FOREIGN TRADE UNIVERSITY

FACULTY OF ACCOUNTING AND AUDITING

---------***--------

MID-TERM INTERSHIP REPORT

Major: Accounting - Auditing with ACCA orientation

ACCOUNTING FOR TRADE RECEIVABLES AT

SG SAGAWA VIETNAM CO., LTD.

Student name: Vu Thi Minh Phuong

Student code: 1918820031
Class: English 01
Intake: 58
Supervisor: PhD. Dang Thi Huyen Huong

Hanoi, August 2022

 CONTENTS

LIST OF ABBREVIATIONS .....................................................................................

LIST OF FIGURES ....................................................................................................
ACKNOWLEDGEMENT.........................................................................................1

CHAPTER 1: GENERAL INTRODUCTION ABOUT SG SAGAWA

VIETNAM CO., LTD ............................................................................................... 2
1.1. Establishment and development of SG Sagawa Vietnam Co., LTD ....... 2
1.2. Main services of SG Sagawa Vietnam Co., LTD ...................................... 3
1.2.1. Air freight service: .................................................................................. 3
1.2.2. Ocean freight service: ............................................................................. 3
1.2.3. Road transportation service (Trucking): ................................................. 3
1.2.4. Cargo clearance & customs declaration services (customs
procedures): ......................................................................................................... 4
1.2.5. Domestic and international express delivery services ............................ 4
1.2.6. Warehousing service: .............................................................................. 6
1.2.7. Removal services: ................................................................................... 6
1.3. Organizational structure, functions and their tasks ................................ 7
1.3.1. Hanoi Branch Manager and BOD: ......................................................... 7
1.3.2. Human resources and Admin Department:............................................. 8
1.3.3. IT Department: ........................................................................................ 8
1.3.4. Services Departments: ............................................................................ 8
1.4. SG Sagawa Vietnam Co., LTD accounting department’s structure: ..... 8
1.5. Performance of SG Sagawa Vietnam Co., LTD ....................................... 9
CHAPTER 2: ACCOUNTING FOR TRADE RECEIVABLES AT SG
SAGAWA VIETNAM CO., LTD .......................................................................... 11
2.1. Credit sales policy of SG Sagawa Vietnam Co., LTD ............................... 11
2.2. Overall trade receivables status at SG Sagawa Vietnam Co., LTD ........ 12
2.2. Procedures and regulations: ........................................................................ 13
2.2.1 Set a credit limit and payment terms: ....................................................... 13
 2.2.2. Credit limit and payment terms management: ........................................ 13
2.2.3. Recover debts: ......................................................................................... 14
2.2.4. Report on periodic debt: .......................................................................... 15
2.3. Risks of credit sales of SG Sagawa Vietnam Co., LTD: ........................... 15
2.3.1. Burden of bad debts................................................................................. 16
2.3.2. High risk of bankruptcy........................................................................... 16
2.4. Credit customers checking of SG Sagawa Vietnam Co., LTD: ............... 17
2.5. Bad-debt and provision making of SG Sagawa Vietnam Co., LTD: ....... 17
2.6. Receivable status of SG Sagawa Vietnam Co., LTD in 2020-2021: ......... 18
2.7. Process of journalizing Trade Receivables at SG Sagawa Vietnam Co.,
LTD: ..................................................................................................................... 18
2.8. Bookkeeping system of SG Sagawa Vietnam Co., LTD: .......................... 19
2.8.1. Ledger: .................................................................................................... 19
2.8.2. General journal: ....................................................................................... 19
2.8.3. Cash collection journal: ........................................................................... 20
2.8.4. Detailed book of accounts receivable: .................................................... 20
2.9. Evaluation of Trade Receivables accounting at SG Sagawa Vietnam Co.,
LTD ....................................................................................................................... 20
2.9.1. Strengths .................................................................................................. 20
2.9.2. Weaknesses ............................................................................................. 21
CHAPTER 3. RECOMMENDATIONS FOR ACCOUNTING FOR TRADE
RECEIVABLES AT SG SAGAWA VIETNAM CO., LTD .............................. 23
3.1. Open a detailed tracking book for each type of Service ........................... 23
3.2. Reduce exchange rate difference ................................................................ 23
3.3. Check the Customer list regularly:............................................................. 24
3.4. Other solutions: ............................................................................................ 25
CONCLUSION ........................................................................................................ 26
REFERENCES ........................................................................................................ 27
APPENDIX .............................................................................................................. 28
 LIST OF ABBREVIATIONS

Abbreviation Stands for

Dr Debit
Cr Credit
FAST Freight Assistant System Technology
BOD Board of Directors
BOM Board of Managers
Co., LTD Company Limited
 LIST OF FIGURES

Figure 1.1. Domestic delivery process ........................................................................4

Figure 1.2. International delivery process ...................................................................5

Figure 1.3. Organization function of SG Sagawa Vietnam Co., LTD ........................7

Figure 1.4. Organization chart of SG Sagawa Vietnam Co., LTD .............................7

