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Statistics by Enterprise Size on Number of Employees and Revenue


The turnover of medium-sized enterprises (34.36%) is larger than the proportion of medium-sized enterprises (in terms of number of employees, 22.05%). This result shows that travel enterprises in general operate quite effectively compared to their size.


Number of employees of the enterprise



Total Revenue of the year



7.18% 0.00%



7.18% 0.00%




22.05%




34.36%



70.77%



58.46%



<10


From 11 to 50 From 51 to 100


Over 100


<10


From 10 to 100 From 101 to 300


Over 300

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Statistics by Enterprise Size on Number of Employees and Revenue

Figure 3.2: Statistics by enterprise size on number of employees and revenue

(Source: NCS synthesis)

3.1.2. Characteristics of business activities of travel agencies

The products of travel agencies are tourism programs: The business process of a package tour program includes five stages: Program design and cost calculation; Organizing mixed promotion (communication); Organizing consumption channels; Organizing implementation; Post-implementation activities. This process is shown in the diagram below:


Program design, cost calculation

Mixed promotion organization

Organization of consumption channels

Implementing organization

Post-completion activities

- Market building

- Build the purpose of the trip

- Trip design

- Trip details

- Determine the cost

- Determine selling price

- Determine the tie point

capital

- Propagate

- Advertisement

- Stimulate consumers

- Direct Marketing

- Selecting sales channels

- Manage sales channels

- Agreement

- Prepare to perform

- Perform

- End

- Evaluate customer satisfaction

- Complaint handling …

- Write a letter of inquiry

- Maintain relationships

Diagram 3.1: Tourism program business process

( Source: Nguyen Van Manh et al., 2020)


The tourism program business process is designed based on the AIDAS model.

- This model means designing a tourism program, promoting (communication) mix suitable for the consumption characteristics of customers will create attention (Attention), from attention to clearly recognize the benefits (Interest), when clearly recognizing the benefits will create desire (Desire), when there is desire will lead to consumption action (Action), when consumption creates satisfaction (Satisfaction). High or low satisfaction is the quality of the tourism program. If the quality is high, customers will continue to buy next time, repeat purchases or introduce tours to other customers, that is, creating customer loyalty to the products and brands of the travel company (Brand loyalty). Therefore, in travel companies, evaluating the performance (through a number of financial performance and customer performance evaluation indicators) is often done right after each tour . KTQT often works with the operations and customer care department to evaluate the performance of the tour program, see how much revenue is earned, the revenue/cost ratio, the rate of customer satisfaction (by satisfaction level, age, gender), the rate of customers who continue to sign contracts or recommend the tour to their friends and relatives, etc.

Types of travel business: Based on the geographical scope of operation, travel business activities include: domestic travel business and international travel business: most of Vietnamese travel businesses are currently international travel businesses (allowed to do both domestic and international travel), therefore, business managers often need information on the performance of domestic travel, inbound international travel and outbound international travel. Therefore, it is necessary to monitor in detail the performance of the existing types of travel business of the business, this characteristic directly affects the organization of performance evaluation activities; Build appropriate evaluation indicators such as Domestic revenue ratio/Total revenue, Inbound revenue ratio/Total revenue, Outbound revenue ratio/Total revenue, Domestic revenue growth ratio, Inbound revenue growth ratio, Outbound revenue growth ratio, etc.

Customer characteristics: For travel agencies, customers are the ones who buy their tour programs. This group of customers is very diverse and complex in terms of composition, occupation, gender, age, education level, interests, customs, lifestyle, etc. Therefore, achieving customer satisfaction with tour programs is very difficult and is always the goal of travel agencies. For this reason, it is necessary to conduct a customer-based evaluation of the tour program right after each tour and at the end of each business period, in order to overcome


Limit (if any), improve service quality in the next tours, to achieve customer satisfaction and aim to achieve financial performance goals in the future.

