System of Indicators and Methods for Evaluating the Efficiency of Import Activities of Enterprises

The Party and the State must also take as a basis all activities, fields, and stages of the import business process and fully consider the interactions of the fields in a system according to the established goals.

Ensure practicality in improving the efficiency of import activities. This requires that when determining the goals and improvement measures, they must come from the characteristics and economic and social conditions of the industry and the enterprise in each period. Only then will the targets for improving the efficiency of import activities and the import business plan of the enterprise have sufficient scientific basis for implementation, ensuring the trust of employees and limiting the risk of loss. And thus, the task of improving the efficiency of import activities have sufficient conditions to be implemented.

The efficiency of import activities must be evaluated based on the final results. This requires that when calculating and evaluating, on the one hand, the quantity and value of imported products sold must be based on, and on the other hand, all costs incurred to import and sell those goods must be calculated.

III. System of indicators and methods for evaluating the efficiency of import activities of enterprises

When considering the business performance of each enterprise, it is necessary to rely on a system of standards, enterprises must consider the standards as goals to strive for. It can be understood that the efficiency standard is the limit, the landmark that determines the boundary of whether or not there is efficiency. If according to the industry-wide comparison method, the average value achieved by the industry can be taken as the efficiency standard. If there is no data for the entire industry, then compare it with the indicators of the previous year. It can also be said that only enterprises that achieve these indicators can achieve economic indicators. The system of indicators to evaluate the business efficiency of enterprises includes:

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To evaluate the import performance of a business, analysts often evaluate based on the following basic economic contents:

1. Assessment of import turnover and growth (decrease) rate

* Analytical meaning:

The scale of import, large or small, the speed of import increase, fast or slow, all affect the efficiency of import business and the level of import market domination of the company. The increase or decrease in import turnover compared to each period in the past partly shows whether the company is operating effectively or not. The import turnover of an item increases steadily over the years, proving that importing that item brings more profit to the company than importing an item with fluctuating turnover. The company partly has hope for the efficiency of importing that item.

* Analysis objectives:

- Develop economic indicators to assess the relative absolute increase and decrease in import turnover over the years.

- Provide comments and assessments on the scale of imports, the rate of increase and decrease in the company's imports over the years, and study the factors affecting the company's import capacity.

- Propose solutions to increase the scale and speed of business imports.

2. Assessment of the status of signing and implementing import contracts

* Analysis objectives:

- Analysts must collect data reflecting the status of import contract signing and the status of implementation of signed import contracts over the years of operation.

- Evaluate and analyze separately: the advantages and disadvantages of the enterprise in the work of signing and organizing the implementation of contracts. Study the objective and subjective factors affecting each stage: signing and implementing signed import contracts.

- Propose solutions to increase the ability to sign and perform well signed import contracts.

* Research significance:

Evaluating the import performance of a commodity is not only done after the goods are imported into the country and consumed in the domestic market, but also done right from the time the contract is signed and the level of implementation of import contracts.

According to the current trend, many people believe that the more import contracts a business signs, the more effective the business is in importing. However, the above understanding still reveals many limitations. A truly effective import contract is not only about signing the contract, but also about how to sign it to get the most benefit, spend the least amount of money while achieving the highest efficiency, and how to negotiate so that both parties to the contract can win. Similarly, we should not base on books or count the number of signed contracts to evaluate the effectiveness of import activities, but must base on the actual situation of import activities, that after signing the contract, how the contract is implemented, how much or how little cost is incurred, and whether the contract is implemented smoothly or not.

The assessment of import performance should not only be based on the number of contracts and the implementation of signed contracts, but also on the quality of contract negotiation and implementation. To achieve efficiency in signing and implementing contracts, it is necessary to pay attention to factors affecting the ability to sign import contracts.

* Factors affecting the ability to sign import contracts:

- Objective:

+ Import policy mechanism of Vietnam and exporting countries

+ Favorable or unfavorable business environment of competitors

+ Other macro policies

- Subjective:

+ Depends on the ability to promote trade

+ Depends on the negotiation ability of the staff

+ Depends on the quality, design and price of imported products

+ Depends on the performance of previous import contracts (for regular customers who have had previous transactions).

* Factors affecting the ability to perform import contracts:

- Actual level of signed import contracts (many contracts have been signed but exceed the company's implementation capacity)

- Depends on the potential, capital and ability to exploit capital of the enterprise.

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- Depends on the stock situation of raw materials or imported goods.

- Depends on the organization's ability to implement the stages in the operation process.

Import operations: applying for licenses, renting means of transport...

Of the above factors, the most obvious effect is shown through the choice of import method, payment in import and the Incoterms conditions used. Choosing the most effective method is important when negotiating and signing a contract.

