterprises.

Through researching the material management process at Kingpeak, I came up with a few issues. In general, the company’s material management is relatively well implemented at all steps in the management process. The organization of appropriate materials management network, with the coordination between the concerned departments and effective operation. The company has built a reasonable material plan and efficient use of materials. The procedures for importing – exporting raw materials are done quite strictly according to a certain process. raw materials are well preserved, safe and ensure timely supply for production. The monitoring and recording are done fairly accurately, in a timely manner, reflecting the fluctuation of raw materials both in quantity and value of raw materials during the process of import – export – inventory of raw materials on the system of vouchers and records to provide information to managers. However, the reflection on vouchers and accounting books is still lacking, so the management is somewhat limited.