Rationale report group2ac alibaba english centre

HANOI UNIVERSITY
FACULTY OF MANAGEMENT AND TOURISM

---o0o---

CAPSTONE PROJECT 2022

EXPENSE MANAGEMENT AT

ALIBABA ENGLISH CENTRE

Rationale report_Group 2AC

Mentor: Mrs. Do Van Anh
Members:
Nguyen Thi Hong Van 1704010124

Cao Thu Huyen 1804010043

Ngo Thi Huyen 1804010047

Dang Thi Khanh Linh 1804010056

_May 23rd, 2022_

Table of Contents

Abstract........................................................................................................................................... 4
1.Introduction................................................................................................................................ 5
2.Company introduction .............................................................................................................. 5

a. Brief history ........................................................................................................................... 5
b, Vision and Mission ................................................................................................................ 6
c, Organisational structure....................................................................................................... 6
3. Problem Statement.................................................................................................................... 7
4. Literature review ...................................................................................................................... 8
4.1. Expense management in small and medium-sized businesses. ...................................... 8
4.2. Expense management for English-teaching centres in Vietnam.................................... 9
4.3. Recording expenses under VAS standard...................................................................... 10
4.4. Administrative expenses. ................................................................................................. 10
4.5. Salary expense management. ......................................................................................... 10
4.6. Commission expense management. ................................................................................ 13
5. Method of inquiry ................................................................................................................... 13
5.1. Interview question designs............................................................................................... 13
5.2. Data collection .................................................................................................................. 15

5.2.1 Lecturer and teaching assistant responses ............................................................... 15
5.2.2 Response of company’s management team .............................................................. 17
5.2.3. Response of CEO ....................................................................................................... 17
6. Results of the projects............................................................................................................. 18
7. Action plans ............................................................................................................................. 22
7.1. Hiring an accountant. ...................................................................................................... 22
7.2. Building up Accounting Department ............................................................................. 23
7.2.1. Mission and function ................................................................................................. 23
7.2.2. Plans for recruitment of Accounting Department .................................................. 24
7.3 Administrative expenses ................................................................................................... 24
7.3.1. Photocopy expenses ................................................................................................... 24
7.3.2. Policy on expenses incurred in the course. .............................................................. 25
7.4. Salary expenses ................................................................................................................. 26

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7.4.1. Fingerprint or card time attendance ....................................................................... 26
7.4.2. MISA (ASO) ............................................................................................................... 26
7.5 Commission expenses. ....................................................................................................... 29
8. Conclusion ............................................................................................................................... 31
REFERENCES............................................................................................................................ 32
APPENDIXES ............................................................................................................................. 33
INTERVIEW QUESTIONS ...................................................................................................... 38

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Abstract
Through 7 years of operation (2015-2022), Alibaba English Center has achieved
remarkable and rapid growth in the number of students over 40,000. One of the top
concerns of businesses is cost control. Expense management is a critical factor
since it also drives the company’s performance, particularly in SMEs and in
periods of difficulty, specifically two years of Covid-19. Alibaba English Center is
a medium-sized company, so the center also exposes to common problems of weak
cost management. For this reason, to support the company strengthen its brand,
stay competitive in the market, and maintain strong performance, cost management
is now a top priority for the center's management. This project aims to improve the
cost management system at one of the famous English Centers in Vietnam, which
is Alibaba English Center. Cost issues, the impact of costs on the organization's
goals will be shown in the project. This project aims to assist the company in
solving cost-related issues, namely administrative costs, commission costs and
salary costs. Data are collected from the company to identify the problem existing
in cost management system through interviews with managers and staff, direct
observations of the process, and review relevant documentation. Despite the
difficulties of mutual trust between the team members and the CEO of Alibaba
company, we expect to develop certain convenient tools and procedures to assist

the management in controlling costs. Thereby, we have come up with action plans
such as using more MISA accounting software, using timekeepers, setting up an
accounting department and having specific policies.

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1.Introduction
General and administrative expenses are expenses incurred in the process of organizing
business activities that such enterprises have to spend to operate their business. Enterprise
administration costs are related to all activities of the enterprise, not separate for each specific
activity. At the same time, depending on how the business operates, the administrative costs also
vary. Consequently, what most directors are keen on is the means by which to deal with this
expense in the most sensible manner for their business.

