The study: Organizing the cost management accounting informat ion system in Garment Enterprises in Vietnam

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The research objectives: Cost control accounting information system is a useful tool to help enterprise managers to control costs. The research objective of the thesis is to study the status that how has the cost management a ccounting information system been organized in Garment Enterprises in Vietnam? Thence the proposal of solutions to organizing the cost control accounting system in enterprises will be made in order to exploit the benefits of this system for the enterprise management.

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Nội dung Text: The study: Organizing the cost management accounting informat ion system in Garment Enterprises in Vietnam

1 2 PERMEABLE input data, process and provide the cost information is limited. With a cost control accounting information system as currently, garment enterprises are unlikely to stand firmly in the competitive environment in the region and the 1. Background world. The organization of cost control accounting information system which Textile and garment is considered as one of the main industries in serves the demand of enterprise management in the best manner is always the Vietnam in the period of accelerated industrialization and modernization complicated job requiring the efforts such as the need for cost control and when textile and garment enterprises play the main role. According to the accounting information, the coordination between departments in enterprises, Vietnam Association of Textile and Garment, the export turnover of textile the organization of accounting apparatus and allocation of cost control and garment and fibers of all kinds in 2012 reached over 17.2 billion USD accounting work to serve best the demand of cost information for the increased by 8.5% in comparison with 2011 and up to 2015, the export enterprise management at all level in enterprises. turnover is aimed at reaching 19 billion USD over 2,500,000 workers and up Therefore, the study of the characteristics and contents of the cost to 2020 reaching 25-27 billion USD. With the important and considerable management accounting information system in order to organize it in role of textile and garment industry for the national economy, it is very Vietnamese garment enterprises are very urgent in the current stage. essential to ensure the sustainable growth for the textile and garment industry Originated from the reasons stated above, the research thesis entitled in the changing context of international economy, especially when the world "Organizing the cost management accounting information system in Garment is falling into crisis and economic downturn as currently. Enterprises in Vietnam" Garment enterprises in Vietnam still mainly produce according to 2. The research objectives specifications and designs provided by customers and use materials specified Cost control accounting information system is a useful tool to help by the purchasers in many cases. In despite of great export turnover, the enterprise managers to control costs. The research objective of the thesis is to actual revenue from these activities is very low, even negative profit in some study the status that how has the cost management accounting information enterprise. Besides, ever since joining the WTO, the textile and garment system been organized in Garment Enterprises in Vietnam? Thence the industry has been facing significant challenges and competing on par with the proposal of solutions to organizing the cost control accounting system in powerful export countries such as China, India (competing for prices) and enterprises will be made in order to exploit the benefits of this system for the South Korea, Japan (competing for designs and patterns). This competitive enterprise management. pressure is forcing Vietnamese garment enterprises to set up the development strategy and good management of cost in order to reduce the production costs 3. Research Questions and invest in machines to improve the the product quality and business To achieve the research objectives of the Thesis, Thesis needs to analyze efficiency. In this context, the demand for accounting management the issues relating to accounting information system in garment enterprise in information is great, especially for the execution of strategic objectives of order to answer the following questions: enterprises; it includes the provision and analysis of cost information so that 1. What is the demand for management accounting information in managers can make the investment decision and the provision of information general and the manager’s demand for cost control accounting information in assisting the production at low cost, ensuring the product quality and timely Vietnamese Garment Enterprise and their satisfaction level with cost delivery of goods. However, the cost accounting system in enterprises in accounting information provided currently like? general and garment enterprises in particular only focuses on establishing the 2. What are the factors that affect this system in garment enterprises? financial and accounting information to serve the preparation of the financial statements and pays less attention to provide information for the enterprise 3. What level is the organization of cost control accounting information management. system executed? Currently, the organization of the accounting information system for cost 4. From the results of assessing the reality of organizing the cost control in garment enterprise is encountering a lot of difficulties; the management accounting information system in garment enterprises, what coordination between departments and systems in enterprise to collect the solutions are given to organize the system in garment enterprise in order to