3.1.3. Characteristics of management organization at travel businesses

Survey results in Table 3.1 show that 113/195 (equivalent to 57.95%) of the survey subjects come from joint stock companies and 82/195 (42.05%) are from LLCs; And 100% of the travel companies participating in the survey are organized according to the functional online model. In joint stock companies, the management apparatus includes: General Meeting of Shareholders, Board of Directors, Director (or General Director), Board of Supervisors (or Internal Audit Board) and functional departments (as in Appendix 20a). In some large joint stock companies, the management apparatus includes the General Meeting of Shareholders, Board of Directors, Executive Board and the units below can be organized into member companies, subsidiaries, organic branch offices, ... (as in Appendix 20b). In LLCs, the management apparatus usually includes the Board of Directors and the functional departments below (as in Appendix 21); some LLCs with two members also have a Board of Members and a Chairman of the Board of Members. The number of member companies, subsidiaries, branch offices and departments in each enterprise will not be exactly the same because it depends on the type of enterprise and the size of each enterprise; however, in general, travel enterprises often have functional departments such as the administrative organization department (human resources department), the operations department (travel business department), the marketing department, and the financial accounting department (Financial Planning Department). Each department has its own separate function and provides information and advice to managers in making decisions.

The characteristics of the enterprise's management apparatus have a direct impact on the evaluation of business performance: For corporations with subsidiaries, many branches and different business segments (domestic travel business, international travel business, etc.), it is necessary to have information on the business performance of the entire company and of each business segment; Therefore, it is necessary to design appropriate financial indicators such as Domestic revenue ratio/Total revenue, Inbound revenue ratio/Total revenue, Outbound revenue ratio/Total revenue, Domestic revenue growth rate, Inbound revenue growth rate, Outbound revenue growth rate, Branch revenue growth rate year N/year N-1, ... In addition, for companies listed on the stock exchange, they must publish Financial Reports and Annual Reports, so it is necessary to use financial indicators (such as ROI, ROE, ROA, quick payment capacity, current payment capacity, ...) and non-financial indicators (such as Number of times being fined by tax authorities or violating environmental laws, Number of activities from


On the contrary, for companies without subsidiaries, branches and not listed on the stock exchange, it is only necessary to conduct a business performance assessment to meet the requirements of the business manager, so there is no need to use many evaluation indicators like large travel companies.

3.1.4. Characteristics of accounting organization

* About accounting organization

The results of a large-scale survey of travel businesses (Appendix 06) show that the organization of the accounting apparatus depends largely on the size of the business. For large-scale businesses with many branches and representative offices, the accounting apparatus is often organized in a decentralized model (accounting for 7.18% (14/195 businesses)), meaning that each branch has its own accounting apparatus, independent accounting, recording economic transactions arising at the branch, preparing financial statements according to regulations and submitting them to superiors to prepare a consolidated report for the entire business; And 9.23% (18/195 votes) responded that businesses organize their accounting apparatus in both a centralized and decentralized form (as shown in diagram 3.3 - Appendix 22).

On the contrary, in small and medium-sized enterprises (163/195 survey responses, equivalent to 83.59%), enterprises organize their accounting apparatus in a centralized model, all work is centrally handled at the company's Accounting Department. SMEs often organize their accounting apparatus very simply, with a small number of accounting staff (2-4 people), including a Chief Accountant, a Treasurer and one or two accountants (as shown in diagram 3.4 - Appendix 23). In particular, the evaluation of the enterprise's performance is carried out by the Chief Accountant and General Accountant at the request of the enterprise's manager.

Looking at the organizational chart of the accounting apparatus of 2 typical enterprises representing 2 groups of large-scale enterprises and small and medium-sized enterprises (Appendix 22, 23) shows that: Large-scale enterprises organize the accounting apparatus very systematically, each accountant is in charge of a part of the accounting work. Meanwhile, small and medium-sized enterprises, the accounting apparatus is simple, the number of accountants is small, one employee can undertake many different areas of work. This has had a significant impact on the application of management accounting to evaluate the performance of enterprises. In large enterprises, the Chief Accountant and General Accountant will be primarily responsible for evaluating the performance of enterprises, assigning data collection to accountants. Meanwhile, in small and medium-sized enterprises, with few employees, the Chief Accountant will perform tasks related to evaluating the performance of enterprises.