Enterprise management is a job that requires administrators to understand the
organizational structure and standardize the management process as well as optimize the cost of
effective enterprise management to bring greater profits. In order to maximize profits, each
business must maximize revenue and minimize costs. For many businesses, administrative
expenses account for a small proportion. One of the important keys to help businesses manage
business costs effectively is to determine business management norms.

This is the basis to help businesses make operating estimates because in order to make a
labour cost estimate, there must be a norm of man hours, and the cost of raw materials must have
a norm of raw materials. In addition, it also helps managers control business activities of the
enterprise because normative costs are the standard, the basis for evaluation, and contribute to
timely information for managers to make daily decisions such as pricing a product, accepting or
rejecting an order, analyzing profitability. More specifically, it attaches the responsibility of each
employee to the economical use of resources.

Good corporate cost management will help businesses operate effectively, optimize

unnecessary costs, and control the finances of the business.

Up to the present time, the company is facing difficulties in managing cost sources
including: salary costs, administrative costs and bonus expenses.

Therefore, our solution for the company is to immediately hire an employee to record
expenses incurred at the present time, in the next 1 month, set up complete accounting department.
The company should buy a printer to serve the necessary documents for the teaching process. In
addition, timekeepers should be installed at 4 locations. In particular, the company must issue
policies on commission costs, administrative costs and salary policies.

2.Company introduction
a. Brief history

Alibaba English - the company that we conduct research in is a limited liability company
with its headquarter at 186 Giai Phong, Hanoi, founded by Mr. Ngo Xuan Thang. The company
was established in August 2015 with a development path of nearly 7 years so far. After 2 years of
operation, up to 2017, Alibaba reached the top 100 typical young businesses in Vietnam. Up to
now, Alibaba has become the largest English centre in Hanoi with more than 40,000 students and
it is also a language centre that has the cheapest tuition fee in Hanoi. After 6 years of establishment,

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the company has now expanded to 7 facilities with 4 facilities in Hanoi, 2 facilities in Nghe An
and 1 facility in Saigon. The focus that our team wants to study is on facilities in Hanoi. The
training system at the company includes pronunciation, grammar, communication and TOEIC. In
addition to training knowledge about industry transfer, the centre also integrates teaching students
about critical thinking, creative thinking, presentation skills and teamwork, more specifically and
also the brightest point. Alibaba's is a dynamic environment that is different from other English
centres.

b, Vision and Mission

Since the company's establishment, the company has brought with it the desire of the
founder of the company to bring English into the universal language for Vietnamese people in the
current economic context of economic integration and globalisation, with the mission of helping
one million students to speak English as their mother tongue. Moreover, Alibaba also has a mission
to build a strong English community and constantly strives to combine with leading partners in the
field to create opportunities and a better future for Vietnamese people.
c, Organisational structure

In order for the company to operate flexibly, the organizational structure plays a very
important role. Alibaba has a team of extremely young, dynamic and enthusiastic employees, the
whole company up to now has about 150 employees. Organizational structure of one member
limited liability company. Mr. Ngo Xuan Thang is the owner and director of the company, who is
responsible for the debts and related property obligations of the company within its charter capital.
The company has 4 main departments including marketing department, recruitment department,
training department and sales department.

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3. Problem Statement
Our team's target community will focus on the Alibaba English Center for all ages who
want to learn with a focus on everyday communication as well as in-depth communication. Alibaba
English Center was established in 2015, after 7 years of operation, the center has 7 branches
nationwide and more than 40,000 students. With a system of training and teaching processes
focusing on basic daily communication for all ages, Ablibaba has affirmed its position in helping
students practice listening and speaking English in real life. However, when we went into the
company's management system, we found that there was a gap due to weak cost management. In
particular, in the management of administrative costs, salary expenses, commission expenses, there
are many weaknesses and loopholes that can lead to many serious consequences in improving the

development of the company later. After surveying and working with the company, we learned
that there is no specific accounting department who will be responsible for recording all kinds of
expenses and related documents. And when recording all kinds of expenses will be due to Mr.
NCH, holds the position of lecturer vs. cost control, after everyone uploads the data to a drive file
for comparison. Regarding salary, there will be an Excel file on Google Drive to control teaching
activities as well as expenses after a lesson. Moreover, when there are costs incurred, each
employee is responsible for uploading to Google Drive the invoice or photo for comparison and
payment to Mr. NCH. The Excel file would automatically calculate the amount of payables to
workers in the formula:

Payables to Workers= Salary (based on their claims) + Expenses paid by them in advance

Once Mr. NCH alone takes care of all the work related to the costs incurred, it will lead to
many loopholes. Furthermore, because there is no accounting department in Alibaba, Ms LA, an
employee of the sales department, is the trustful one to record the transactions in a journal based
on Drive file & based on Mr. NCH’s checking at the end of the month. However, Ms. LA violated
Circular 200 cost accounting principles because Mrs. LA does not actively record expenses at the
time of arising, but only records all expenses at the end of the month. Due to the lack of strict cost
management has led to the following consequences.

The first issue, based on firsthand observation after working in this setting for a long time,
is administrative expenses for which there is no dedicated person or cost /asset management
department. In fact, lecturers/employees buy materials, print articles, parties and bonuses
completely freely and upload expenses to Excel file, but this file is not paid too much attention.
Without a dedicated cash flow manager, photocopying, document printing, party money, bonuses,
and fines are just a few examples,and without a warehouse manager, it's impossible to keep track
of vouchers, duplicate paperwork isn’t processed, and anyone can come and go from the
warehouse. This leads to shady, unsubstantiated expenses, which can lead to a lot of shady,
fraudulent activity.

The second cost concern is that payroll costs are quite complex. In fact, lecturers and staff
will automatically report the working day on an Excel file. We found that Mr. NCH was both a

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teacher and a salary checker through his practical experience working at the company and looking
through Alibaba's financial documents when asked by this group.

Finally, according to company policies, you will be paid a commission if you recommend
others to join the trial course. About how to calculate the commission for each person, each
employee has contributed to the company as cumulative points and the employee self-declares his
contribution in the Excel file. However, three incidents of employees generating bogus emails to
register for a trial course were uncovered by December 2019, and those three employees were also
in charge of reviewing enrolled students. As a result, I was able to deceive the number of students
that signed up for a trial lesson in order to collect a commission. The CEO has not yet discovered
a complete solution to the two challenges outlined above.

This project will provide a way to solve the problems of cost management in the most
appropriate way from our team's point of view. This is the foundation for assisting firms in making
operating estimates, as a labor estimate requires a norm of man-hours, and a norm of raw materials
necessitates a norm of raw materials. Furthermore, because standard expenses are the basis for
evaluation, it assists managers in controlling business activities of the organisation by providing
timely information for managers to make daily decisions, such as pricing a product, accepting or
rejecting orders, and reviewing profitability. More specifically, it ties each employee's
accountability to the efficient use of resources. It will positively affect the aspect of the community
in the long run. A positive effect on the organisation is that it will help the company understand
the costs of money coming in and out, easy to manage as well as reasonable allocation without
wasting money. Alibaba will be able to operate more efficiently, reduce superfluous expenses, and
keep track of its finances with good corporate cost management.

4. Literature review
4.1. Expense management in small and medium-sized businesses.
In traditional accounting for costs, it is assumed that fixed costs are independent in the
level of activity and variable costs change proportionately according to the changes in the level of
activity. Costs should be divided into fixed and variable ones Most management accounting
expects that the proportion between costs and activity refers that a 1% increase in activity results
in a 1% increase in costs, and a 1% decrease in activity results in a 1% decrease in costs (Allen,
2007).

Cost management is a comprehensive index to measure the level of enterprise management.
Generally, firms with limited access to capital have higher internal costs including salary and rental
expenses. There are two categories in processing costs which are rational decision-making and
motivational. The rational decision-making treats expense as a consequence of weighting costs
and economic benefits. The other is motivation and stimulations, providing incentives to work, for
example perks and bonus. In some companies, rewarding staff for firm performance improvement
has now become a common practice. However, because some of the expenses are variable,

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decision-making processes by management are put in several difficulties, which requires critical
information (Rougnaghi, 2017).