Figure 1.5. Accounting Department chart of SG Sagawa Vietnam Co., LTD ............9

Figure 2.1 FAST system of SG Sagawa Vietnam Co., LTD ....................................13

Figure 2.2. Outstanding update (aged receivables) of SG Sagawa Vietnam Co., LTD
...................................................................................................................................17
 ACKNOWLEDGEMENT

First and foremost, I would like to state my gratefulness to Foreign Trade

University and Faculty of Accounting and Auditing for opportunities to experience
this real professional working environment. In the whole process of completing this
topic, I have applied my knowledge studying at Foreign Trade University, as well as
conducting research, analyzing the organization and accounting process at SG
Sagawa Vietnam Co., LTD.
I would like to express my sincere gratitude to my internship faculty PhD.
Dang Thi Huyen Huong for providing me with detailed feedback and advice on this
report in the last one-month period. She was contributed enthusiastically to support
and instruct me to complete this report in the most perfect way.

By the way, I would also like to express my thankfulness to the Board of

Management and the employees in the Accounting Department of SG Sagawa
Vietnam Co., LTD for creating opportunities for me to participate in works at the
company, giving me an in-depth knowledge about the department duty on provide
detailed, completing this report in due time. Their guidance and co-operation helped
me to get a better understanding of the tasks performed at the organization. I have
also thoroughly enjoyed working on the internship report and hope the report is
appreciative.

Hanoi, August 2022

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 CHAPTER 1: GENERAL INTRODUCTION ABOUT
SG SAGAWA VIETNAM CO., LTD
1.1. Establishment and development of SG Sagawa Vietnam Co., LTD
GENERAL INFORMATION
Branch name: BRANCH OF SG SAGAWA VIETNAM IN HA NOI
Address: Block B (361), Hoang Quoc Viet St., Ward Nghia Do, Cau Giay
Dist., Ha Noi City
Tax code: 0313166148
Tel: (84-024) 38432088 – 38432082 – 38432083
Fax: (84-024) 38432038
Founding: 01/05/2015
Web: https://www.sagawa-vtm.com.vn/

SG Sagawa Vietnam Co., Ltd. and Sagawa Express Vietnam Co., Ltd.
(hereinafter referred to as “Sagawa Vietnam”) are Group companies of SG Holdings
Co., Ltd. in Japan.
SG Holdings Co., Ltd was established in 1957, starting business from the
delivery of the first parcel in Kyoto, Japan (Sagawa Express). Always serve each of
their customers with dedication and sincerity. The spirit of “Hikyaku” (spirit of
Express Messenger delivery) is the foundation of their business performance. Sagawa
Vietnam always strives non-stop with the goal of providing customers with dynamic
and innovative logistics solutions in all fields to contribute to optimizing customers'
problems through the following services: Domestic and international transportation
of goods by air, sea, and road; Warehousing services (bonded warehouses, CFS
warehouses, general warehouses); Domestic and international express delivery
services; Cargo clearance & customs declaration services; Project relocation &
deployment service (3PL).
SG Sagawa Vietnam, as the only company among the leading foreign
companies in Vietnam that has a general license for comprehensive logistics services:
provides a comprehensive logistics service with Japanese quality, which Customers

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can count on.
1.2. Main services of SG Sagawa Vietnam Co., LTD
1.2.1. Air freight service:
At SG Sagawa Vietnam, they not only provide export cargo transportation
services to countries around the world but also transport imported goods from other
countries to Vietnam via air. They provide air freight services to meet Customers’
wide range of needs including direct flights and transit.

1.2.2. Ocean freight service:

At SG Sagawa Vietnam, they provide transportation services for import and
export goods by sea at the main ports of Vietnam (Hai Phong port, Ho Chi Minh
port, Da Nang port). Company delivery not only transport containers, LCL, but also
specific containers.

1.2.3. Road transportation service (Trucking):

On-time – Reliable – Right Quality
All of SG Sagawa Vietnam trucks are GPS-enabled and managed by state-of-
the-art transport management systems
All drivers receive safety training to drive with care, minimizing chances of
goods damage
Dedicated personnel to monitoring trucks and respond promptly to your
enquiries
Pricing is clearly communicated to customer without hidden charges.
For North-South long distance, chartered, chilled and frozen trucks.
Company’s fleet of cold trucks have two compartments: Chilled (2 to 10℃) and
Frozen (-18℃ to -25℃). Each truck is equipped with Log-tag to monitor temperature
on-the-go, ensure Customers’ perishables get to the right place in the best quality.
With the knowledge gained from Sagawa Japan, at SG Sagawa Vietnam, they
provide domestic trucking services (from North-South transport to inner-city
transport), cross-country road transport (Vietnam to Thailand, Laos, Cambodia).

