Accounting for Public and Private Preschools

Vũ Khôi

Author at Wotech Electronics Blog

Unlike other types of businesses, education — and schools in particular — is a special kind of operation that receives preferential tax support from the state. That is why school and educational institution accounting staff, beyond a certain level of professional knowledge, need to clearly understand the education and training sector and its operations in order to work effectively.

Accounting in the Education Sector

The Specifics of Accounting at Schools and Educational Institutions

Under Decree No. 218/2013/ND-CP:

A preferential 10% tax rate for the entire operating period applies to: corporate income from socialized activities in education – vocational training, healthcare, culture, sports, and the environment (known as socialized sectors).

Teaching and vocational training services as prescribed by law — including foreign language instruction, IT training, and teaching dancing, singing, painting, and specialized knowledge — are exempt from VAT.

Classification of Accounting in the Education Sector

Schools and general education institutions such as preschools, primary schools, middle schools, and high schools are classified by grade level. Depending on each school's rules, accounting staff will record revenue and expenses by grade.

Other training centers can be classified by training class, course, and so on, for easier bookkeeping.

Accounting staff at schools and educational institutions are responsible for completing the following tasks:

• Checking documents and records, updating the system, and archiving documents for data retrieval when needed. Proposing solutions if there are document-related errors.

• Calculating, recording, and reporting the unit's expenses and transactions, such as: machinery and equipment costs, classroom rental costs, learning material costs, and so on.

• Keeping the books, filing taxes, and preparing financial statements for their unit.

• Monitoring, checking, and managing the safeguarding of the unit's assets.

How Accounting Works in the Education Sector

Under Circular 133/2018/TT-BTC, accounting at schools is carried out specifically as follows:

– Labor cost accounting: salaries of lecturers, teachers, and staff, plus social insurance (BHXH), health insurance (BHYT), and other calculations.

• Debit Account 154

• Credit Account 334

– General expenses: clothing and uniform costs.

• Debit Account 154

• Credit Account 111

– Tool allocation costs: machinery and equipment valued under 30 million VND.

• Debit Account 154

• Credit Account 242

– Fixed asset depreciation costs: machinery valued above 30 million VND.

• Debit Account 154

• Credit Account 214

– Electricity, water, telephone, sanitation, and similar costs belonging to different faculties, departments, or units are recorded as:

• Debit Account 154 — Production and business costs

• Debit Account 133 — Deductible VAT (if any)

• Credit Accounts 111, 112, 331…

– Other cost accounting: staff training and development costs, repair and maintenance costs, venue and office rental costs, purchased service costs, and other cash expenses are recorded as:

• Debit Account 154 — Production and business costs

• Credit Accounts 111, 112, 331…

– Headquarters and office rental costs: because these serve service provision over multiple periods, accounting staff must allocate them gradually into business costs within the period. When paying, record:

• Debit Accounts 142, 242

• Credit Accounts 111, 112

– When allocating, record:

• Debit Account 154 — Production and business costs

• Credit Accounts 142, 242

– Service closing entries:

• Debit Account 632

• Credit Account 154

School Accounting

General Duties of School Accounting

To fulfill their function, school accounting staff must master the following basic tasks:

• Compiling and processing accounting information and figures in line with actual transactions.

• Monitoring and managing financial receipts and payments, debt payments and settlements. Managing asset usage, detecting and preventing violations of financial and accounting laws.

• Analyzing accounting information and figures, tracked continuously from the moment they arise until the school's accounting and financial activities conclude.

• Preparing the school's short-, medium-, and long-term accounting and financial plans.

• Organizing accounting information in an orderly, systematic way. Preserving and archiving records, documents, and books related to accounting and financial work as required by law.

• Performing any additional tasks assigned by the school.

Detailed Duties of School Accounting

To fulfill their responsibilities and excel at assigned tasks, school accounting staff need a firm grasp of the following areas:

• Cash and materials accounting

Reflecting the school's overall assets, recording budgeted receipts and payments. Continuously checking and managing increases and decreases in materials, and handling the funds received each period.

• Fixed asset accounting

Fixed assets have a usage, recovery, and turnover period of over one year or over a given cycle, so depreciation, sales, operation, and upgrades of fixed assets, materials, and tools used in teaching must be tracked.

