PART 2 - RESEARCH CONTENT AND RESULTS CHAPTER 1: THEORETICAL BASIS OF NON-CASH PAYMENT ACCOUNTING
IN COMMERCIAL BANK
1.1. Concept
Maybe you are interested!
-
Completing the work of auditing cash capital in auditing financial statements performed by An Phat Auditing and Accounting Consulting Co., Ltd. - 13 -
Accounting for cash and receivables at Lam Son Joint Stock Company - 11 -
Electronic Bilateral Payment Accounting Between Kbnn And NHtm -
Completing payment accounting work with buyers and sellers at Dong A International Travel Company - 8 -
Completing the organization of payment accounting with buyers and sellers at Van Vu Joint Stock Company - 11
1.1.1. Cashless payment
Non-cash payment is a method of paying for goods and services without the presence of cash, but is carried out by transferring money from the payer's account to the beneficiary's account or by offsetting each other through the intermediary role of payment service providers.
1.1.2. Accounting for non-cash payment transactions
Accounting for non-cash payment transactions is a means of measuring and describing the performance of non-cash payment transactions between economic organizations carried out through banks.
From an accounting perspective, accounting for non-cash payments is making entries in book currency or currency.
1.2. Characteristics
- The movement of goods and materials is independent of the movement of money in time and space. Normally, the movement of money in payment and the movement of goods and materials do not match each other. This is a prominent and important feature of non-cash payment.
- Intermediary payment (cash) does not appear directly but only appears in the form of accounting money or book money and is recorded on accounting documents.
- In non-cash payments, there is at least one bank involved. All parties involved in the payment must open an account at the bank and with its own professional principles, only the bank has the right to withdraw money from the account as well as manage the customer's deposit account. Therefore, the bank becomes the payment center as an indispensable "third party". Therefore, the role of the bank is very important, both as an organizer, an implementer and a finalizer.
1.3. Role
Non-cash payment has emerged and become popular in many countries with developed economies and so far, it has proven its important and essential role in the payment process such as:
- Accelerate the speed of capital circulation, shorten the production cycle and increase the speed of payment in the economy. In addition, it helps to accelerate reproduction and directly impact the national economy. With a normal production cycle, the faster and more timely circulation of capital will be a favorable factor and bring practical effects in investment and reproduction. Currently, the success and remarkable developments of information technology as well as efforts to innovate and expand payment methods will create conditions for rapid transactions and improve the efficiency of capital use in the economy.
- Helps banks concentrate capital resources in society, reduce cash ratio, save costs of circulation, printing, transportation, issuance, and preservation.
- Non-cash payments facilitate commercial banks to perform their money creation function. Using book money and making payments by deducting from the payer's account to the beneficiary's account or clearing between banks will help reduce the amount of cash in circulation, creating idle money for banks to use for lending. This is the basis for banks to perform their money creation function.
- Cashless payment also plays an important and outstanding role compared to cash payment in limiting the risks encountered in circulation. For example, loss, theft or tearing, dirt, etc., which reduces the value of money.
- Create favorable conditions for banks to control economic activities of economic agents with the aim of strengthening payment discipline, ensuring financial revenue and expenditure principles and improving capital use efficiency. Cash revenue and expenditure are shown on payment accounts at banks, reflecting the production and business activities of enterprises, serving as a basis for lending or debt collection.
- On a macro level, cashless payments also create conditions for the State to easily manage and control financial and monetary aspects in society. With the information
With information provided by banks, the State can more accurately grasp the amount of money circulating in society, thereby having policies and plans to stabilize the value of money.
And so, it is clear that non-cash payment plays a particularly important role for economic actors, reflecting the level of scientific and technological development, the intellectual level of a country in general and the image of the industry in particular. Therefore, in order to meet the development needs of the economy in the current integration period, the necessary condition is to promote the development and constantly innovate non-cash payment methods and along with it, the accounting operations reflecting that payment process must become complete, adequate, timely and accurate to contribute to the stability and development of the national financial system, promoting the process of international integration.