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 1.2.4. Cargo clearance & customs declaration services (customs
procedures):
In the country with complicated customs clearance procedures like Vietnam,
SG Sagawa Vietnam, with inherent experience, will act on behalf of their customers
to carry out customs clearance procedures for import and export goods quickly and
accurately.
1.2.5. Domestic and international express delivery services

Figure 1.1. Domestic delivery process

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 Figure 1.2. International delivery process

(Source: https://www.sagawa-vtm.com.vn/)

Door to Door Delivery Service between Vietnam & Japan: SGX – Company’s
international courier service is for Customers who trying to expand their E-
Commerce sales to Japan, looking for a faster way while avoiding high costs. With
Company’s extensive experience in Vietnam and leveraging on complete delivery
network in Japan, SGX can deliver Customers’ goods quickly, safely and effectively.
From point of origin to the doorstep of the recipient, Customers’ goods are fully
handled by Company Group’s network. With just one tracking number, they will
have full visibility of Customers’ goods location in Japan. Furthermore, for bulky
goods from Vietnam to Japan, SGX will calculate according to the volumetric weight
formula (Length x Width x Height) cm/6000, more competitive rate than other
companies.

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 1.2.6. Warehousing service:
With the knowledge and technology gained from Sagawa Global Logistics,
SG Sagawa Vietnam provides Bonded Warehouse, CFS, General Warehouse and
Cool/Frozen Warehouse services in Ho Chi Minh City, Dong Nai and Hanoi. With
combined space over 50.000m2, the company can solve your problems in finding
space and value-added services. Customers can focus on growing their business
without worrying about warehouse.
SG Sagawa Vietnam warehouse standards:
Near seaports (Hai Phong, Cat Lai, Cai Mep), airports (Noi Bai, Tan Son Nhat)
and cities (Hanoi, Ho Chi Minh, Binh Duong, Dong Nai)
C-TPAT compliant, regular risk checks with full CCTV, motion sensors and
24/7 security
Warehouse management system for full visibility and traceability of goods
Various value-added services such as labeling, scanning, box packing,
palletizing, quality checking, repacking, assembly and more
Can stack a variety of goods and garments on Hanger (GOH)
No minimum space require, company can handle from one carton to hundreds
of pallets! SG Sagawa Vietnam also provides one-stop logistics services from
international freight forwarding, customs clearance to domestic delivery by hire truck
and express delivery service.
1.2.7. Removal services:
Company provides careful, safe and accurate moving services for customers
who need to move house within Vietnam, or from Vietnam to Japan or other
countries. In order to avoid causing problems for customers, well-trained and
professional delivery staff will pay attention to every small item from a plate of food
to luxury furniture.
With the motto "Quality is first”, we have dedicated and experienced Japanese staff
who will clearly classify and pack in accordance with the characteristics of each item.

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1.3. Organizational structure, functions and their tasks

Figure 1.3. Organization function of SG Sagawa Vietnam Co., LTD

Figure 1.4. Organization chart of SG Sagawa Vietnam Co., LTD

(Source: Company’s Human Resources Department)

1.3.1. Hanoi Branch Manager and BOD:

Responsible for virtually all functions of Hanoi branch, including growing
location's customer base and elevating the community's perception of the company's
brand. Branch managers are also responsible for delegating tasks to skilled staff
(workers) and for their successes and failures. In fact, the branch manager is
responsible for the success or failure of the branch they manage. Excellent
multitasking and organization skills are necessary to accomplish tasks in a timely and
efficient manner, not only for the branch manager but also for the people they
manage. The branch manager also oversees the performance of other employees.
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Because their responsibilities include developing and maintaining good relationships
with customers and employees, branch managers should possess strong sales, people
management, and customer service skills. Other attributes required of a branch
manager are diligence, strong analytical skills, and the ability to prioritize, multitask,
and focus on detail. Branch managers are expected to be proactive
about networking to bring in new business and increase revenue.
1.3.2. Human resources and Admin Department:
Responsible for recruiting candidates, hiring right employees, processing the
payroll, conducting disciplinary actions, updating policies, maintaining employee
records, also conducting benefit analysis. Beside operational responsibilities, HR
exists to help employee develop, such as: providing career growth, offering
continuing education, training and supporting managers, supporting health and
wellness of every staff. The human resources department heavily contributes to a
company’s culture. If HR genuinely cares about the well-being of employees, the
culture will be one of openness and growth.
1.3.3. IT Department:
Responsible for installing new software or hardware, researching and
producing hardware and supplies, participating in IT inventory asset management
(laptop, lines…), troubleshooting network issues, process documents… for every
company staff.
1.3.4. Services Departments:
Such as: Air freight Department, Ocean freight Department, Customs
clearance Department, Trucking Department, Domestic delivery Department,
Removal Department, Warehouse Department, Sales Department… They are
SG Sagawa Vietnam Co., LTD’s soul. Each department responsible for every step in
one service of the company, from pricing, to working with customers, making
contracts, double checking, receiving items, to shipping, making invoice, receiving
money, stock-counting… Each Department has Supervisor, Team leader… to guide
every staff to do the right job in the right time.
1.4. SG Sagawa Vietnam Co., LTD accounting department’s structure:
Like every other Logistics business, SG Sagawa Vietnam Co., LTD’s

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Accounting Department also has the following components:

Figure 1.5. Accounting Department chart of SG Sagawa Vietnam Co., LTD

(Source: Company’s Human Resources Department)

SG Sagawa Vietnam Co., LTD always comply with the accounting segregation
basis. Mrs. Huong, company’s chief accountant is responsible for making the
company’s not public financial statements. Other departments gather their invoices
for expenses or documents about credit sales of customers and give them all to
payable accounting section. Then payable accounting staff record all of that
transaction up to company’s system. After that, they send all the numbers to other
departments to double check again, to ensure accountant and FAST system do the
right job. Next is the task of accounting liabilities staff. They have to offset all the
debt. Tax accountants are responsible for calculating tax payable of company. They
have to follow all of tax regulations, standard. The treasurer is Mrs. Lien, her task is
checking all the document and keep company’s cash. All accountants have to raise
number for the financial statements, and Mrs. Bac, the team leader in tax accounting
section are responsible for management accounting.

1.5. Performance of SG Sagawa Vietnam Co., LTD

SG Sagawa Vietnam Co., LTD does not public their Financial Statements,
only internally. Because of the confidentiality requirements, I can't reveal their
Financial Statements. Their Revenue increased over the years, in which revenue from
business activities in 2020 increased by VND 7.455.593.090 compared to 2019, an
increase rate of 10%. Although the pandemic affects majority of business in Vietnam,
SG Sagawa Vietnam Co., LTD’s profit in 2021 still increased compared to 2020 is

9
132.779.678 VND, the growth rate of profit after tax is 22.2%. This result from the
operation of export and import, also domestic delivery still available in pandemic,
which are necessary, essential and emergency. Because of that, SG Sagawa Vietnam
Co., LTD still can operate as usual, were not delayed.

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CHAPTER 2: ACCOUNTING FOR TRADE RECEIVABLES
AT SG SAGAWA VIETNAM CO., LTD
2.1. Credit sales policy of SG Sagawa Vietnam Co., LTD

With the rapidly growing economy, businesses are increasingly expanding their
scale and scope in many different fields. However, it is inevitable that buyers are not
eligible to pay. If you do not sell goods on credit, you will lose the opportunity to sell,
and therefore, lose profits. If the sale of goods on credit is too much, the cost of
receivables will increase, risk of bad debts will arise. Therefore, the risk of not being
able to collect debts also increases. That’s why there must be a credit policy of
businesses.
For this policy, SG Sagawa Vietnam Co., LTD allows buyers to make credit
purchase of Services within the agreed time period because the buyer does not always
have enough money to pay the amount of money to buy Logistics services in
impossible cases. The reality in the current business market has shown that allowing
businesses to sell on credit is considered as a measure to accelerate the consumption
of products in business, which help more and more customers be able to buy services
of SG Sagawa Vietnam Co., LTD. Enterprises, when using this credit policy in
corporate financial management, have brought many benefits to businesses, as it
seems to have increased revenue and attracted many sources of services consumption.
Credit sales is a form of promotion, if you sell goods on credit for a long time, revenue
will increase because it attracts many customers, but costs also increase. Thus,
receivables management involves a trade-off between profit and risk.
For the credit policy of SG Sagawa Vietnam Co., LTD, the first criterion is the
standard of creditworthiness of customers (credit standards, such as: debt ratio, ratio
of payment, ratio of ability to pay interest ...), which is accepted by enterprises to sell
services on credit. The customers must be able to repay all the fee charged. SG
Sagawa had to assess customers’ financial situation, check their financial statements
to see if they were complying the Going concern basis or not. A credit policy has
provisions that determine the length or duration of the credit sale (credit term) and

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the discount rate that applies if the business allows buyers collectively known as
customers, to pay sooner in allowable credit sale time. SG Sagawa Vietnam Co., LTD
organizes credit terms like 2/10 net 30 means that the customer is entitled to a 2%
discount if payment is made within 10 days from the date the invoice is issued. If the
discount is not taken, the customer is entitled to defer payment within 30 days from
the date of invoice issuance.
The credit policy is not only related to the credit standard as discussed, but also
to the credit terms. Changes to the terms of the sale on credit related to changes in the
term of the credit and changes in the discount rate. SG Sagawa Vietnam Co., LTD
also sets out the receivables collection policies, such as: send letters, call reminders,
transfer debt collection to intermediary collection units (factoring), initiate lawsuits,
etc., which depend on the seriousness of the situation that the customer cannot pay
the fee.

2.2. Overall trade receivables status at SG Sagawa Vietnam Co., LTD

As a typical Logistics company, SG Sagawa Vietnam Co., LTD’s Trade

receivables primarily relates to Customers of company’s services: Air freight, Ocean
freight, Customs clearance, Trucking, Domestic delivery, Removal, Warehouse
service, also from sales, or maybe from disposal of PPE. In other words, the
Receivables here is received from the Sale of Logistics Services to the Company’s
Customer. As we can see in the table, receivables from customer accounts for 90%
of trade receivables of company. Besides, company debts management and recovery
are quite good, the accounting process is efficient.
Most of the company's customers are businesses. Production companies
which want to have more space for Inventories will buy Warehousing service of SG
Sagawa Vietnam Co., LTD. Even supermarkets like Aeon Mall also buy Domestic
delivery Service of SG Sagawa for shipping goods to its customers’ house.
Individuals can buy Removal service to save time move furniture to their new house.
When Customers want to deliver confidential correspondence, SG Sagawa can
complete this hard task immediately.

