Joint Circular No. 970-LB guiding the implementation of the unification of accounting and statistical organization in industrial enterprises

JOINT CIRCULAR

Guidelines for Implementing the Unification of Accounting and Statistical Organization in Industrial Enterprises

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Pursuant to Decision No. 233-CP dated December 1, 1970 of the Council of Ministers promulgating the Reporting System for Official Periodic Statistics and Accounting of Industrial Enterprises;

Pursuant to Resolution No. 02-CP dated January 2, 1971 of the Council of Ministers on the Reorganization of the Economic Information System (specifically regarding the statistical and accounting information system);

Pursuant to Decree No. 176-CP dated September 10, 1970 of the Council of Ministers, replacing Chapter III concerning the Chief Accountant – in the Charter of State Accounting Organization;

Pursuant to Directive No. 11-TTg dated January 9, 1970 of the Prime Minister, part concerning the organization of accounting and statistics at the grassroots level;

The Ministry of Finance and the General Statistics Office provide guidelines for implementing the unification of accounting and statistical organization in industrial enterprises as follows.

I. THE NECESSITY OF UNIFYING THE ORGANIZATION OF ACCOUNTING AND STATISTICS IN STATE INDUSTRIAL ENTERPRISES

Up until now, accounting and statistical work in enterprises has been directed by two departments: the planning department directs statistical work, while the financial accounting department directs accounting work. Such division of direction has led to the separation of accounting and statistical work in terms of organization, limiting the enhancement of centralized unity, accuracy, and timeliness of unified accounting materials in enterprises.

The initial recording system in enterprises (including forms issued jointly by the General Statistics Office and the Ministry of Finance, and additional forms proposed by the enterprise director and approved by the General Statistics Office) being directed by two departments is unreasonable; there is overlap and inconsistency in guidance on how to record, causing difficulties for those who record.

Each economic phenomenon and process should ideally be recorded only once, accurately according to principles and methods, then transferred along a single centralized and unified channel, ensuring rapid, accurate processing and summarization of materials, serving timely economic analysis and comprehensive accounting in the enterprise. However, currently, due to scattered direction, each phenomenon and the entire economic process often undergoes multiple recordings, wasting effort and reducing accuracy, leading to delays.

Intermediate books used in business accounting and statistical accounting, detailed lists and journal entries in accounting, if not uniformly directed by one department, will result in overlapping and inaccurate records (due to different calculation methods), causing delays in compiling summary reports.

The unified statistical-accounting report system, issued pursuant to Decision No. 233-CP dated December 1, 1971 of the Council of Ministers, includes a complete set of expenses, reflecting the interdependence between economic phenomena and processes. Therefore, it requires centralized unification in terms of calculation procedures to closely integrate the three types of accounting (statistical, technical operations, and accounting) in terms of documentation and books, thereby serving unified accounting in the enterprise promptly and accurately. If direction remains divided between two departments as before, the aforementioned unreasonable situation cannot be resolved.

Organizing separate accounting and statistical systems within an enterprise as previously done leads to the collection of data from the initial recording stage through intermediate bookkeeping stages to final accounting entries and books being divided into two channels, hindering the unification of various types of accounting in the enterprise.

Resolution No. 02-CP dated January 2, 1971 of the Council of Ministers emphasized the need to properly handle the information intake stage at the grassroots unit as follows: "It is necessary to pay special attention to scientifically organizing the economic information system within the enterprise, with the main focus on rationalizing the flow of statistical and accounting information within the enterprise, aligning with production processes and management systems."

The head of the grassroots economic unit is responsible for organizing internal information work in the enterprise for management purposes and for timely and fully completing unified statistical and accounting reports to higher levels, bearing responsibility for the accuracy of the data in the reports and the time stipulated in the reporting system.

To address these requirements, it is necessary to unify the organization of accounting and statistics in enterprises, aiming to:

- Unify the initial recording and management under one supervisory body, enhancing the accountability of the accounting machinery for initial recording work;

- Closely combine quantity accounting with value accounting;

- Eliminate duplicate data collection, improve accuracy, and create conditions for balancing and verifying data before submitting reports to higher levels;

- Create conditions for expanding internal enterprise economic accounting, daily business accounting of workshop, team, and production group activities;

- Create conditions for maximizing the productivity of those engaged in calculations and gradually mechanize calculations.