Today, many firms manage their costs by utilising available resources such as hyman,
machines and land. When current operation results are not good as expected, it is the manager's
critical decision whether to maintain those resources and keep the cost capacity in the short-term
or immediately cut those. Unfortunately, most information related to expenses that managers
receive is mainly from financial statements while a business can have various expense behaviors.
It was long believed that administrative, general and selling costs vary according to activity level.
However, recent experimental studies have revealed evidence that the reduction in costs may lead
to lower quality in sales processing in the future (Anderson et al, 2019) . Thus, in some cases, an

increase in costs can result positively in business activities. To decide firm cost and whether to
deduct expenses, it requires a long process of consideration and analysis before imposing those
costs to firms.

4.2. Expense management for English-teaching centres in Vietnam.
Truong Manh, a Vietnamese strategic manager, pointed out a common model for English-
teaching centres in Vietnam.

In his opinion, English-teaching centres in Vietnam commonly has to to financial issues
due to poor expense management. The cashflow indeed reflect the optimization of business
operations. Expenses are divided in 3 categories: marketing & sales expenses, managing and
controlling expenses and others. However, in Vietnam, English-teaching centres mainly assign a
specific person, usually known as an accountant to control both revenue and expense situations,
which is considered as the great lack of expenses management. Hence, there is a great risk of
monetary frauds. The founder is suggested to proceed with a short-term step which is to review all

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the transactions in the latest 2 months and then highlight those that may have least effect on the
business operation to judge and decide omitting those transactions in the future. Moreover,
expenses for human resources should be considered because efficiency and effectiveness require
a thorough judgement, which comes to be the common weakness in most English-teaching centres.
Employees are overpaid than their potentials, leading to over- expenses (Truong Manh, 2021).

4.3. Recording expenses under VAS standard.
Circular 200 applies to small to medium-sized enterprises with the scope of bookkeeping,
preparation and presentation of financial statements. Article 82 of Circular No. 200/2014/TT-BTC
defines that expenses are the accounts that decrease economic benefits and are recorded at the time
of occurring transactions or possibility of the future without already being paid or not (VAS,n.d).
Moreover, the matching principle, which requires revenues and any related expenses should be

recorded together at the same time, is also violated. In addition, it is expected that the account
should review evidence and reasonability for transactions by him or herself before recording, not
just by relying on the others’ opinions and judgement. Accountants should keep track of expenses
such as wages, raw materials, depreciation of fixed assets, etc. Moreover, expenses that are not
considered calculated in taxes according to the provisions of the Tax Law but have sufficient
invoices and vouchers and have been properly accounted for according to the current accounting
policy shall not be recorded as a reduction in accounting expenses but adjusted. in the tax
finalisation to increase payable corporate tax. All the expense accounts have no balance and at the
end of the accounting period, all expense accounts incurred during the period must be transferred
to determine business results (Vietnam Finance Law, 2014)

4.4. Administrative expenses.
Administrative expenses reflect directly on a company’s efficiency. Research from the
University of Texas shows that 82% of poor cash flow management leads to the failure of a small
or medium-sized business. The manager should review all office management tools to track the
costs better (Akerks, 2016). Business is an organisation comprising many individuals. Thus, there
is a high risk of shortage in controlling administrative expenses, especially some variable costs
like material printing, perks, and outside working expenses. In an English centre, main costs come
from studying material (Truong Manh, 2021). Some businesses have effective software and
managing tools to control, but most neglect the importance of this matter, which leads to loss of
the budget balance. It is assumed that those expenses are the hardest to control, thus being the
most-driven fraud (Styles et al, 2018). In Vietnam’s accounting system, administrative expenses
(TK 642) are clearly classified into details including taxes, fixed assets’ depreciation, expenses
incurred from conferences, research and training. In Alibaba’s case, the cost spent for printing
materials should be accounted for TK 6427 (Vietnamese Accounting System).