3 4 exploit the benefits of information system in respect of the enterprise throughout the solution for estimate information system to cost control management? information system and making business decisions. Then, the solutions for 4. The research objects and research scope: cost control accounting information system should be proposed specifically so that Garment enterprises could apply them into the practice of controlling 4.1. The research objects: costs. The Thesis studies on the cost management accounting information 6. The structure of thesis system in garment enterprises in Vietnam. In addition to the foreword and conclusion, the Thesis is structured into 4.2. The research scope: four chapters: Currently, the small-scale garment enterprises are accounting for less Chapter 1: An overview of the research situation and research than 20% of garment enterprises in Vietnam and the cost management methodology accounting information system is also very difficult to implement in small enterprises due to the demand of financial investment and human resources. Chapter 2: Literature review on the cost management accounting Therefore, the scope of research is conducted in the large and medium size information system in manufacturing enterprises garment enterprises. Chapter 3: The reality of organizing the cost management accounting 5. The contributions of the Thesis and recommendations for the further information system in Garment enterprises in Vietnam. researches Chapter 4: Solutions to organizing the cost management accounting The thesis has made both theoretical and actual contribution. information system in Garment enterprises in Vietnam. Theoretically, based on the theory of enterprise management information system, the thesis has studied synchronously three contents of cost control CHAPTER 1 accounting information system which are cost estimating information system, AN OVERVIEW OF THE RESEARCH SITUATION AND executed cost information system and cost control information system in RESEARCH METHODOLOGY order to provide an intimate relationship of the past, present and future information in controlling costs. Thence, confirming the role of cost control accounting information system in making decision by managers to answer the 1.1. An overview of international researches question whether the relationship between the cost management accounting The thesis presents the researches by different authors involved in information system and the efficiency of the enterprise management exists or organizing the cost control accounting information system. According to not? The research was carried out in Vietnamese garment enterprises but it Laudon JP (2003), Accounting information system are defined as a whole was completely applied to other manufacturing industries as tobacco, cement, consisting people, equipment (hardware), computer programs (software), beer etc. stored data and methods of data organization, network connection and the Practically, the thesis pointed out a number of issues faced by Garment process of setting up information on the human resource allocation and use, enterprises which was how to achieve the objectives of controlling cost, business situation to users. Chang (2001) confirmed that the accounting reducing product price and improving the competitive force during the information system decided the efficiency of organizing the enterprise integration. The thesis contributed to clarify the necessity that garment management, particularly in the global competitive environment. The enterprise had to know how to calculate and classify business costs research of "The role of accounting information in the decision-making accurately and the cost information is required not only at the scope of entire processes in the dairy enterprises in Germany" by Eva, Heidhues & Chris enterprise but at each stage, department and individuals participating in the Patel (2008) suggested that the development of the cost management theory production process so that the costs could be controlled. The thesis pointed with the support of information technology would be the best tool for the out that in order to well organize the cost control accounting information enterprise management. The research showed that enterprise managers system; the solutions for enterprises should be uniform and consistent needed to be convinced about the effect of cost accounting information
5 6 system in decision-making process. However, the research has not clarified the system. Omar AAJawabreh’s Research (2012), "The role of accounting the relationship between the demand of enterprise managers and cost information system in the process of planning, controlling and making management accounting information. This issue needs to be studied further decision in Jodhpur hotels" showed the relationship between accounting because it is the basis for setting up the cost management accounting information system with the process of making decisions in the hotel information system. management. The research had shown the difficulties of hotels in Jodhpur, The authors Barfield, Raiborn & Kinney (1998) in Cost Accounting India when applying the cost management accounting information system. document: Traditions and Innovations believed that the cost management The costs of the system operation was so high; the facilities for the system accounting information system would be in favor of providing information application had not been met such as computer software and especially, the for internal management. The function of cost accounting was to analyze the managers had not really been convinced of cost management accounting cost situation and profitability of projects, process or product in order to methods. improve the business performance. Accordingly, cost management Thus, the management accounting in general and cost management accounting information system includes two steps: Step 1: collecting accounting information system in particular is a very effective management information on costs through the classification based on the cost nature such tool and has been studied at different angles by several authors. Based on the as costs of raw materials and labor costs etc. Step 2: Trace costs back to their researches in the world, the thesis inherited arguments about the nature of sources and reallocate costs into one or several objects such as activities, cost accounting, cost management accounting information system and its departments, customers or products. Through these two steps managers can relationship with the structure of an organization, thence inherited and be informed fully and grasp accurately the object of costs and know developed a cost management accounting information system in accordance specifically what department and stage makes profit or loss. However, the with the specific conditions in Vietnam. To build up a cost management research did not mention the aspect of organizing the cost management accounting information system which can be applied effectively into accounting information system, for example how to set up a database, what enterprises in specific fields, it is necessary to make further researches on the the methods of establishing information and the system of reports to provide features of production organization of each unit, the demand for cost the cost information are. management accounting information in each specific field and the ability to The research by Monden, Y. and Hamada, K. (1991) in Japanese apply the management accounting methods of enterprises. Thus, it is essential companies showed that cost management accounting was increasingly to study and build up a cost