1.4. The objective necessity of cashless payments
Cash payment has long been a part of life because it is a simple, convenient payment method and is quite popular in commercial relations of buying and selling goods. However, it is only suitable for small-scale, narrow-scope economic transactions. As the production of goods develops, people's needs increase and goods and services become more and more diverse in both quantity and quality, trade relations are expanded internationally, requiring a form of payment suitable to practical conditions. Cash payment now faces many obstacles and reveals certain limitations. Cash payment increases the amount of cash circulating in the economy, creating pressure on money, thereby strongly affecting the price of goods and increasing inflation, causing currency devaluation, greatly affecting the economy as well as many negative impacts on social life. With a developing economy, the volume of production and circulation of goods is increasing, and payment exchanges are expanding, so cash payments can no longer promptly meet all payment needs.
From this objective reality, it is required that new forms of payment are born, more advanced, modern and safer to meet the increasing needs of production and circulation of goods. The birth of non-cash payment has overcome the disadvantages of cash payment, and more.
It has become a modern payment tool, suitable for the needs and general development orientation of the economy.
1.5. Principles of non-cash payment
Non-cash payment reflects the legal economic relationship in the delivery and payment of goods and services, so in the payment process, the participating parties must comply with the following principles:
Firstly, payment participants (including legal entities and individuals) must open a payment account at a payment service provider and have the right to choose a payment service provider to open an account. When making a payment, the payment must be made through the opened account in accordance with the prescribed regime and must pay the payment fee according to the regulations of the bank and the payment service provider. In case the payment currency is foreign currency, it must comply with the State's foreign exchange management regulations.
Second, the payment amount between the payer and the beneficiary must be based on the quantity of goods and services delivered between the buyer and the seller. The buyer must prepare sufficient means of payment (balance in the payment deposit account at the payment service provider or overdraft limit, if any) to meet the requirements for full and timely payment when a payment request arises.
If the buyer is late in payment or violates the payment regime, he/she must pay a penalty according to the current payment regime.
Third, the seller or service provider is the one who receives the money transferred by the payer into his account, so he must be responsible for delivering the goods or providing the service promptly and in accordance with the value that the buyer has paid. At the same time, he must carefully control the documents arising during the payment process.
Fourth, as payment intermediaries between buyers and sellers, payment service providers must properly perform their role as payment intermediaries:
- Only deduct money from the payer's account to transfer to the beneficiary's account when there is an order from the payer (shown on the payment documents). In cases where there is no need for an order from the payer (no need for the account holder's signature on
Documents) only apply to certain forms of payment such as collection orders or economic court orders.
- Payment service providers must be responsible for guiding and assisting customers in opening accounts and using payment instruments appropriate to the characteristics of production and business, methods of delivery and transportation of goods. Provide customers with complete documents used in the payment process.
- Organize accounting, transfer payment documents quickly, accurately, and securely. If there is delay or inaccurate accounting causing damage to customers during the payment process, the customer must be fined to compensate according to general sanctions.
1.6. Non-cash payment methods
According to legal documents stipulated by the Government and the State Bank, currently in Vietnam there are 5 main forms of non-cash payment used for payments between organizations and individuals in the economy:
- Payment check
- Payment authorization
- Collection authorization
- Payment card
- Letter of credit (L/C)
Because the scope of the research topic is limited to two forms of e-commerce payment: payment by Check and Payment Order, in this scientific basis section, I would like to present only the theoretical basis of these two forms.
1.6.1. Payment by Check
A check is a payment order issued by an account holder requesting the payment unit to pay an amount of money from his payment deposit account to the beneficiary named on the check or the holder of the check.