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 Customers can find SG Sagawa Vietnam Co., LTD’s services all over
Vietnam. Company also has hotlines, website, retailers… very easy to buy services
and make long-term contract.
2.2. Procedures and regulations:

2.2.1 Set a credit limit and payment terms:

Sales department is responsible for monitoring, providing information and
approval reduction for new credit limit when are available or adjusting Customers’
credit limit when existing customers change buying demand. The contents of the
proposals submitted for the approval must ensure full contents: credit limit, payment
term and application time. These documents must be finalized for approval prior to
submission of a contract. Accounting department is responsible for inspecting and
keeping all contracts and written approvals related to the setting of credit limits and
corresponding payment terms.
2.2.2. Credit limit and payment terms management:
Accounting department coordinates with the sales department in updating
customers' credit information on the accounting system and FAST system after the
documents on credit lines have been approved. All liabilities are managed on basis of
the approved payment term and credit line.

Figure 2.1 FAST system of SG Sagawa Vietnam Co., LTD

(Source: Company’s system)

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 The service will be discontinued when the Credit limit exceeded or
Receivables 15 days overdue. A suspended purchase order is only allowed when
Customer makes payment of an amount at least equal to the amount exceeding the
credit limit, requests for an approved (temporary) increase of credit limit, or
Authorized management level to authorize order execution (proof of approval is
stored for internal monitoring and audit purposes).

2.2.3. Recover debts:

The order of actions to be done with overdue debts, firstly when:
Time overdue less than 15 days: The debt accountant is responsible for
informing the sales department of the overdue debt that has not been paid from
customers through weekly reports on the debt age of each customer. The Services
Department liaises with the customer to expedite the payment of overdue debts as
soon as possible.
And for the overdue time for 15 days: The accounting department is
responsible for notifying the sales department, the warehouse keeper, and the
specialized personnel to suspend the delivery service for customers’ products that are
delayed. In special cases, after considering the cause of the payment delay, the
Services Department may apply for management's approval to continue providing the
company’s services. Or else, the service only available when the customers have
completed all the overdue debt. The accounting department is responsible for drafting
a request for payment of overdue debts (first time) to submit to the Board of Directors
for approval, then transfer to the Services Department to directly send it to the
customers. Services Department work directly with the Customers, which is
responsible for monitoring and urging customers to pay long - term debts.
Time overdue for 25 days: The accounting department is responsible for
calculating late payment fines based on the contractual terms and drafting a written
request to pay overdue debts (second time), including the content of interest and
penalty. Submitting to the Board of Directors for approval, then transfer to the
Services Department to send directly to customers. After 15 days from the day the
document being sent, if the customer has no response to the Accounting Department,
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the Services Department will be responsible for reviewing and reporting on the
customer's solvency (to present The BODs) consider the lawsuit to collect customer
debt, the lawsuit depends on legal costs and agreements with Services staff. In case
the lawsuit does not proceed, the Services Department is responsible for working with
the customer to recover the Services related to the debt that the customer still holds
(if any) to minimize the loss remain. The recall of producing Services must be
recorded in writing signed by both parties.
If the overdue amount is determined to be irrecoverable after all legal
procedures have been taken, as well as Services are withdrawn from customers, the
Accounting Department is responsible for making provision for bad debts or write
off bad debts in accordance with the current law. This task must be notified by email
and received an agreed response from the specialized personnel of Services partner.

2.2.4. Report on periodic debt:

The Accounting Department is responsible for sending reports to the
Management board, such as: weekly report of Receivable age of each customer, the
monthly report updates all changes in Credit limit and Payment term of existing
customers. They also need to send debt reconciliation documents to customers at the
end of each month.

2.3. Risks of credit sales of SG Sagawa Vietnam Co., LTD:

As we all know, if the goods are not sold on credit, there is a possibility of losing
sales opportunities. However, if you sell too much on credit, company will lose a lot
of costs and risk of arising bad debts, the risk of not being able to recover debts also
increases. Financial problems can lead your company to increasingly large bad debts
or to the brink of bankruptcy like some US companies.
Besides, if the goods have not been collected, it also means that company
owners cannot rotate the capital to import the next shipment, leading to difficult
business development.

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 For customers who are not too familiar (new customers), company does not sell
on credit. Because selling on credit to these customers has many potential risks and
creates bad habits for customers. Sometimes, worse than leading to the loss of
customers, when customers buy too much debt, the amount owed is so high that
people are afraid to face creditors. In many cases, customers pay for many times and
they decide not to pay half.