management accounting information system in applied effectively and modernly. Many methods of cost management Vietnamese garment enterprises. This is the space that the author finds in the accounting were born in order to determine more accurately the cost for the researches on the cost management accounting information system in the charged objects, for example, the method of target cost, the method of world. continual improved cost which was applied effectively in Japanese 1.2. An overview of domestic researches companies. This research was suitable with the large sized manufacturing Cost management accounting in general and cost management enterprises which had advance production process such as applying the ISO accounting information system in particular was only mentioned in management standards. The application of modern cost management methods researches in Vietnam since 1995. It could be said that the domestic into Vietnamese enterprises is an issue requiring further researches in the researches from 1995 showed that the authors had studied the basic issues of context that Vietnamese enterprises are gradually being standardized and cost accounting, cost management accounting and cost management stepping in the stage of international integration. accounting information system. Researches confirmed the importance of cost The cost management accounting information system is not only studied management accounting, cost management accounting and cost management theoretically but also in some specific sectors such as construction, hotel, accounting information system in the enterprises. hospital and bank. Laudon, JP (2003) suggested that the design of cost The author Pham Van Duoc (1997) had shown the difference between management accounting information system depended on the specific Financial accounting and Management accounting, on that basis, offered characteristics of each business and individual requirements of each part in solutions of building Management accounting contents such as cost
7 8 classification, estimates, building the CPV relationship, analysis of cost enterprises in accordance with the following contents: Organizing cost fluctuations and the direction of applying these contents in Vietnamese estimating information system; organizing cost execution information enterprises. system; organizing cost information control. These are the contents that The Author Pham Van Duoc, Huynh Loi (2009) in the research "Model previous researches have not mentioned. and mechanism of operating the management accounting" contributed to 1.3. The research methodology clarify on the cognitive aspects of a transformation of the strong integration Stemming from the research objectives and research questions of the of Vietnam accounting sector with international accounting. The accounting thesis, the author used qualitative methods including descriptive statistics, system now no longer has only the department of financial accounting but synthesis, comparison, investigation and survey etc in studying the also includes department of financial accounting and department of theoretical and practical issues. management accounting. Some problems of organizing the management 1.3.1. Methods of collecting information accounting applications in enterprises had also been clarified in the researches. The methods of collecting information are in-depth interviews, phone calls, surveys in the enterprises. The author had conducted in-depth Dr. Ho Tien Dung (2009) in the research "Organizing the systems of interviews with two enterprises, sent questionnaires to 50 companies, enterprise management information" had focused on the method of received about 40 valid responses. organization, design and use of information system to achieve business objectives. The research results helped clarify the basis and methods for The survey questionnaire form was designed for two interviewed building information system in service of enterprise management. This is an objectives. The form in Appendix 01B was for enterprise managers important foundation for further researches on the separate aspects of (members of the Director Board, Board of Management). Form in Appendix information management system such as accounting information systems, 01C for was objects such as chief accountants and cost accountants. production management information system, personnel management 1.3.2. The methods of data synthesis and analysis information system etc. The information obtained from direct observation, interviews and In addition, there are many articles on the journals as " Cost management questionnaires would be encoded according to the content groups, factors in accordance with profit objectives and the ability to apply in Vietnam" by affecting the organization of cost management accounting information Assoc.Prof.Dr Nguyen Ba Thanh and Dr. Nguyen Cong Phuong (2009); system. Then, it would be analyzed and synthesized with results as in "Organization of accounting information system in the economic group" by Appendix 01E. Ninh Hoang Van (2010) proposed the solutions to applying and organizing CONCLUSIONS OF CHAPTER 1 the cost management accounting information system in Vietnamese Cost management accounting in general and cost management enterprise today. accounting information system in particular is a very effective tool of In summary, through a review of researches related to accounting controlling costs and has been studies by the domestic and foreign authors management and cost management accounting information system at home under many different angles. and abroad, the author recognized the importance and value of cost Through the research overview, the thesis inherited the theories of cost management accounting information system for Vietnamese enterprises in accounting, cost management accounting and cost management accounting general and garment enterprises in particular. On the basis of these information system. At the same time, the qualitative method used in the researches, the authors systematized the theory of cost management thesis was aimed at studying the garment enterprise managers’ demand for accounting information system and focused on studying the relationship the cost management accounting information system, reality of cost between cost management accounting information system and the management accounting information system organization in the garment characteristics of production organization and specific cost norm in the enterprises from which the solutions to the cost management accounting garment industry. Since then, the thesis will propose solutions to the information system organization in Vietnam garment enterprises were organization of cost management accounting information system in garment proposed.