4.5. Salary expense management.
According to the internal auditing process for salary payables, Alibaba has now not
fulfilled all auditing duties, especially the matter of lack of duty segregation. There are 3 aspects
that need to be reviewed periodically: incurring salaries expenses, calculating methods and

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recording in the company. Internal control judgement helps businesses to identify possible
misstatements and potential risk factors. In terms of duty segregation, the managers or auditors
should proceed with internal control to check the segregated responsibility between human
resource department and accounting department. In addition, internal auditors should check labour
contracts, documents and company policies which authorise specific payroll and commissions to
review recruiting procedure, payroll agreement and the independence in 3 different processes
(reporting working hours, paying salaries and recording salary expenses). Moreover, payroll-
related models in the company should be reviewed to prevent frauds and risks in payroll and duty
completion confirmation and records. These are the most important functions because of its direct
and vast effects on salary expense management in the business (SCIC, n.d).

Today, with economic development, there is a need for towards-large-scale- companies for
building a firm salary management system. Salary management system has a more complete
definition than the word “salary management “itself. It is a combination of controlling human
resources and business operation as well as analysing company policy-making model and database
(Zhang et al, 2012)

Poor employee expense control can result in both employee dissatisfaction and higher cost
processing. Therefore, expense management has become a crucial corporate function nowadays.
In a research project, Suresh proposed using software as an effective way to manage the
employees’ detailed working days and working hours.

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(Captured from Suresh’s project, 2020)
Below are the weaknesses that may be caused due to the lack of duty segregation.

(Cited in an experiment from Audrey’s research, 2010)
Looking at the experiment, in most small to medium-sized businesses, one person is
assumed to be involved in many tasks. Restriction in human resources may limit the number of
employees, sometimes resulting in segregation of duties. In addition, management’s daily
involvement in material transactions can be related to mitigating segregation of duties issues. Thus,
a senior manager is required to be involved in all material transactions and directly involved in
financial reporting (Audrey, 2010). Audrey primarily suggested an additional management review
and reconciliations to boost internal controls. Moreover, if management review is internally
applied, managers should have appropriate knowledge for both accounting and understanding of
the underlying transactions that are being reviewed.
MISA is considered a good application which helps small to medium sized businesses to
control their expenses and utilise the business operation. The new updated version can serve better
business demand. Misa not only help accountants to record but also organise, regulate and control
the overall business. It reflects the situation of expenses. One of the distinct functions in MISA is
controlling salary. It allows various ways of calculating salary, tracing advanced payments,
insurance and the process of payroll payment.

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4.6. Commission expense management.
In an English-teaching centre, the driven target should definitely be sales that are English courses.
Therefore, performance-based commissions would be considered the best reward to motivate the
sales team for their work engagement. However, it could create an unhealthy competition in the
company (Water, 2005). A salesperson may cut corners and use tactics that contradict the
business's values just in order to grab the deals and thus receive their wanted commissions.
Occasionally, it is beneficial for the company when two or more salespersons work together as a
sales team. Different personnels support sales organisations to reach best solutions to identified
accounts. During the fiscal years, a company policy should be planned to utilise workforces and
thus, motivate sales products (Sales Management Association, 2010). Managers could find it hard
to handle team members who earn different amount. One of the key solutions is setting realistic

targets. To avoid conflict, the managers should proceed with regular one-to-one reviews to make
sure that all expectations are synchronised together. Furthermore, all managers need to check
whether their staff bring compliance with the company's values which are some signals of tricky
behaviours in order to get the fake deals. Otherwise, the company may suffer from the risk of
losing valued clients and deteriorating company's ethics and reputation (James, 2019).

5. Method of inquiry
5.1. Interview question designs
For the purpose of investigating the company, we carried out a thorough and qualitative
interview in order to go into the company's inventory management. Instead of questioning
everyone at the same time, we performed individual interviews with each employee to guarantee
neutrality and honesty, as well as willingness to provide personal information and thoughts about
the inventory management of the firm. We believe it is an excellent interview method that provides
the quickest and clearest responses, facilitating data collecting and assisting the team in swiftly
identifying challenges and solutions for the organization.

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On January 9, 2022 our team spent an evening researching and choosing together
businesses and companies to choose as a project. After 3 hours we decided to choose Alibaba
company - an English center specializing in teaching communication.

January 10 to 17 of the same year, we made an appointment with the CEO thanks to Ngo
Thi Huyen's relationship to be able to get preliminary access to the company and get a rough map
of the set company's computer and ask for permission to view the company's documents. After
obtaining the approval of the CEO, our whole team accessed social media platforms such as
websites, Facebook, fanpage to summerize about the company based on statistic about revenue,
expense, source of capital, profit, human resource training to find information about Alibaba
company more clearly. We spent the whole evening, about 4-5 hours, reading together and briefly
discussing the company.