* About accounting policy

According to the results of a large-scale investigation and survey, 78/195 responses from surveyed enterprises (accounting for 40%) applied the accounting regime according to Circular 200/2014/TT-BTC, the rest


apply Circular 133/2016/TT-BTC. Most travel companies apply the General Journal accounting form (accounting for 74.87%), the remaining companies apply the Voucher form (20%), General Ledger Journal (5%) and no company applies the Voucher Journal form (Appendix 06). In which, Vietnam Transport Tourism and Marketing Company - Vietravel applies the accounting regime according to Circular 200/2014/TT-BTC; Hanoi Investment and Tourism Trading Joint Stock Company performs accounting according to Circular 133/2016/TT-BTC; Both of these companies record books in the General Journal form.

3.2. Current status of management accounting in evaluating the performance of Vietnamese travel businesses

3.2.1. Establish a system of evaluation indicators

3.2.1.1. Basis for establishing a system of evaluation indicators

The results of Table 3.2 show that different travel businesses can rely on certain bases to establish a system of performance evaluation indicators suitable for their business.

Table 3.2: Basic statistics for establishing the system of indicators for evaluating the quality of human resources


Base

Large enterprise

SMEs

Number of votes

Percentage

Number of votes

Percentage

Information request from the Ministry of Culture, Sports and Tourism

14

100%

181

100%

Need for information on the housing situation

Business Management

14

100%

181

100%

The goals set by the manager

13

92.86%

142

78.45%

Other facilities

13

92.86%

106

58.56%

(Source: NCS synthesis and analysis)

First: Establishing an evaluation index system based on information requirements of the Ministry of Culture, Sports and Tourism (MOCST).

Circular No. 26/2014/TT-BVHTTDL of the Ministry of Culture, Sports and Tourism "Regulations on the statistical reporting regime applicable to tourism establishments managed and licensed by the tourism industry" clearly stipulates that every month and every year, tourism business units must prepare a Business Results Report to the governing body (which can be the Department of Culture and Information or the Department of Culture, Sports and Tourism or the Department of Tourism). Therefore, accountants in travel agencies have based on this information requirement to determine appropriate evaluation indicators such as: Number of international arrivals served during the period, Number of domestic tourists served during the period, Number of Vietnamese tourists traveling abroad served during the period, Revenue from international arrivals, Domestic tourism revenue, Revenue from Vietnamese tourists traveling abroad (Appendix No. 14).


Second: Establishing a system of evaluation indicators based on the information needs of business managers on performance.

The results of in-depth interviews with business managers (Appendix 03a) show that: Each manager has different general information needs and detailed information about the business's performance, depending on the characteristics of the business's operations (Scope of operations - domestic, international or both, business strategy - Revenue growth; Increase market share; Business strategy towards providing perfect service to customers; Enhance business position, business strategy in the context of Covid, ...), type of business (Listed joint stock company, Unlisted joint stock company, LLC, ...). Evidence of the differences in business managers' needs for information about the business's performance is shown in Appendix 03a.

The common point about the information needs of Vietnamese tourism business managers on the performance of operations is that they all need information on performance of operations in terms of finance, customers, internal business processes and pay little attention to performance of operations in terms of learning and development. Most businesses do not evaluate performance of operations in terms of the responsibility of the business to the community, locality and authorities. Because:

Firstly, every enterprise needs to know its financial performance after a certain business period, including actual revenue, revenue growth rate, pre-tax profit, after-tax profit, profitability ratios, etc.;

Second, with the characteristics of travel businesses, customer satisfaction can predict future financial performance, deciding the survival of the business, therefore, business managers want to see "what do customers say about me?", "how satisfied are they?", and whether they will continue to sign future contracts with the business, customer satisfaction assessments will be the basis for businesses to promptly adjust links in the value chain that are underperforming, in order to improve service quality and attract customers to return, which is a premise for increasing future financial performance;

Third, travel businesses are interested in internal business process performance, to determine the number/proportion of new tour programs during the period, the number/proportion of tour programs that satisfy customers, and to review programs that are complained about by customers (if any); These improvements in internal business processes all aim to achieve the ultimate goal of increasing financial performance for the business;

Fourth, Vietnamese travel businesses pay little attention to the learning and development aspects of HRD;

Fifth, travel businesses are tending to pay attention to CSR in terms of their responsibility to the local community (in addition to always complying with the law).