9 10 CHAPTER 2 Organizing cost management accounting information system is the LITERATURE REVIEW ON ORGANIZING THE COST process of arranging and distributing resources to collect and process the cost MANAGEMENT ACCOUNTING INFORMATION SYSTEM IN data in a certain sequence in order to provide information for the enterprise PRODUCTION ENTERPRISES management requirements. 2.1.2. The role and factors affecting the organization of cost management accounting information system in enterprises 2.1. An overview of organizing the cost management accounting information system in production enterprises. 2.1.2.1. The role of the organization of cost management accounting information system in enterprises 2.1.1. The concept of cost, cost management and organizing the cost management accounting information system in production enterprises. The cost management accounting information system creates a useful management channel for managers in the increasingly rapid changing The concepts presented in this section are the basis for clear business environment. It is an information system of material - responsibility understanding and implementation of organizing the cost management relationship, a transparent information system on internal responsibility of accounting information system in enterprise throughout the next contents of enterprises in enterprise operation and management. the thesis. 2.1.2.2. Factors affecting the organization of cost management accounting 2.1.1.1. Costs information system in enterprises The thesis studied several concepts of cost in different range and from The organization of the cost management accounting information system different angles. However, in despite of any concept, costs must have three will not achieve the objectives and structural orientation of information if the compulsory characteristics: (1) cost is the waste of resources, (2) the waste of designers do fully pay attention to the factors of essence which control the resources must be tied to the results of enterprise operation, and (3) the operation of the system. These are factors (1) Objectives and strategies of the wasted resources must be evaluated. enterprises and demand for cost management accounting information, (2) the 2.1.1.2. Cost management. characteristics of production organization, (3) the level of machinery and On the basis of concepts in the economic dictionaries or by the author equipment and the qualification of accounting personnel. Haberstock in "Cost Accounting 1", it can be defined: Cost management is to 2.1.2.3. The relationship between the enterprise departments in organizing gather, calculate and control the cost incurred in the course of production the cost management accounting information system and business in order to provide the necessary information for the enterprise Organizing the cost management accounting information system costs management tasks. The cost managers do not simply recode the cost cannot be separated from the database of enterprise activities such as strategy information but also play an important role in the development of development, production, marketing, sales, human resource management etc. management decisions in order to provide customers with the best products In order to obtain this database, it is necessary to determine the level of and services with the lowest cost. responsibility and the relationship between communication objects such as 2.1.1.3. Organizing the cost management accounting information system in workshops, departments and accounting department. enterprises 2.2. The contents of organizing the cost management accounting Cost management accounting information system is a category in the information system. accounting information system. With the analysis of cost accounting, The thesis presents three contents of organizing the cost management accounting information system, the authors introduced the concept of cost accounting information system which are (1) Organizing cost estimating management accounting information system as the collection of cost data and information system, (2) Organizing the executed cost information system, (3) processing this data in an order so that the cost information could be provided Organizing the cost control and decision making information system. in order to build cost plans, cost control, thereby evaluating the operation and management decisions. 2.2.1. Organizing cost estimating information system 2.2.1.1. The cost norm system
11 12 The method of establishing the cost norm department, unit (workshops, manufacturing department) and estimate the The process of establishing the cost norm can apply one of two methods total criteria allocated to that department from the beginning of the year. In which are historical data analysis and task analysis. the end of fiscal year, after gathering the general actual production costs, process the difference. The method of historical data analysis The method of cost norm executes the evaluation of product price The method of task analysis based on the cost norms for three items of costs as designed. 2.2.1.2. The system of cost estimates 2.2.2.4. Organize to determine the costs for charged objects according to the Methods for establishing the cost estimates modern cost management model Enterprises can use the method of experience statistics or method of ratio The method of determining the costs according to the activities to establish the cost estimates. The method of target costs according to the product life cycle The method of experience statistics 2.2.2.5. Organizing the executed cost report system The method of ratio Providing information on executed costs to the department managers and Organize the database system for estimating costs senior executives is kinds of cost reports. Organize the system of cost estimate reports For order-based cost management system by orders, the report of 2.2.2. Organizing the executed cost information system executed costs is the Order-based cost notes. Executed cost information (also known as past information) is the For the process-based cost management, the report of executed costs sources of cost information obtained from the economic events happening in is Workshop production report. the business and production activities of enterprises. The report synthesizes sale costs, management costs according to To receive, process and reflect the executed information system, cost factors and behaviors of costs as the basis for the analysis of consumption management accounting applies the accounting methods such as vouchers, cost structure and evaluates costs by each factor and its effects on the account methods, synthesis and balance method through organizing the business results. voucher systems, account system and the cost circulation according to the To provide the detailed information of revenue, costs of each characteristics of the production organization of enterprises and executed cost department, each activities of enterprise, accountants establish the report system. Department Report. 