According to Decree 159/2003/ND-CP dated December 10, 2003 on the supply and use of Sec:
“A check is a means of payment established by the issuer in the form of a pre-printed document, ordering the payer to unconditionally pay a certain amount of money to the beneficiary . ”
The payment validity period of the Sec is regulated for each country and depends on each type of Sec. According to Article 28, Decree 159/2003/ND-CP, the presentation period of the Sec is 30 days from the date of issuance. That is, from the date of issuance of the Sec to the date the beneficiary submits the Sec to the bank for payment, including holidays and Sundays. The payer is responsible for payment on the presentation date or the next working day after that presentation date if the expiration date falls on a holiday.
According to the nature of payment, there are currently:
- Cash receipt
- Transfer check
- Sec said
Within the scope of the topic, we only focus on researching Transfer Sec and Payment Sec, which are two commonly used types today.
1.6.1.1. Transfer checks
A transfer check is a check signed by the account holder and issued directly to the beneficiary upon receipt of goods or services to fulfill his/her payment obligations. It is a simple form of payment, not requiring the opening of a separate deposit account to guarantee payment. Therefore, a transfer check is often used in cases where the two parties trust each other in payment and have a long-term and regular trading relationship. In addition, to ensure that the payment does not exceed the account balance, the unit responsible for payment must follow the principle of Debit first, Credit later.
When the beneficiary submits the Check to the bank, there are two cases as follows:
- The drawer and the beneficiary open accounts at the same payment service provider (hereinafter referred to as bank).
- The drawer and the beneficiary open accounts at two different banks but participate in clearing.
Payment between the drawer and the beneficiary when opening an account at the same bank
(1)
Drawer (Buyer)
Beneficiary (Seller)
- Payment process:
(3)
General service bank
(2)
(4)
Diagram 1.1: Diagram of circulation of sec transfer documents within the same bank
(1) The buyer signs and issues a transfer certificate and delivers it directly to the beneficiary (seller) after receiving the goods and services provided.
(2) The beneficiary (seller) receives the Check, checks and makes a list of the Checks to be submitted along with the transfer slips to the bank requesting payment.
(3) The common service bank will check the checks and related documents. If they meet the conditions, it will deduct from the deposit account of the drawer (buyer) and record a Debit to the drawer.
(4) The bank credits the beneficiary's account.
Payment between the drawer and the beneficiary when opening accounts at two different banks
- Payment process:
Drawer (Buyer)
(1)
Beneficiary (Seller)
(4)
(2)
(6)
(5)
Drawer's Bank
(3)
Beneficiary Bank
Diagram 1.2: Diagram of transfer of sec documents between 2 different banks
(1) The buyer signs and issues a transfer certificate and delivers it directly to the beneficiary (seller) after receiving the goods and services provided.
(2) The beneficiary (seller) receives the Check, checks and makes a list of the Checks to be submitted along with the transfer slips to the bank serving the request for payment.
(3) The beneficiary's bank will check the Checks and related documents, then forward the Checks and the Check submission list to the drawer's bank.
(4) The bank serving the drawer checks the documents and the balance of the account holder's deposit account and proceeds to deduct from the deposit account, debit and report the debit to them.
(5) The issuing bank checks the documents, uses the copies of the Sec submission list to create a clearing payment document and transfer it to the beneficiary's bank for payment.
(6) The beneficiary's bank receives the cheque deposit slip and credits the account and notifies them of the credit.
1.6.1.2. Sec guarantee
A guaranteed payment check is a type of transfer check that is confirmed by the bank for payment ability, ensuring payment for each check based on the money that the issuer has deposited, so that there is no situation of issuing more than the balance. Therefore, a guaranteed payment check is a check that is guaranteed for payment ability, so it is used in cases where the two buying and selling parties do not trust each other in payment.
To issue a guaranteed check, the issuer must go to the bank to complete the guarantee procedure for the check before it can be given to the beneficiary. The check will be stamped "Protected" and have a secret symbol.