• Revenue accounting

Accounting staff must record revenues — such as student tuition fees and construction contributions — fully, clearly, and accurately.

• Expense accounting

Ensuring information is accurate and timely is the most basic and important principle of accounting. In particular, expenses such as classroom equipment maintenance, student gifts, and school-organized events must all be entered in the books.

• Salary and insurance accounting

Calculating salaries for teachers and staff within the school. Health insurance (BHYT), social insurance (BHXH), and other proposed and collected insurance services must also be recorded.

• Funding source accounting

Booking funding sources such as allocated funds and money raised by the parents' association. Operating funds, project funds, and so on must all be recorded accurately by accounting staff, in compliance with the law.

• Closing entries, bookkeeping, and financial statements

At period end, accounting staff total up the detailed accounting ledgers and cards, and on that basis prepare summary tables for each item to reconcile with the general ledger. These figures are then used to prepare financial statements.

Recording economic and financial transactions at the right time and per regulations. Every journal entry must be accurate and lawful, so the financial statement is complete and fully reflects the unit's situation.

Preschool Accounting

Preschool accounting is the application of accounting regimes to record transactions related to revenue, expenditure, and budgeting. It is the advisory function that helps the school organize and manage its accounting and financial work under state regulations.

Public Preschool Accounting

Below are the duties of a public preschool accountant:

• Compiling and providing accounting information and data as required by law.

• Preserving and archiving records, books, and documents related to accounting and financial work as required by law.

• Monitoring and cooperating in the training and development of the school's accounting team.

• Checking and supervising budget revenues and expenditures, collection obligations, remittances, and debt payments; checking the management and use of assets and capital; detecting and preventing violations of accounting and financial laws.

• Analyzing accounting data; advising and proposing solutions to support the accounting unit's management work.

• Drawing up and executing short-, medium-, and long-term financial plans.

• Participating in the emulation and rewards council, asset inventory and liquidation, scholarship review, bidding, and other group activities within the school.

• Performing preschool meal fee accounting.

• Performing other tasks as assigned by the school.

• Collecting and processing accounting information and data in line with standards and legal regulations.

Private Preschool Accounting

• Checking and reconciling accounting information, data, and detailed versus consolidated figures between internal departments.

• Making journal entries for transactions arising at the preschool under current regulations.

• Preparing receipts and payment vouchers for tuition and administrative expenses at the school, and monitoring and controlling the school's funds.

• Checking and reconciling the balance between consolidated and detailed accounting figures.

• Checking closing balances to ensure they are consistent with detailed reports.

• Checking and supervising financial receipts and payments, collection obligations, remittances, and debt payments; monitoring the management and use of assets and the sources that form them; detecting and preventing violations of accounting and financial laws.

• Proposing provisions and handling uncollectible receivables across the organization.

• Accounting for income, expenses, fixed asset depreciation, receivables, VAT, and tax reporting for the school's office division; consolidating data and preparing the office's financial settlement.

• Tracking the office division's receivables and managing receivables across the whole organization.

• Preserving and archiving records, books, and documents related to accounting and financial work in strict accordance with the law.

• Providing information and data to the unit's leadership upon request.

• Explaining figures and providing records and documents to the tax authority and auditors as required by the head of the accounting and finance office.

• Calculating monthly salaries for teachers and staff at the unit.

• Preparing periodic financial statements and detailed explanatory reports.

• Making closing entries to process expenses at the end of the fiscal year.

• Carrying out closing entries into the books and financial statements at period end.

• Recommending effective financial management solutions.

Guide to Accounting for Preschool Meal Fees

– When collecting money, record:

• Debit Accounts 1111, 1121

• Credit Account 531 (detailed by revenue item)

– When spending, record:

• Debit Account 152

• Credit Account 1111

– When issuing for use, record:

• Debit Account 6422

• Credit Account 152

– At year end, make closing entries:

• Closing revenue:

• Debit Account 531

• Credit Account 911

• Closing expenses:

• Debit Account 911

• Credit Account 6422

Conclusion

Those are the fundamentals of school accounting, with its distinct characteristics that accounting staff need to pay attention to. Contact SimERP right away and let us support you if you face any difficulties operating and managing your organization!

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