2.2.2.1. Organize the cost accounting voucher system 2.2.3. Organizing the cost control information system and analyze costs for 2.2.2.2. Organize the production cost information system making decision The producing enterprises often require information about the 2.2.3.1. Organizing the cost control information system production costs in two types: Job Costing information system and Process Organize the database system Costing information system. The method system for cost analysis Job costing information system The method of differential cost analysis Process costing information system The method of cost control through the cost management centers. 2.2.2.3. Determine costs for charged objects according to the traditional 2.2.3.2. Organize the cost analysis for making short-term decisions methods Organize the database system The method of actual costs The method system for cost analysis for making short-term decisions The method of actual costs combines the estimated costs: In order to apply this method, enterprises need to develop general cost estimates for each The method of analyzing Cost - Output - Profit
13 14 The suitable method of information analysis. 2.2.6. Experiences in organizing the cost management accounting Organize the system of cost report for making short-term business information system in a number of foreign countries and lessons for decisions Vietnam enterprises To serve the purposes of the internal use of managers in the CVP 2.2.6.1. In the U.S. analysis, enterprises prepare the Business result report based on the behavior 2.2.6.2. In Germany of costs. This report must show the three main criteria which are Revenue, 2.2.6.2. In China Profit on variable costs and Net profit. 2.2.6.4. Lessons for Vietnamese enterprises To analyze suitable information, enterprises must identify correctly and - With economic conditions and the level of Vietnam enterprises today, fully the satisfactory information and establish the Table of suitable we will conduct the organization of Management accounting information information analysis for comparative alternatives. system on the basis of flexible application of traditional management 2.2.4. Organizing the cost management accounting apparatus accounting theories which suit with the business characteristics of each 2.2.4.1. The apparatus and methods of cost accounting management company. Besides, gradually receive the modern tools of cost management The combined model: This type of model combines the cost management costs from countries with developed management accounting and apply into accounting system with accounting system by each components of Vietnam. accounting: production cost accounting and pricing, sales accounting etc. - In large enterprises with high competitiveness, the demand for Cost Separate model: is the model of separate cost management accounting management accounting is clearer. Therefore, organizing the Cost system with the financial accounting system in the Accounting department. management accounting information system in the large scaled enterprises will be more feasible than in small businesses. Mixed model: this model combines two above models in which the organization of price cost management accounting department is separate and - To determine the responsibility of departments in implementing and other contents follows the combined model. According to the author, the controlling the costs, it is required that the Cost management accounting mixed model is flexible and able to provide information but requires a great information system must be organized according to the responsible investment for the organization and operation of apparatus and accounting centre. The responsible centers should be consistent with the organizational work implementation. structure of enterprises so that the center managers are capable of planning, adjusting and testing production and business costs arising in the course of 2.2.4.2. Organize facilities to perform the cost management works organizing the activities within the scope of center. 2.2.5. The characteristics of organizing the cost management accounting information system in garment enterprises CONCLUSIONS OF CHAPTER 2 2.2.5.1. The characteristics of cost management in garment enterprises 2.2.5.2. The characteristics of contents of cost management accounting information system in garment enterprises. In this chapter, the author analyzed the main contents of the cost management accounting information system including: business and - First, identify and classify costs in the garment enterprises at the production cost estimating information system, the executed cost information request of management accounting. system and cost control information system. On that basis, the thesis - Second, organize the cost estimating information system. confirmed the existence of the relationship between the cost management - Third, organize the provision of executed cost information accounting information system and the efficiency of enterprise management. - Fourth, organize the cost control. Chapter 2 had studied the factors affecting the cost management accounting information system and proved that the enterprise’s objectives and strategy and the enterprise manager’s demand for the cost management accounting information are the most important factors in establishing the cost
15 16 management accounting information system in enterprises. Besides, the - The OEM / FOB mode: is the form concentrating in the production author argued that the organization of the cost management accounting process. However, Vietnam garment enterprises still mainly produce information system depended on practical conditions as well as the according to specifications and designs provided by customers and in many organizational characteristics and production activities of each enterprise in cases use materials as specified by purchasers. order to promote best the role of a cost management accounting information - The mode of production according to the whole OMD original package system. has been implemented and succeeded in steps in the large garment enterprises At the same time, in chapter 2, the author also carried out the study on such Garment 10, Viettien Garment, Nha Be Garment. the experiences in organizing the cost management accounting information 3.1.2.2. The features of management apparatus system in some foreign countries such as United State, Germany and China 3.1.3. The features of accounting apparatus from which to draw lessons for Vietnamese enterprises now. In the garment enterprises, the accounting apparatus is usually held in the centralized manner. The organization of accounting apparatus at units is CHAPTER 3 executed according to the mode of online functions. THE REAL STATUS OF ORGANIZING THE COST MANAGEMENT 3.2. The reality of organizing the cost management accounting system in ACCOUNTING INFORMATION SYSTEM IN GARMENT Vietnam Garment Enterprises ENTERPRISES IN VIETNAM NOW 3.2.1. The generality of demand for cost management accounting 3.1. The basic characteristics of Vietnam garment industry information from the managers of garment enterprises over periods. 