Payment of guaranteed sec with payment service provider
(2)
Drawer (Buyer)
Beneficiary (Seller)
(4)
- Payment process:
General service bank
(3)
(1)
(5)
Diagram 1.3: Diagram of circulation of Sec documents with the same bank
(1) The issuer goes to the bank to complete the procedure for guaranteeing the payment of the Sec. The bank compares the request and the account holder's balance. If qualified, it completes the guarantee procedure. Proceed to withdraw money from the deposit account and transfer it to the account guaranteeing the payment of the Sec.
(2) The issuer delivers the Check to the beneficiary to receive the goods and services provided.
(3) The beneficiary prepares a list of the Checks and submits them to the bank for payment.
(4) The bank checks all necessary elements, if accepted, it will credit the beneficiary's account and notify them.
(5) Bank closes the account guaranteeing payment of Sec
Payment of guaranteed check between two different banks but in the same system
(3)
Beneficiary (Seller)
Beneficiary Bank
Payment process
(2)
(5)
(1)
Service Bank
drawer
(4a)
(6)
Drawer (Buyer)
(4b)
Diagram 1.4: Diagram of circulation of payment guarantee documents between 2 banks in the same system
(1) The issuer goes to the bank serving him to complete the guarantee procedure. Prepare a request for guarantee of the Sec with the Sec attached, and at the same time, create a payment order requesting to withdraw the payment deposit account to deposit into the deposit account to guarantee the payment of the guaranteed Sec. The bank checks the procedures and valid documents to proceed with the guarantee of the Sec.
(2) The buyer signs and delivers the Check to the seller upon receipt of the goods and services provided.
(3) The beneficiary submits the statement of payment of the Check and the guaranteed Check to the bank serving him.
(4) The bank receives and checks the relevant documents.
(4a) The beneficiary's bank sends a debt transfer order to the drawer's bank.
(4b) Credit the account to the beneficiary
(5) The bank receives the debit order and debits the account to the drawer.
(6) Clearing between two banks
In case the buyer and seller open accounts at two different banks, the system can also pay each other by guaranteed sec if the two banks have a prior agreement based on the capital payment method chosen and signed by the two banks. Therefore, there will be different payment procedures.
1.6.2. Payment by Payment Order
A payment order is an order from the account holder, made according to the bank's form, to authorize the bank to transfer money from the account of the issuer to the beneficiary's account.
With the advantages of being simple to issue and use, quick procedures that ensure safety for both banks and customers, Payment Orders are therefore quite popular and account for the highest proportion in current payments.
(1)
(2)
(3)
Payer (Buyer)
Payment Order between 2 customers opening accounts at the same bank
Beneficiary (Seller)
(4)
General service bank
Diagram 1.5: UNC transfer diagram between 2 customers opening accounts at the same bank
(1) The seller supplies goods and services to the buyer under the contract.
(2) After receiving the goods and services, the buyer creates a payment order and sends it to the bank to request payment to the seller (beneficiary).
(3) The bank checks the payment authorization and the balance on the buyer's account, debits the account and reports the debit to them.
(4) Credit the seller's account and notify them.
Payment of payment orders between two customers opening accounts at two different banks
(5)
(2) (3)
- Payment process
(1)
Payer (Buyer)
Beneficiary (Seller)
(4)
Payer Bank
Beneficiary Bank
Diagram 1.6: Diagram of document circulation between 2 customers opening accounts at 2 different banks
(1) The beneficiary (seller) delivers goods and services to the payer (buyer).
(2) After receiving the goods or services, the payer will create a payment order and send it to his/her serving bank to request payment to the beneficiary.
(3) Based on the payment order, the payer's bank checks the documents and account balance. If eligible, it debits the deposit account and reports the debt to the buyer.
(4) The payer's bank transfers the credit transfer order to the beneficiary's bank.
(5) The beneficiary's service bank, based on the transfer order, credits the deposit account and notifies the beneficiary.