2.3.1. Burden of bad debts

The enterprise is easily faced with the increasing burden of bad debts. The goods
and services are already in the hands of customers, the bills are increasingly out of
the payment due date, the amount of debt is getting bigger and bigger... According to
the 2015 statistics of the Newsweek, the credit sales activities have made the firms
stand out logistics in the world and the burden of bad debts is increasing day by day.
In 2016 alone, the amount of money customers buy on credit of large logistics groups
has reached 35 billion USD. In 2004, this number doubled.

2.3.2. High risk of bankruptcy

When losing financial advantages, enterprises are prone to crisis, even
bankruptcy. Lack of investment capital for new projects and production expansion,
enterprises not only failed to develop but were also pushed back.

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2.4. Credit customers checking of SG Sagawa Vietnam Co., LTD:

Figure 2.2. Outstanding update (aged receivables) of SG Sagawa Vietnam Co.,

LTD

(Source: Company’s working papers)

This table show the way SG Sagawa Vietnam Co., LTD check on the credit
customers. They classify customers by the code, then record accurately the issued and
due date to calculate total late days. Company accountants also state clearly the
number of the fee charged that customer has not pay yet. They do this offsetting table
every 2 weeks to make sure they detect the bad-debt timely and make the appropriate
provision.
2.5. Bad-debt and provision making of SG Sagawa Vietnam Co., LTD:

SG Sagawa Vietnam Co., LTD must estimate the possible loss or overdue aged
of debts and make a provision for each bad debt, together with evidences to prove the
bad debts.
For overdue receivables , the level of provision is as follows:
30% of value for overdue receivables from over 6 months to less than 1 year.
50% of value for receivables that are overdue from 1 year to less than 2 years.
70% of value for receivables that are overdue from 2 years to less than 3 years.

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 100% of value for receivables from 3 years or more.
For receivable debts which are not yet due for payment but the customers’
organization has fallen into bankruptcy or is undergoing dissolution procedures: If
the debtor is missing, absconding, is being prosecuted, detained or tried by law
enforcement agencies, or is serving a sentence, or has died ... then the enterprise will
expect an irrecoverable loss to make a provision. After making provision for each bad
debt, the enterprise shall sum up the entire provision for debts in a detailed list to
serve as a basis for accounting into the enterprise's management expenses.

2.6. Receivable status of SG Sagawa Vietnam Co., LTD in 2020-2021:

In 2020, because of the pandemic, many customers choose to buy services of

SG Sagawa Vietnam Co., LTD in credit. This result from the unexpected situation, a
lot of business have to get through the hardest time in their business life, some even
faced with bankruptcy. So that SG Sagawa Vietnam Co., LTD had made the credit
sales policy easing, sympathy for businesses that are struggling. But company can not
take more risks, they still check carefully on the credit customers and encourage them
to pay on time to maintain company’s profit. That is why number of receivables in
2020 is larger than in 2021 and 2022.
2.7. Process of journalizing Trade Receivables at SG Sagawa Vietnam Co.,
LTD:

Firstly, the Services Department will make a Detailed list of selling services
(by individual and organization customer), including Date of service used, Bill
number, delivery Destination, Weight of goods, Service used, especially Details of
charges (Main fee, COD fee, and Total amount) (Appendix 2)
After that, the Accounting Department will issue a Financial Invoice according
to the balance in the above Service sales list, then send it directly to the customer.
(Appendix 3, 4)
Next is the time for Accounting Department journalizing all the transactions
with Customers. In SG Sagawa Vietnam Co., LTD, accountant use account 131
“Receivables from customers” to record all the Service fee received from customers.

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Then they record to the reciprocal account 511 “Sales Revenue” of the company.
(Appendix 5, 6, 7)
Regarding account 511, the details include freight revenue of 551131 and
domestic supply revenue of 511132. These costs include local charges such as: Seal
cost, THC container handling fee, telex delivery fee and bill document fee).

Let check some transactions of SG Sagawa Vietnam Co., LTD and find out
how they journalize them.
(1) On Aug 8th, 2022, Customer Logimed Co want to buy the Warehousing
service, and the total charged fee is VND 550.000.000.
Cr 51131 VND 550.000.000
Cr 33311 VND 550.000.000
Dr 131 VND 550.000.000
(2) When customer paid us their money at bank.
Dr 112 VND 550.000.000
Cr 131 VND 550.000.000

2.8. Bookkeeping system of SG Sagawa Vietnam Co., LTD:

2.8.1. Ledger:
A general accounting book for recording economic and financial transactions
arising in the accounting year according to the accounting accounts specified in the
accounting account system applicable to enterprises. Each account is opened or a
consecutive number of pages on the ledger for recording in an accounting year.

2.8.2. General journal:

Is a general accounting book used to record economic and financial tasks
arising in chronological order. In addition, it is reflected according to the cash account
reciprocal relationship. The daily aggregate numbers recorded in this book are
reconciled with sales invoices. At the end of the month, the detailed summaries of
these books will be recorded in the account ledger.