3.1.1. The formation history and development trend of the Vietnam Garment 3.2.2. The features of organizing the production cost accounting industry The survey results in the garment enterprises showed that the garment (1) Product (2) Auxiliary (3) Production (4) enterprises organized the production cost accounting in two main forms design industry (outwork) Commercialize which are job cost accounting and process cost accounting and no enterprise applied the method of activity cost accounting. 3.2.3. Classification of costs in the garment enterprises. Figure 3.1: The value chain of garment products 100% of surveyed enterprises classified costs by the economic contents of costs; classified by production costs and external costs and classified by Vietnam garment enterprises currently is standing in the third stage of the cost components in the price. Only 3 of 22 enterprises (large scale the value chain and only sell products for about 25% of the price to the enterprises) classified by the fixed and variable costs (accounting for 13%). consumer. This is also the stage with the lowest profit rate only accounting No enterprises classified by controllable and uncontrollable costs. for 5-10% but also having the most advantages of Vietnam garment enterprises because of the cheap and abundant source of worker. This 3.2.4. Organizing the system of cost estimate information position is very important but also easy to be replaced by other manufacturers The characteristics of garment industry are that products must comply if the product quality is not good or the price is higher than other with the norms of materials and techniques in a coherent way. According to manufacturers. the survey results, 100% of garment enterprises established the standard 3.1.2. The features of production organization and management organization norms of waste materials and technique in which there were also the norms in garment enterprises. of main material and accessory consumption and the norm of labor waste. The system of waste norms is primarily used by enterprises for the purpose of 3.1.2.1. The features of production organization calculating the product price. However, the use of waste norms aimed at - The CMT outwork: is a form of sub-contracts that the garment establishing the estimates is very little in enterprises. The reason is that enterprises are provided the whole form the design to materials and only enterprises cannot build a system of business and production cost estimates. execute production;
17 18 3.2.5. Organizing the executed cost information system (50%) of asked managers believed that the cost accounting information was 3.2.5.1. Organize to gather the initial information not supplied timely, 11/20 (50%) of managers evaluated that Cost management accounting information system had not completely met the The initial information on the executed costs incurred in garment demand for the information for enterprise management. enterprises through vouchers reflects the waste generated in enterprises. These vouchers must comply with the accounting regulations promulgated 3.3. Evaluating the organization of the cost management accounting under the decision No.15/2006/Qð-BTC information system in garment enterprises today 3.2.5.2. Organize the real production cost accounting 3.3.1. Achievements The collection of actual costs in garment enterprises is implemented 3.3.2. Shortcomings and causes quite clearly according to items. The objects to be collected the production 3.3.2.1. The manager’s demand for cost information costs are the purchase orders or production workshops (for example, garment Although the garment enterprise managers have made changes in workshop 1, garment workshop 2 etc.). This is also suitable with two popular awareness of cost management accounting information demand for making modes of production organization in garment enterprises which are purchase decision considerably, in the real business environment, the performance of order-based production or self-production and self-consumption. No enterprises still depends largely on the State decisions and macro policies and enterprise collected costs according to the product activities. depends less on the management qualification of each enterprise. That 3.2.5.3. Organizing the sales cost accounting and management cost spending a large amount to invest in the organization of cost management accounting accounting information system while the competitive environment is not The sales cost and management cost are now tracked in details on the really healthy so that garment enterprises can confidently make business Detailed Cost Book on the whole enterprise. decisions based on their own resources with the support of the cost management accounting information system is really a major obstacle in the 3.2.6. Organization information systems cost control and decision-making garment enterprises. 3.2.6.1. The cost control information system 3.3.2.2. Organize the cost estimating information system The cost information fully met the requirements of preparing the In the process of building the system of cost norms, some common financial statements. The production cost reports in garment enterprises problems are found in the enterprise: provided the cost information according to each product and workshop. The report of external costs provided the cost information according to the - Enterprises are not fully aware of the norm task and often overlook the elements on the enterprise scope. establishment of waste norms for activities outside production. The current production is controlled by enterprise through the real price - The capacity of building norms is limited and the close coordination criteria of a finished product in comparison with the price norm of that among the functional units in the process of building norms is lacked. As a product. Currently, the comparison stops at the level of disparity calculation result, enterprises often stop at building the norms of materials and technique but no enterprise specifies the affecting factors and level of influence of these not the system of cost norms (i.e not built the price norm). factors on the cost disparity. - Limited financial resources, especially in small and medium 3.2.6.2. Organizing the information system for making business decisions enterprises. Currently, in Vietnamese garment enterprises; the implementation of - The estimation is not considered important in the cost control in cost management accounting information system does not meet the garment enterprises; currently, only few garment enterprises carry out the requirements of economic analysis. Because of not preparing the Department business and production cost estimation and convert the norms of materials Report, no enterprise evaluates the performance of the department and and techniques tightly in the unit into cost estimates. industry. The consideration of business outcomes only stops at the summary 3.3.2.3. Organizing the executed cost information system of revenue of each product or each purchase order. Therefore, up to 10/20
