What Is Import-Export Accounting? Posting Processes, Journal Entries, and Entrusted Trade

Vũ Khôi

Author at Wotech Electronics Blog

Alongside the development of international trade, exchanging, buying and selling, and handling import–export transactions and contracts play an increasingly important role in a business's operations and in managing goods and cash flows. Import-export accounting is an indispensable link in any international trade–logistics activity. So what is import-export accounting? How is import-export accounting carried out? The article below will give you an overview of import-export accounting, including: the concept, job duties, and the accounting process for each specific type of transaction under Circular 200.

What Is Import-Export Accounting?

Concept

Import-export accounting is the work involved in posting import-export documents such as tax payment vouchers, bills of lading (transport–logistics documents), and payment documents. It aims to ensure that the quantity and value of imported and exported goods are delivered and performed in accordance with the commitments of the international commercial contract.

In addition, import-export accounting is responsible for tracking and supervising payment status between the contracting parties under the contract, in accordance with international commercial rules — accurately and completely for each shipment and each stage of transport. Through this, businesses can promptly grasp the sales situation of each item in both quantity and quality. Through import-export accounting, businesses can easily manage the figures and documents on import-export activities in order to analyze and check financial indicators for planning and future business capital development.

In practice, there are several different import-export accounting methods, including:

• Direct import-export accounting.

• Entrusted import-export accounting.

• Mixed import-export accounting.

What Does an Import-Export Accountant Do?

Basically, import-export accounting work consists of the following main duties:

• Processing and checking import-export dossiers and documents, customs clearance, goods inventory, etc.

• Regularly updating foreign exchange rates and monitoring bank transactions.

• Carrying out procedures to open a Letter of Credit (L/C) or remit funds by Telegraphic Transfer (T/T) for imported and exported goods.

• Processing and resolving document sets that do not comply with regulations, to clear customs and release goods from the port.

• Compiling the complete import-export document set as the basis for the bank to collect payment on the company's behalf.

• Fulfilling the obligation to pay import-export taxes to the State budget.

• Handling exchange rate differences arising at the end of the period and posting them to the books and the accounting software.

• Urging and tracking the collection of receivables from customers.

Methods of Accounting for Imported and Exported Goods

To ensure completeness and accuracy in performing import-export accounting, refer to the import-export journal entry guide under Circular 200 for each of the following transaction processes:

The Accounting Process for Exported Goods

Based on the Export Document Set

On the basis of the export document set — comprising the commercial invoice, VAT invoice, purchase order, delivery order, contract, customs declaration, and papers proving the goods meet export conditions — post the entries as follows:

• Record revenue

• Debit account 112 – Cash in bank (if the customer pays immediately).

• Debit account 131 – Trade receivables (if the customer has not yet paid).

• Credit account 511 – Revenue.

• Credit account 333 – Taxes payable to the State budget (detailing the types of export tax payable, if any).

• Record cost of goods sold

• Debit account 632 – Cost of goods sold.

• Credit accounts 156, 158 – Merchandise, bonded warehouse goods.

Notes:

• For goods exported abroad, no VAT invoice is needed — only a commercial invoice.

• Track and post in the correct currency of the transaction, then convert to VND at the actual exchange rate prescribed in Circular 200/2014/TT-BTC.

Based on Logistics Invoices

On the basis of invoices for goods handling costs, declaration opening costs, and shipping costs from logistics companies or agents — calculated from the time the goods leave the warehouse until they are delivered to the customer — post the entries as follows:

• Debit account 641 – Selling expenses.

• Credit account 331 – Trade payables.

Based on Export Tax Payment Vouchers

• Where there is an export tax payment voucher, post as follows:

• Debit account 333 – Export tax payable to the State budget (specifying the type of export tax payable).

• Credit accounts 111, 112 – Cash on hand, cash in bank.

Based on Sales Payment Receipts or the Bank's Credit Advice

• Debit account 112 – Cash in bank.

• Credit account 131 – Trade receivables.

Notes:

• Normally, exported goods are paid for in foreign currency. Therefore, the export accountant must record the foreign exchange rate differences arising at payment.

• Where an exchange rate gain arises, post it to account 515.

• Where an exchange rate loss arises, post it to account 635.

• At the time of preparing the year-end financial statements, the exchange rate of the monetary item corresponding to the Debit balance of account 131 must be revalued.

• If an exchange rate gain arises, the accountant posts it to account 515.

• If an exchange rate loss arises, the accountant posts it to account 635.

Based on Payment Vouchers for Expenses Paid to Agents and Logistics Companies

• Debit account 331 – Trade payables.

• Credit accounts 111, 112 – Cash on hand, cash in bank.

The Accounting Process for Imported Goods

Based on the Import Document Set

On the basis of the import document set — comprising the packing list, commercial invoice, bill of lading, customs declaration, purchase order, and papers proving the goods meet import conditions — post the entries as follows:

• Debit account 151 – Goods in transit (if the goods have not yet arrived at the warehouse).

• Debit accounts 156, 158 – Merchandise, bonded warehouse goods (if the goods have arrived at the warehouse).

• Credit account 331 – Trade payables.

Note: Track and post in the correct currency of the transaction, then convert to VND at the actual exchange rate prescribed in Circular 200/2014/TT-BTC.

Based on the Tax Payment Document Set at the Import Stage

On the basis of the import tax payment document set — comprising the customs declaration, payment request, and State budget remittance slip — post the entries as follows:

• Post import tax and special consumption tax at the import stage

• Debit accounts 151, 156 – Goods in transit or merchandise.

• Credit account 3333 – Import tax.

• Credit account 3332 – Special consumption tax.

• Post VAT on imported goods

• Debit account 133 – Deductible value-added tax.

• Credit account 33312 – VAT on imported goods.

• Post the payment of import tax, VAT, and special consumption tax on imported goods

• Debit accounts 3333, 3332 – Import tax, special consumption tax.

• Debit account 33312 – VAT on imported goods.

• Credit accounts 111, 112 – Cash on hand or cash in bank.

Based on Logistics Documents

On the basis of logistics documents related to the import costs of the shipment — calculated from the time of ordering until the goods are entered into the warehouse (VAT invoices from carriers, logistics agents, and customs authorities) — post the entries as follows:

• Debit accounts 151, 156 – Goods in transit or merchandise.

• Credit account 331 – Trade payables.

Note: Allocate the logistics costs to each item code of the imported shipment by the criterion of allocation by value or by quantity, allocated in full or in part, depending on the actual circumstances.

Based on the Payment Documents for the Imported Shipment

• Debit account 331 – Trade payables.

• Credit accounts 111, 112 – Cash on hand or cash in bank.

Notes:

• Where transactions arise under the L/C payment method, they must be posted through account 244 – Pledges, mortgages, deposits, and security deposits.

• Normally, imported goods are paid for in foreign currency. Therefore, the import accountant must record the foreign exchange rate differences arising at payment.

• Where an exchange rate gain arises, post it to account 515.

• Where an exchange rate loss arises, post it to account 635.

• At the time of preparing the year-end financial statements, the exchange rate of the monetary item corresponding to the Credit balance of account 331 must be revalued.

• Where an exchange rate gain arises, post it to account 515.

• Where an exchange rate loss arises, post it to account 635.

Based on Payment Vouchers for Logistics Fees

• Debit account 331 – Trade payables.

• Credit accounts 111, 112 – Cash on hand, cash in bank.

Conclusion

Above is the basic overview of import-export accounting work. We hope this article has shared the knowledge and experience you need to do import-export accounting well. If you have any questions or need further advice on import-export accounting software to support your work effectively, don't hesitate to contact SimERP right away!

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