In order to maintain the smooth operation of the business, travel businesses tend to spend more of their budget on charity activities (Results of in-depth interviews with business managers, Appendix 03a).

Based on the information needs of business managers on operational performance, accountants determine a system of appropriate evaluation indicators to serve the evaluation, analysis and provision of information at the appropriate time, meeting the requirements of managers.

Third: Establishing a system of evaluation indicators based on the goals set by the manager.

The results of in-depth interviews show that: In addition to basing on the information requirements of the Ministry of Culture, Sports and Tourism and the information needs on business performance of business managers to determine evaluation indicators, travel businesses also rely on the goals set by managers for each period, on specific aspects.

Fourth: Establishing a system of evaluation indexes based on a number of other bases.

In some travel companies that aim to achieve certain awards in the planning year, accountants have relied on the award criteria to determine the evaluation indicators to use. For example, a company wants to achieve the award "Top 10 best international travel service companies welcoming tourists to Vietnam" organized by the Ministry of Culture, Sports and Tourism, Vietnam National Administration of Tourism, Vietnam Tourism Association, the criteria to achieve this award are "Best service quality, most satisfied tourists, welcoming at least 10,000 visitors to Vietnam/year"; Accordingly, accountants will determine the indicators to use: Customer satisfaction level, Number of visitors to Vietnam that the company has welcomed during the period; These indicators will be monitored in each period to provide information for managers to adjust the appropriate business plan in the next period (if necessary) to achieve the criteria set by the award.

In addition, large-scale travel businesses, which are joint stock companies listed on the stock exchange, must publish Financial Reports, Management Reports and Annual Reports according to the regulations of the Securities Commission. Therefore, accountants in these businesses also use some additional indicators to meet the information requirements of related parties.

Section 3.2.1.2. below will specifically present the level of use of evaluation indicators in practice by travel businesses in Vietnam.

3.2.1.2. System of evaluation indicators in Vietnamese travel businesses


The results of the in-depth interviews (Appendix 03b) also show that: Experts in travel businesses all agree that the system of indicators that NCS has built (Appendix 04) is sufficient to evaluate the overall performance of the entire business, without adding any other indicators; However, due to actual working conditions, awareness level, and information needs of managers, businesses do not use all of these indicators. Some indicators are used very frequently, some indicators are "used occasionally", and some indicators are "rarely" or "never used". Therefore, NCS conducted a large-scale survey to understand the average level of use of evaluation indicators in the reality of travel businesses, as a basis for calculating, measuring, analyzing and evaluating performance; And survey on "The importance of these evaluation indicators" to serve as a basis for proposing a system of evaluation indicators that can be applied to two groups of enterprises of different sizes in Chapter 4.

To answer the question “What evaluation indicators are Vietnamese travel businesses using?”, NCS transferred the data collected from the survey into SPSS software to perform descriptive statistics. In particular, NCS performed descriptive statistics on the level of use of evaluation indicators in 2 groups of travel businesses (large-scale businesses and small and medium-sized businesses), the results are shown in the following tables (Appendix No. 17):

Table 3.3: Statistics on the level of use of financial indicators


Variable name


Describe

Large enterprise

SMEs

GTNN

GTLN

Central

jar

GTNN

GTLN

Central

jar

TC1

Business productivity

of the tour program

2

4

2.86

1

5

2.86

TC2

Revenue growth rate year N/year

N-1

4

5

4.21

3

5

4.35

TC3

Rate of revenue from tourists

international arrival

4

5

4.71

1

5

3.94

TC4

Domestic revenue ratio

4

5

4.93

3

5

4.73


TC5

Rate of revenue from Vietnamese tourists traveling abroad

outside


4


5


4.79


1


5


3.61

TC6

Revenue rate from group guests

4

5

4.57

4

5

4.54

TC7

Revenue from retail customers

4

5

4.14

3

5

4.12

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