19 20 - All surveyed garment enterprises identified the product price according the organization of the Cost management accounting information system such to the method of determining the real costs. No enterprise used the estimation as facility investment, accounting staff capacity improvement have not paid method or norm method to collect the production cost and calculate the sound attention. price. Thus, the advantages of the method of cost estimation and cost norms CHAPTER 4 in providing the information to the cost management have not caught the SOLUTIONS TO IMPROVING THE ORGANIZATION OF COST attention from enterprises. MANAGEMENT ACCOUNTING INFORMATION SYSTEM IN - Not separating the general production cost into fixed costs and variable GARMENT ENTERPRISES IN VIETNAM costs causes no enterprises to calculate the product price by the method of 4.1. The necessity of organizing the Cost management accounting direct costs. information system in garment enterprises in Vietnam. - No garment enterprise applied the method of operation costs or target 4.2. Requirements of organizing the Cost management accounting costs to determine the costs according to the modern cost management information system in garment enterprises in Vietnam. model. 4.3. Recommendations and solutions to organizing Cost management - The garment enterprises do not monitor the separation sales costs from accounting information system in garment enterprises in Vietnam. the management costs by fixed costs and variable costs which cause a lot of difficulties in the preparation of Department Report, CPV analysis and 4.3.1. Identify the costs serving the requirement of enterprise management. breakeven point analysis. To provide the management information, the best ways of identifying 3.3.2.4. Organizing the system of cost control information and making costs is to classify costs according to the level of operation. The cost report decision.. based on the operation level is aimed at providing information on the feature of cost fluctuations during the period. In this way, managers will see what The research results showed that this was the weakest part in the would happen, the costs increase or decrease or do not change and if they organization of the cost management accounting information system in the change, how much they changes when making business plans at the different Vietnamese garment enterprises. Very few enterprises organized the analysis level of operation. of cost information serving the enterprise management tasks. The cost analysis in the garment business is only formalistic if any. This is due to the For costs incurred in the garment enterprises, the thesis proposed a way current way of information organization unsatisfying the requirements of cost of indentifying costs which is considered suitable with price cost accounting analysis. Because of not classifying costs according to the relationship with serving the enterprise management in the current condition. (Table 4.1) operation, not establishing the business cost estimation, not applying the 4.3.2. The solution to organizing the cost estimating information system methods of calculating the reasonable product prices, the obtained cost The garment enterprises should establish the cost estimating information information has no value in making business decisions. system from database source organization to the coordination between the 3.3.2.5. The facilities and accounting apparatus departments during the process of building information. Facilities Solution 1: Develop a system of exact cost norms for the enterprise's Accounting apparatus products. CONCLUSIONS OF CHAPTER 3 Step 1: Build the waste norms of materials and technique for the direct cost factors (Appendix 14, 15) Chapter 3 studied and accessed the reality of organizing the Cost management accounting information system in garment enterprises in For the production costs, the garment products are characterized by Vietnam. Currently, the Cost management accounting information system in consisting of many constituents, so in order to build the waste norms of May now only meets the requirements of financial accounting and virtually materials and techniques, enterprise should build each stage of production has no role in providing information to managers for making business (cutting, sewing, finishing and packaging) decision in the competitive market. Besides, some of the basic elements for
21 22 Step 2: Build the standards of the price norm for incurred costs factors. 4.3.4. Solutions to Organizing the cost control information system and Thus, it requires the coordination between departments: business department, making decisions engineering department, HR department and Supplies department etc. Solution 1: Set up the Report on analyzing the difference between Solution 2: Garment enterprises should establish the cost estimating estimated costs and real costs system to serve the cost management. . Solution 2: Evaluate the profitability of each product / order In the context that garment enterprises are reducing the order of CMT / - For the ODM production organization, it is necessary to set up the FOB outwork and increasing the volume of products self-produced and self- information of profitability assessment for each product. consumed in the ODM manufacturing mode, the issue of selecting different - For the CMT / FOB production organization, it is necessary to set up output is found in the production process. To meet that requirement, Garment information of profitability assessment for each purchase order enterprises should establish a flexible estimation. The flexible estimation helps managers compare the actual costs - estimates at various levels of 4.3.5. Perfecting the Cost management accounting apparatus operation. Thereby, it can choose the level of production in accordance with 4.4. Conditions for the solution