On February 7th to 14th for about 2 hours every night to meet together to analyze profit of
company through financial statement & find some problems of company

Soon after, on February 15-20, we jointly did a preliminary survey and identified the
serious problem is poor expense management. At the same time, two of our members, Linh and
Van, went to the company's working and teaching locations to have a certain and most objective
observation about the company's working environment. After that, our whole team spent a session
designing the most reasonable interview questions and finding out the outstanding problems of the
company.

Unfortunately, because of the Covid19 pandemic, Cao Thu Huyen and Ngo Thi Huyen had
to set up an interview with the CEO and other employees online. Specifically, on February 21, the
two members spent about 2.5 hours talking to learn as well as interviewing the CEO with pre-
designed questions and applying quantitative interview style. Initially, the CEO of Alibaba refused
to provide much information related to the company's data for fear of leaking the company's private
companies. However, after we persuaded and discussed, he cooperated and we obtained a report
of costs incurred by facilities in Hanoi from 2018 to 2020. On February 23, two managers are Mr.
NCH and Mrs. LA, we spent about 2 hours for the interview. Thanks to the ingenuity in asking
questions as well as creating a pleasant atmosphere when chatting, we have successfully learned
some information that can help your project. we add more attractions. On February 26, we asked
the staff and teaching assistants' permission to spend 15-20 minutes on questionnaires and we
responded to employees' need to hide all identity information when doing questionnaires. Even
though I interviewed online, after the Covid19 epidemic, under control, C.T.Huyen and N.T.Huyen
still come directly to the company many times to interact with employees as well as find more
information and data on company issues.

When summarising all the interview responses, the whole team spent about 7 days (from
March 1 to 7) to develop project proposals. From March 8 to 15, we evaluated potentials and
drawbacks of problems.

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5.2. Data collection
5.2.1 Lecturer and teaching assistant responses
The survey was conducted by 35 people, including teaching assistants and lecturers. When
interviewed, they requested that their names be kept secret. The survey results can reveal a lot
about how experienced the majority of the company's lecturers are with their jobs. It can be seen
that 60% of the lectures who participated in the survey stated that they had been with the company
for 1 to 2 years, while more than one-fourth of the respondents stated that they had been with the
company for more than 2 years. This demonstrates that the majority of participants consider the
job to be full-time. According to statistics, nearly half of them chose this vacancy because of their
hobbies and interests, more than a third stated that they applied for the job due to financial
constraints, and 20% stated that they do not have any other better job options. With teaching
assistants, they often work at the company for less than a year and consider the job as part time.
When we ask about how to record their expenses, most of them usually fill in the Excel file for
their commutes and expenses incurred that day. Those expenses will be recorded on the file along
with the invoice. However, many expenses will not have invoices or verification documents such
as photocopying, document printing. Since the CEO doesn't provide payroll, we tried to collect the
salaries of some employees who are module-based by course. We would like to obtain the total
number of open courses from 2018-2020 by course type.
However, when lectures and staff self-record expenses as well as take attendance for
lessons, many problems arise. It is surprising that a large proportion of lectures in English centre
feel this expense record is not complicated and unreliable, with approximately two third of the
number of lectures. Because they can easily get into class without being late or having their pay
deducted. When lecturers forget to take attendance in the excel file, they can easily file a complaint.
They can provide a transcript of that day's session or ask students who attended the class to verify
it for them. The remaining lecturers feel that the way of recording expenses including salary and
other expenses is not reasonable, accounting for 35% of the total number of lecturers of the centre.
They feel that such an expense record will not be reliable enough and are likely to forge invoices.

They also pointed out that it may happen that many teachers do not hold the class that day but still
take attendance.

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To improve cost management, the chart has provided data showing the satisfaction level of
teaching assistants as well as lecturers. The large number of staff and lecturers feel rather satisfied
in the way of expense management, approximately 45%. The other found neutral in managing
expenses, they had no trouble recording their expenses, accounting for 20%. The remaining 35%
feel unsatisfied with such cost management. Inconvenient cost management, sometimes causing
staff and lecturers to confuse the total number of teaching hours as well as the incurred costs that
are not accurately recorded.