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 2.8.3. Cash collection journal:
Is a special journal used to record cash collection transactions of a business.
This form of book is opened separately for cash collection, collection via bank, for
each currency (Vietnam Dong, foreign currency) or for each collection place. The
usual cash collection operations mainly include cash collection from cash sales and
collection of debt from customers.

2.8.4. Detailed book of accounts receivable:

Is a type of accounting book opened to track receivables from customers, or in
other words, track detailed objects of account 131 - Customers Receivables.

2.9. Evaluation of Trade Receivables accounting at SG Sagawa Vietnam Co.,

LTD

After an internship at SG Sagawa Vietnam Co., LTD, I have gained a lot of

knowledge about practical accounting. With the dedicated guidance in the accounting
department, I have understood and learned more about the accounting work at the
Company in general and the accounting of Trade Receivables in particular.

2.9.1. Strengths
Firstly, the organization of the accounting apparatus:
The Company has organized and rearranged the accounting apparatus to suit
the conditions of the Company. Accountants have solid professional qualifications
and are constantly equipped with new knowledge, the assignment between
Accounting Departments is consistent with the qualifications of accountants,
ensuring coordination to achieve efficiency. So that the organization of accounting
work is carried out in a relatively strict and scientific manner. The Company's
accounting apparatus has always proactively applied timely and well implemented
the new accounting regime, the accounting system, and the bookkeeping system are
applied flexibly to suit the operating conditions of the company.
Secondly, Trade Receivables accounting method:

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 Accounting system: the system that the Company uses is FAST. With the high-
tech system experienced in Japanese quality, and skill-full trained staff, all the
Services transaction of SG Sagawa Vietnam Co., LTD have been recorded in time
and accurately. Company has so many Services, there is many different types of
Customers. This accounting systems and the clearly separation of accounting in each
Service Departments help the company a lot.
With the advantage of closely combining the recording of economic
transactions in chronological order with the systematization of transactions according
to economic content, widely combining general accounting with detailed accounting
by the requirements of the journal and voucher format has enabled the preparation of
the end-of-year financial statements to meet the requirements of the Company, the
Ministry of Finance and other State authorities.
Accounting method: Since the Company's main business activities are
Logistics, producing Services trading, transportation, the import, and export of goods
take place regularly, so the Company applies the regular declaration method is
reasonable.
Used accounts: the accounting accounts used to account for goods are by the
accounting system prescribed by the Ministry of Finance.
Accounting order: the accountant has performed the accounting of purchases
and sales according to the actual order of arising operations.
Accounting books: The Company has applied a relatively complete system of
accounting books according to the forms prescribed by the Ministry of Finance,
having flexibility in designing the book structure to suit the actual conditions of the
Company. The Company still provides all necessary accounting information for
management.

2.9.2. Weaknesses
In the accounting for purchases and sales of goods in particular and accounting
in general at the Company, besides the advantages, certain shortcomings need to be
overcome, improved, and perfected to meet the requirements of management, thereby
improving the operational efficiency of the Company.

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 First, debt tracking
Tracking the ability to pay debts from customers is one of the tasks that the
Company must pay great attention to. Although company has list out all the
Customers. The annual unit has not made provision for bad debts to compensate for
the actual losses caused by the failure to recover the debts. Although related
department in the company has worked hard to urge the customer to pay on time,
there are still overdue payment orders because customers have financial difficulties.
Second, revenue accounting
The Company does not open a detailed tracking book for each type of good,
so it is difficult to manage revenue and determine the business results of each item.
Third, the specialization of accounting work
At the Company, each accountant sometimes has to concurrently take on the
specialized functions of accounting, which can lead to overlapping in the work of
accountants, the possibility of fraud, affecting the principle of accounting.,
transparency in financial affairs.

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 CHAPTER 3. RECOMMENDATIONS FOR
ACCOUNTING FOR TRADE RECEIVABLES
AT SG SAGAWA VIETNAM CO., LTD
3.1. Open a detailed tracking book for each type of Service

There are many different Logistics Services at Sagawa Vietnam Co., LTD,
also many different offices, warehouse in Vietnam. So do this to facilitate revenue
management and determine the business results of each item.

3.2. Reduce exchange rate difference

Company must keep detailed records of receivables from customers in each

type of currency. For receivables in foreign currencies, the following principles shall
be applied:
When receivables arise from customers (Debit side of account 131),
accountants must convert them into Vietnam Dong at the actual exchange rate at the
time of arising (which is the buying rate of the commercial bank). trade where the
paying customer is designated). Particularly in case of pre-receipt from the buyer,
when the conditions for revenue recognition are met, the Debit of account 131 shall
apply the actual book-keeping exchange rate for the amount received in advance.
When collecting receivables from customers (the party has account 131), the
accountant must convert them into Vietnam Dong at the actual book-keeping
exchange rate specifically for each debtor (In case the debtor has many transactions).
then the actual nominal exchange rate is determined as the moving average rate of
transactions of that debtor). Particularly in case there is a transaction to receive money
in advance from the buyer, the party with account 131 shall apply the actual exchange
rate (which is the rate recorded on the debit side of the money account) at the time of
advance receipt.
Company must re-evaluate receivables from customers denominated in
foreign currencies at all times of preparing financial statements in accordance with
law. Actual exchange rate when re-evaluating receivables from customers is the

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foreign currency buying rate of commercial banks where enterprises designate
customers to pay at the time of preparing financial statements. In case an enterprise
has many receivables and transacts at many banks, it is allowed to choose the buying
rate of one of the commercial banks where the enterprise regularly conducts
transactions. Units in the group are allowed to apply the same exchange rate set by
the Parent Company (must be close to the actual exchange rate) to re-evaluate the
receivables of customers with foreign currency origin arising from transactions
within the group.