II. FORMS OF ORGANIZATIONAL STRUCTURE FOR ACCOUNTING AND STATISTICAL WORK AND PROCEDURES

1. On Principle. Merging the statistics and accounting departments into one department is a necessary condition to strengthen centralized and unified direction in terms of methods, systems, and data in implementing the unified statistical and accounting reporting system in enterprises.

These economic information data primarily serve production units, workshops, and subsequently support departments assisting the director, each level having different requirements; therefore, the chief accountant determines specific requirements from all parties, guiding accounting staff in workshops to collect data, record in intermediate books... to meet the needs of various departments.

Assigning responsibilities for report preparation to departments and offices in accordance with the characteristics of each enterprise is the prerogative of the director, as the director is accountable to the state for compliance with the unified statistical and accounting reporting system, responsible for the timeliness and accuracy of the data.

The establishment of reports by enterprises must be based on primary records according to the unified model issued by the Ministry of Finance - General Statistics Office. From the initial recorded data, through intermediate books, to the final accounting entries in the official accounting books, all matters shall be proposed by the chief accountant and executed upon approval by the director.

Heads of departments and sections within enterprises are responsible to the director for the establishment of reports within their management functions, directly assigning staff members to prepare reports for tasks they oversee.

Accounting personnel assigned by the accounting and statistics department to work at workshops are responsible for providing initial recorded data from workshops to staff members of various departments preparing consolidated reports. At the same time, workshop accountants base their work on initial recorded data and intermediate books to prepare certain necessary reports according to production management, labor management, and material and equipment management requirements of the workshop manager and the accounting and statistics department.

2. Regarding specific organization, this circular does not aim to fully allocate responsibilities but only outlines new allocation principles set forth by the unified statistics-accounting system.

In terms of name, after the merger of the statistical and financial accounting organizations, the new organization will be called the Accounting - Statistics - Financial Department.

In terms of structure, the Accounting - Statistics - Financial Department, besides the financial accounting units, also includes a comprehensive statistics unit. The number of staff in the comprehensive statistics unit may range from 2 to 5 people, depending on the scale of the enterprise and the complexity of the work involved. This unit assists the chief accountant in directing the initial recording methods and systems, preparing analytical reports on economic activities, supply and storage data balancing.

Additionally, the Accounting - Statistics - Financial Department has some dedicated accounting staff overseeing workshops, collectively referred to as workshop accountants. These staff members belong to the department's staffing but primarily work at workshops.

In other business departments and production workshops, there will no longer be dedicated statisticians, but rather, whoever specializes in monitoring a particular matter will be responsible for reporting on that matter.

3. Specific allocation between departments and sections:

The principle of allocating report preparation is that whoever monitors a particular matter should prepare the report on that matter. This principle aims to enhance the accuracy of data and strengthen the responsibility of departments and sections, promoting specialized staff to delve deeper into management work. Implementing this principle, discrepancies and data that do not match actual conditions will be promptly detected by specialized staff. On the other hand, through data consolidation, report preparation, analysis, and evaluation, specialized staff will become more proficient, aiding departments and sections in better understanding the situations under their management. To implement this principle, the director assigns each department and section the responsibility for preparing appropriate reports based on the purpose and requirements of each type of report related to their specialized functions.

Following the principle that the department or section monitoring a particular matter prepares the report on that matter, during the fourth quarter of 1970, enterprises improved their allocations as follows:

The Accounting - Statistics - Financial Department is responsible for preparing 17 reports:

- Report No. 1: Total value of output, value of goods output at fixed prices

- Report No. 2: Total value of output at current wholesale prices

- Report No. 3: Production and inventory of major products

- Report No. 13: Wages

- Report No. 20: Input, output, and inventory of raw materials and supplies (at the enterprise level)

- Report No. 21: Product distribution

- Report No. 23: Summary balance sheet

- Report No. 24: Increase and decrease in fixed assets and depreciation fund

- Report No. 25: Increase and decrease in basic capital

- Report No. 26: Costs for production management services

- Report No. 28: Comparable product cost and total product cost by item

- Report No. 29: Unit costs of major products

- Report No. 30: Factors affecting cost increases and decreases

- Report No. 31: Cash receipts and payments

- Report No. 32: Accounts payable

- Report No. 33: Consumption

- Report No. 34: Profit and loss and payments to the state budget

The Labor Organization Department is responsible for preparing 8 reports:

- Report No. 9: Personnel on payroll

- Report No. 10: Increase and decrease in personnel

- Report No. 11: Time utilization of production workers

- Report No. 12: Labor productivity

- Report No. 14: Work-related accidents

- Report No. 15: Training and supplementary training of workers

- Report No. 16: Quality of technical workers

- Report No. 17: Quality of scientific and technical cadres

The Mechanical and Electrical Department is responsible for preparing 4 reports:

- Report No. 6: Quantity and status of major machinery and equipment

- Report No. 7: Utilization of quantity and time of machinery and equipment

- Report No. 8: Productivity of major machinery and equipment

- Report No. 19: Supply and consumption of electricity

The Technical and Engineering Department is responsible for preparing 2 reports:

- Report No. 18: Technological innovations, production rationalization, and improvements in operational procedures

- Report No. 22: Material and energy consumption standards

The Supply and Transportation Department is responsible for preparing

- Report No. 39: External transportation

The Basic Construction Department is responsible for preparing 3 reports:

- Report No. 36: Implementation of investment funds for basic construction

- Report No. 37: Completed projects, value of fixed assets, and new capacity added

- Report No. 38: Actual costs of self-built projects

The Technical Inspection Department is responsible for preparing 2 reports

- Report No. 4: Product quality

- Report No. 5: Defective products

Enterprises should refer to the above allocation guidelines and apply them appropriately to the specific conditions of each enterprise. For enterprises without sufficient similar departments and sections, allocations should be made based on their actual structures. For example, if mechanical and engineering work is organized into a single department, then relevant indicators such as Reports Nos. 6, 7, 8, 18, and 19 will be prepared by that department; for enterprises without a basic construction department, Reports Nos. 36, 37, and 38 will be prepared by the basic construction accounting and finance unit within the Accounting - Statistics - Financial Department, etc...

In order for departments to fulfill their responsibilities in preparing reports assigned by the director, it is necessary to properly address the relationship and working procedures among departments around the director.

First, the accounting-statistics-finance department is responsible for providing initial recording data and necessary documents for other departments in preparing reports, with workshop accountants being the main intermediaries in providing initial recording data at workshops. Additionally, business departments must strictly follow the methods and regulations guided by the accounting-statistics-finance department, which have been approved and delegated by the director to the chief accountant.

Regarding the relationship and working procedures among departments, apart from coordinating to assist the director in fully implementing statistical and accounting reporting systems to higher authorities, departments must also cooperate to serve the director according to specific requirements for enterprise management.

4. Dedicated Workshop Accountant (referred to as the workshop accountant).

The workshop accountant is an employee of the accounting-statistics-finance department assigned to oversee workshops and primarily works at the workshop. The workshop accountant has the following duties and powers:

Regarding duties:

a) Ensuring the provision of data and information on economic phenomena and processes within the workshop; serving the workshop manager's daily production guidance, mainly concerning:

- Labor utilization situation,

- Equipment utilization situation,

- Material utilization situation,

- Production target implementation situation.

b) Daily collection and timely classification and consolidation of initial recording documents within the workshop to provide data and information for departments, aiding them in managing their operations daily, weekly, and monthly, and preparing reports as assigned by the director.

c) Preparing analysis reports on the implementation of the production plan of the workshop.

d) Depending on the situation, the workshop accountant may undertake the task of calculating production costs of the workshop and wages.

Regarding authority:

a) The workshop accountant is responsible for guiding and inspecting all workers and staff in accurately, promptly, and completely recording initial data according to established regulations.

b) The workshop accountant is responsible for assisting the workshop manager in effectively managing the workshop, and has the right to request the manager to assign tasks and supervise everyone in the workshop to comply with initial recording regulations within the workshop.

To perform their primary functions well, the workshop accountant has the right to refuse to undertake other work until they have completed the aforementioned tasks.

This Circular guides the main issues in unifying accounting and statistical organization in large and medium-sized state-owned enterprises. Smaller enterprises (such as some local industrial enterprises) and dispersed production enterprises (such as fishing enterprises and timber extraction forest farms) may apply the general solutions above appropriately for each type of enterprise. If necessary, report to the Ministry of Finance and the General Statistics Office for supplementary guidance.