* Import business method

To increase import and export turnover, a business often applies many different import and export business methods. The following are common import business methods:

- Direct import

- Import on consignment

- Import and exchange goods

- Joint venture import

- Temporary import for re-export

…

Each method has its own advantages and disadvantages. Depending on the characteristics of each business situation, choose the appropriate import business form that brings the highest economic benefits.

Objectives of analyzing import situation by business method:

- Through statistical analysis methods, economic analysts evaluate to point out the successes and limitations in using import business methods of enterprises.

- Research the factors affecting the use of import business methods by enterprises. In reality, enterprises often rely on the following factors to decide which import business method to use:

+ Depends on import market

+ Depends on the business conditions of the enterprise

+ Depends on import business experience

+ Depends on the level of staff working in import-export business: level of understanding of the market, understanding of information related to import activities such as information about sellers, buyers, prices...

- The third objective is that the analyst must propose solutions to improve the efficiency of using import business methods.

In short, analyzing the import situation according to business methods helps managers better grasp their import business capacity, thereby building a comprehensive import business strategy.

* International payment methods used

Economic aspects of using international payment methods in imports:

There are many international payment methods used in foreign trade, of which there are 4 most popular payment methods that Vietnamese businesses often apply:

- Payment method (Clean collection, D/P, D/A)

- Payment method money transfer (MT, TT)

- Payment method: cash on delivery (CAD)

- Payment method: Letter of Credit (L/C)

Each method has its own advantages and disadvantages with different payment costs and payment security that affect the efficiency of import activities. The payment methods that are beneficial to importers are: collection, deferred payment, revocable L/C, Stand-by L/C...

Economic factors affecting the choice of payment method:

- The business power of the enterprise. The party with more power often chooses a more advantageous payment method (power is expressed through exclusive purchasing power).

- Depends on the economic or organizational relationship between the buyer and

sell.

- Negotiation skills.

- Value of the deal.

- Depends on the reputation of the business partner.

- Depends on the understanding of import-export business staff about the

Payment method: security, payment organization operations, payment service fees...

Analysis objectives:

- Use statistical analysis methods to evaluate the use of international payment methods in import activities of enterprises over the years to draw out the advantages and limitations of enterprises in using payment methods.

- Research objective and subjective factors affecting the use of payment methods in the company's import activities.

- Propose solutions to improve the efficiency of using payment methods in import activities.

* Incoterms trade terms

Economic aspects of using Incoterms in import and export activities:

Incoterms are common international trade practices compiled by the International Chamber of Commerce (ICC), building them into a scientific document. In international business, the choice of trade terms depends on the following factors:

- Objective factors:

+ Depends on the State's mechanism and policies on encouraging the use of domestic services in transportation, insurance, etc.

+ Depends on how to determine export tax, import tax based on which trade conditions? For example, in Vietnam, enterprises in export and import activities rarely use trade conditions FCA, CPT, CIP, DES... because export tax is calculated according to FOB terms, import tax is calculated according to CIF trade conditions.

+ Depends on the type of transport chosen.

+ Depends on the business's habit of using commercial terms.

+ Depends on the way the goods are packaged

- Subjective factors:

+ Depends on the business position and strength of the enterprise. The side with stronger position and strength will gain more favorable trade conditions.

+ Depends on the capacity and experience in performing tasks related to import and export of goods: renting means of transport, purchasing cargo insurance, doing customs procedures...

+ Depends on import-export business level: understanding of trade conditions, negotiation skills...

+ Depends on the chosen import business method

Objectives of analyzing import and export situation according to trade conditions:

- Using analytical, statistical, expert and empirical methods, point out the successes and limitations in using Incoterms trade conditions in import activities.

- Research objective and subjective factors affecting the use of Incoterms in import activities.

- Propose solutions to improve the efficiency of using trade conditions in import activities.

3. Assess the import situation according to the structure of imported goods

* Objective of analyzing import situation by commodity structure:

- Analysts collect information on import situation of each main import item (if the enterprise has too many items, they will group them into product categories) and create tables and economic indicators for analysis.

- Evaluate to draw out the successes and difficulties in each business item.

- Propose solutions to promote imports for each product.

* Research significance:

Evaluating the structure of imported goods is very important in analyzing and evaluating the efficiency of a business's import activities. An import business is effective when the structure of imported goods develops in breadth and depth. Broad development is to increase the number of imported goods. In-depth development is to develop in the right direction of the company, the expansion achieves high economic efficiency. Businesses should not overestimate breadth or depth development but need to combine both to achieve sustainable efficiency.

4. Assess the import situation according to the import market structure

* Objectives of import market content analysis:

- Evaluate the advantages and disadvantages of import activities in each market that the business intends to penetrate.