execution the enterprise's resources. (For example, the analysis in Table 4.1, 4.3 & 4.4) 4.4.1. On the side of the State Solution 3: Building an information relationship in setting up the 4.4.2. On the side of Garment enterprises information of norms and estimation. In this information network, the estimation department is the center to receive, process and communicate. All information related to the the norms of material consumption, the implementation of material and labor norms, the CONCLUSIONS OF CHAPTER 4 plan of resource reserve are collected this center and will be processed and Based on the realities in Chapter 3, the authors evaluated on two aspects: transferred to those in need. Information provided by the estimation the obtained results and the shortcomings and analyzed and drew causes of department are the basis for analyzing the cost fluctuation and give out the these shortcomings. consultancy for managers at all level in making business decisions. On this basis, the authors showed orientation outlooks on organizing the Solution 4: Apply the targeted cost management methods for garment cost management accounting information system in garment enterprises and products proposed a number of solutions to well-organized cost management The process of implementing the targeted cost management in the accounting information system including: garment enterprises - Solutions to the organization of cost estimating information system Step 1: Identify the targeted costs according to each department of - Solutions to the organization of executed cost information system production - Solutions to the organization of cost control information system and Step 2: Execute the identified cost targets decision-making. Step 3: Evaluate the results of cost execution In this chapter, the author also made recommendations to the State and 4.3.3. The solutions to organizing the executed cost information system enterprises to ensure that enterprises would perform the solutions above. Solution 1: It is necessary to use some kinds of vouchers facilitating the provision of cost management information according to the established norms Solution 2: Building the cost account system convenient for the cost information collection and processing costs according to the cost behaviors in the management works.
23 24 - Proposing the construction of the cost management accounting information system model in Vietnam garment enterprises with three CONCLUSIONS contents: Organizing the cost estimating information systems; Organizing the Vietnam garment industry has many opportunities for development as executed cost information system; Organizing the cost control and business well as faced many challenges in the process of international economic decision-making. Simultaneously, thesis also stated the conditions on the side integration, especially ever since Vietnam joined the WTO (2007). Well of the State and garment enterprises to ensure that the cost management controlled cost is a vital solution for Vietnam garment enterprises to survive accounting information system business to ensure that the system of and develop sustainably. The organization of cost management accounting management accounting information would be organized and operated information system is perceived as an essential tool to help managers at all effectively. levels in garment enterprises to control costs and make decisions. - An overview of researches at home and abroad related to the thesis For the purpose of objectives set out, the thesis had executed the such as cost accounting, cost accounting management, accounting following contents: information system, cost management accounting information system is the - Carried out the synchronous study on three important issues of cost basis for the inheritance and development of researches on the organization management accounting information system and the thesis pointed out that of the cost management accounting information system in garment there was an intimate relationship of cost control information between the enterprises in Vietnam. past (executed costs), present (cost analysis) and future (cost estimates) - The deep study of factors affecting the cost management accounting information. Besides, the thesis also had studied the experience in organizing information system proved that the objectives and strategy of enterprises and the cost management accounting information system in a number of foreign the demand for cost management accounting information on the side of countries and drawn useful lessons for Vietnam enterprises. Thence, the enterprise managers was the most important factor in establishing the cost thesis drew the necessary foundation for the organization of the cost management accounting information system in enterprises. management accounting information system in garment enterprises in The author hopes that this this can make its contribution to the Vietnam. organization of the cost management accounting information system in - Based on the theory of Enterprise management information system, the garment enterprises in Vietnam. thesis focused on clarifying the role of the cost management accounting The thesis’s direction of development: information system for the enterprise management in order to achieve the Based on the cost control through the cost management accounting objectives of cost control, production cost reduction and competitiveness information system, it is necessary to expand this research toward the enhancement during the international integration period. The thesis direction of building the system of assessment criteria for the responsibility confirmed the relationship between the cost management accounting of each individual, department related to the kinds of costs in garment information system and the efficiency of the enterprise management. The cost enterprises with the use of the quantitative research methodology to measure management accounting information system created a useful management and assess responsibility. Thence, proposing the solutions associating the channel for managers in changing business environment and a transparent responsibility and benefits of each individual and department of enterprises. system of internal responsibility in the enterprise operation and management. - By the qualitative research methodology through in-depth interviews and survey questionnaires, the thesis conducted the study in Vietnam garment enterprises to analyze and assess the reality of the organization of the cost management accounting information system in the garment enterprises today, especially in which there was the garment manager’s demand for the cost management accounting information system that was a condition for the successful application of research results.