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5.2.2 Response of company’s management team
Regard to company’s management team which has two members : Mr.NCH and Mrs.LA,
Mr.NCH was both a teacher and a salary checker of the company; Mrs.LA is a sales department
employee, who is trusted to record the transactions in a journal based on the Drive file and Mr.
NCH's checking at the end of the month. When asked if they feel burdened while managing two
responsibilities at the same time, they still feel very good with the job they are in charge of. First,
they said that this is not a serious problem in the company and currently still managing costs well.
In their opinion, the criteria for calculating wages will be based on the number of hours which staff
and lecturers take attendance on file as well as previous expenses incurred. When asked about how
to evaluate salaries and expenses in the current company, they all felt that this method was quite
simple, easy to compare, and did not take too much time to review. However, when we asked about
previous cases of expense violations, Mr NCH and Mrs LA seemed hesitant. They also said that
the costs incurred by staff and lecturers are sometimes not known precisely because many expenses
(cash flow manager, photocopying, document printing, party money, bonuses, and fines) are not
clear, and do not have invoices to compare. Salary and management expenses are only checked

and checked at the end of the month, so sometimes mistakes happen, they can't be checked
correctly. Especially, when our team asked them about cheating in commission expenses in 2019,
they admitted that there was a case of taking advantage of company policies to benefit themselves.
However, the company has not yet found a solution to prevent similar incidents from happening.

5.2.3. Response of CEO
With the CEO of the company – Mr. Ngo Xuan Thang, he provided great freedom in the
methods of acquiring information (e.g company tour, direct interviews and data requests). The
CEO give us the total number of courses that the company opens from 2018 to 2020, divided by
course type.

He shows that the company has 4 main departments including the marketing department,
recruitment department, training department and sales department. In the company, Mr. Ngo Xuan
Thang also confirms Mr.NCH and Mrs.LA are responsible for cost management. Because both of
them are longtime employees, businesslike, Ms. LA - staff with accounting degrees who are staff
from the sales department and Mr. NCH is both a teacher and a salary checker through his practical
experience working at the company and looking through Alibaba's financial documents. When we
mention the company's expense management problem, he is very pleased and also confirms that
the company's problem should be resolved immediately. He realises that the company has a
problem in the cost management gap and wants to strictly manage the cash flow problem in the
company. At first, he thought that cost management was controllable and easy to do, so he assigned
the task to two longtime and trusted employees. However, Mr NCH and Ms LA are multitasking,
so they cannot focus on and control costs continuously. Many issues such as salary, bonus, incurred
costs, space rental costs, and management costs are clearly declared and the CEO is extremely
confident. It was not until the cheating in commission case was revealed that he realised the

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company's poor expense management. He shares that he wants to focus on managing cash flow in
and out, he is also calculating the cost if the company sets up an additional accounting and auditing

department. However, temporary measures to deal with violations in the company as well as
reduce the possibility of repeating the same mistakes have not been clearly given.

6. Results of the projects
Based on the in-depth research about the company and above literature review related to
expense management, the detailed problems in controlling expenses in administration, salary and
commission have been discovered in Alibaba English Center. Unfortunately, most of the
employees themselves find the current expense management is not effective and reliable.

First of all, there is a problem of managing expenses incurred in the training process of the
company, such as the costs of printing documents and books for students, the cost of rewards for
students in the class. there are good achievements in the classetc because the number and quality
of students in each class is different, the deduction of bonuses is not clear.

During the teaching process, in addition to the materials for practice that students are given
by the center to support their learning, when they go to class, the teaching assistants or lecturers
will distribute additional materials only when they study directly that session. Because the lecture
of each class is different and the number of students in each class is different, these documents are
in charge of the teacher of that class, before each class, the teaching assistant will print documents
for the students of the class with the amount of advance teaching assistant money to the company,
and this total amount will be compiled by the employee himself into the company's salary file
without going through any confirmation. In addition, during class, teaching assistants or lecturers
can buy gifts for students who have good achievements in the learning process and this depends
on the teaching style of the lecture, and these gift figures are not unequivocally proven as to
whether the figures are accurate or whether the gift purchase took place.