3.3. Check the Customer list regularly:

In a logistics company as Sagawa Vietnam Co., LTD, Customer-list checking

is the most important activity to maintain the company performance. Review
customer list every month, even every week can help company find out which
customer is having financial problem to timely response to aged customers, make
appropriate provision.
In order to shorten the time of collection of sales, the administrator must
closely monitor and supervise the receivables, analyze and evaluate the actual status
of the debt, on that basis, consider the effectiveness of the receivables collect policy.
The two basic methods used are age analysis and average collection period. The
average time of credits collecting shows how many days in average to collect credit
sale receivables is calculated by the formula:
Average collection period = Average receivables / Average daily sales
Calculate the average collection period is a simple indicator to monitor
receivables. However, this indicator also has limitations to note that: average
receivables are only determined by the average of receivables at the beginning and
end of the period, while receivables fluctuate from day to day, the differences will be
higher in seasonal production enterprises. In holidays there will be more customers
want to buy services.

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 Age analysis of receivables: this method, receivables from customers at the
end of the period are classified into age groups and calculate the proportion of each
group in the total debt at the end of the period. The age of the debt is calculated from
the time the debt is incurred to the time of analysis, from which the analysis
determines the quality of the receivables.

3.4. Other solutions:

Must comply with current financial and accounting regimes, and relevant State
legal documents, and at the same time aim to integrate with common practices and
international accounting standards. Must be consistent with the characteristics of the
Company's own production and business organization. The creative application of the
financial accounting system to the accounting for Trade Receivables will improve the
efficiency of the accounting work, and at the same time not contrary to the general
regulations. The improvement of accounting work must be set in the relationship
between costs and benefits achieved, because the purpose of improvement is to
improve the efficiency of the accounting for Trade Receivables, contributing to the
work. The general accounting operation of the company is favorable.

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 CONCLUSION
Enterprises operating in Logistics industry always face many challenges.
Vietnam’s logistics industry has been boosted by the country’s booming GDP, rising
manufacturing, and e-commerce sectors. In addition, the rapid adoption of e-
commerce by the country’s young demographic has increased the demand for
expansion in logistic services. Vietnam aims to develop itself as an export-driven
economy.

Sagawa Vietnam Co., LTD has taken all advantage of this condition to be the
leading Logistics enterprise in Vietnam. Customer is the most importance factor to a
Logistics company, so that Accounting for Trade Receivables is irreplaceable.
Thanks to experienced BOD, BOM have made excellent strategy, appropriate budget,
target, motivated employees. Company needs to develop strengths and improve
weaknesses to conquer the peak.

Having an internship in Accounting Department is my great honor also great

opportunity to have more practical experiences, develop my working skills. During
the research process, due to lime limitation and document shortage, a few
shortcomings appeared. The fact-finding process really helped me gain useful
practical lessons and knowledge about accounting in general and Trade Receivables
in particular. Which helping me have more experiences in professional working
environment and be more ready for my future career.

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 REFERENCES
1. MCs Tran Thi Kim Anh, 2014, Accounting principal book,
Statistical publisher.
2. Ministry of Finance, Circular 133/2016/TT-BTC Guiding the
accounting regime for small and medium enterprises, issued on August 26,
2016.
3. Vietnam Briefing, 08/08/2022, Vietnam’s Logistics Industry: How
Vietnam’s Expanding Economy is Boosting Growth, https://www.vietnam-
briefing.com/news/vietnams-logistics-industry-how-vietnams-expanding-
economy-boosting-growth.html/
4. Website of Sagawa Vietnam Co., LTD, 08/08/2022,
https://www.sagawa-vtm.com.vn/

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 APPENDIX
Appendix 1. International delivery quote of SG Sagawa Vietnam Co., LTD

Appendix 2. Detailed list of selling Services of SG Sagawa Vietnam Co., LTD

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Appendix 3. Financial Invoice (1) of selling services of SG Sagawa Vietnam Co.,
LTD

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Appendix 4. Financial Invoice (2) of selling services of SG Sagawa Vietnam Co.,
LTD

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Appendix 5. Account 131 of SG Sagawa Vietnam Co., LTD

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Appendix 6. Receivable ledger of SG Sagawa Vietnam Co., LTD

Appendix 7. Account 511 of SG Sagawa Vietnam Co., LTD

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