Thereby, the absence of any individual or department to manage those incurred expenses
leads to employees being able to falsify data to fill in the payroll to cheat that amount.

Instead of providing a specific policy on the teaching process, the company allows teachers

to create rewards, for example gifts and course-ended parties, to boost student morale but does not
limit the budget for those rewards. Those rewards could be purchased by teaching assistants or
lecturers without being authorised. Moreover, the expenses for rewards will be claimed by the
individual employees in the salary file provided by the company without any confirmation.
Therefore, it is a high risk that the exact amount spent on rewards could be overstated.

Secondly, the greatest problem in salary is the lack of segregation in the reconciliation and
recording process. According to NCH and LA’s answer in the interview, confirmed by other
employees, the responsibilities in those processes are now ambiguous. All the employees now
freely upload their working results in an Excel File checked by Mr NCH, a teacher and a salary
manager at the same time. Moreover, although salary is expected to be checked twice (by NCH

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and L.A) before recording, it can not be sure that is a thorough double check or to be simply just
based mainly on the Excel file provided by all employees. Overall, those current methods of salary
expense reconciliation and recording in Alibaba are simple and effortless, but there is a great risk
of salary overstating and fraud covering among colleagues.

Realising those problems, authors believe that the ultimate solution for Alibaba now should
be building up an accounting apartment in the future. However, to deal with urgent situations, the
company should hire an accountant specialised in reconciliation and recording all transactions. It
could be better if Alibaba can set up a time attendance machine with a fingerprint scanner to record
the employee’s working results fairly and effectively and prevent covering up the frauds (e.g shift
switch among colleagues and students’ covering up and fake confirmation on absent teachers).
Moreover, the use of MISA software to mainly manage salary and then the whole company’s
operation should be taken into consideration because MISA is suggested for Vietnamese small to
medium- sized businesses.

Last but not least, it is a problem related to commission expenses that the CEO feels most

helpless, which drives us to find thorough action plans that may perhaps bring some significant
impacts on company’s staff operation through policy change. Currently, Alibaba introduces a
commission policy unofficially (by speech) that “Commission expense is calculated based on the
number of students who register in trial courses”. The policy has been considered not suitable with
the company. Evidently, in December 2019, there were 3 staff members who created fake emails
for trial courses to receive high commissions. Significantly, those 3 staff were ones who reconciled
each other’s working result. Since then, even though the CEO has not found any other cases, the
commission expenses are still high (shown in Bảng kê khai chi phí theo năm 2018-2020-
Appendix). From all that information gained from research, it is an urgent plan that the company
should build up an official policy of commission (in text) and publish it publicly within the whole
inner organisation structure. There are some suggested modifications. The commission must be
calculated based on the revenue gained by the real number of students in the official courses with
detailed guidance. For example, the company is now focusing on Communication courses more
than Grammar courses, but Vietnamese people now prefer to learn Grammar than Communication.
Therefore, it is impossible to pay commission on these courses the same as those courses.
Moreover, the number of students should be considered the result of commission to raise the sales
team’s motivation. Now, Alibaba’s policy which states that “Up to 100 trial students will get
500.000 VND” is unclear. It perhaps tells the reason why some staff felt less motivated and then
faked emails. That was when the staff and the company did not share the same goal- focus on the
company’s growth. The commission results should be reconciled by the third party to avoid
covering frauds (as Salaries situation). Policy in detail would be mentioned in our Action plans.

From those outlined action plans, it is believed that processing a fingerprinted salary
machine and a printer could be easier and less time-consuming. However, when Alibaba wants to
control their expenses tightly, it should start with building official and detailed policies including
Bonus and welfare funds and Commission. It is our tough responsibility to help Alibaba to build

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up those detailed policies. However, because everything seems to be different between real

situations and what has been learnt at our university. Therefore, indeed we got some advice from
Ms Do Van Anh, our project mentor. After we received some suggested plans from her, we
discussed again and filtered the reasonable suggestions we should reference. Moreover, because
we are not experts in the educational environment, we did some research to find some theoretical
guidance and some similar English centres to get a firm base on developing policies in our action
plans.
This is an expense report for 3 years (2018-2020) provided by the company and other data table

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