Form 9 as previously described. We then take, say, the “store” charge
sheets (Form 7) and enter on Form 6 the total that each customer owes
the store. We do the same for every other department, also entering the
balance remaining unpaid from last month in the column provided for the
purpose. We also record in the proper column any credit we have given our
customers during the month for goods returned, overcharges, etc.
4. By using the adding machine, we find the total of each department’s
column on Form 6; it should equal the total charge sales for that
department reported on Forms 7 and 9. If it does not, the error must
be found and corrected before proceeding further. These totals, when
correct, are entered at the foot of their proper columns on the last
sheet of the record. Now add these column-totals on the machine and enter
the result in pencil at the foot of the “Total” column on the same last
sheet of this Form 6 record; it should check against the grand total of
the charge sales for the month reported on Forms 7 and 9.
[Illustration: Figure 9. Actual size]
5. When all postings to our Form 6 are complete, we station one clerk
at the adding machine and one is prepared to make out our monthly bills
or statements of account, using Form 1, shown in Fig. 9. Some person
reads off Form 6 the name of each customer and the total charges
against him by each department. These items are added on the machine and
simultaneously entered by the bill clerk on Form 1. The adding machine
operator reads the total of the items he has added, which total is
entered by the bill clerk on his Form 1 and by us in the column headed,
“Total” on our Form 6.
6. Any credit due the customer is read off to and entered by the bill
clerk on the statement. He then figures the balance due the Post
Exchange, which balance should agree with that figured independently by
the person reading from Form 6.
7. When the last bill has been made out, take the printed strip from the
adding machine and find the sum of all the totals that have been read off
by the operator. This sum should equal the pencil total described in Par.
4 above and checks the correctness of the account. If a “Duplex” adding
machine is used, this does not require extra work. If the accounts do not
“jibe” and the error cannot be found, take in rotation the charge slips
that you have filed against each customer and add them on the machine,
making a separate total for each customer. This should locate the error.
If the accounts check, however, (and they should if the previous checks
have been made properly) this laborious operation is unnecessary.
All our bills are now ready for mailing, and they are made out correctly.
In order to obtain the full benefit of this method, our bill forms should
require the minimum amount of writing. The form shown in Fig. 9 gives
satisfaction. It is a 3 × 5 inch card and therefore fits standard size
card index drawers; it is easily handled and will go into a note size
penalty envelope without folding. The appropriate month can be stamped
in and the name of the customer entered during spare moments throughout
the month, so that the only work necessary at this time is to write in
the figures. If the lines of Form 1 are “typewriter spaced”, that is, six
to the inch, and the form is not too heavy, it can be placed directly in
the adding machine and the various amounts printed on the card. The names
of the various departments should be printed on this card in the same
order in which they occur on Form 6. In fact, much work will be saved if
some specific scheme of sequence or relative order among the different
departments is invariably followed.
The writer does not know of a more economical or efficient system of
handling the bug-a-boo of “getting out our monthly bills” than that
just described. Sometimes, a “duplicating bill-book” is used, but it
is a wasteful and inefficient method when compared to this. One of
the principal advantages of the system lies in the fact that it is
unnecessary to keep a private ledger account for any of our charge
customers. If we were to do so, we should simply repeat information
that we already have. It will be remembered that we have filed away our
triplicate record of each day’s charge sales, which record describes in
detail the particulars of every sale made on that day. From this, should
the necessity arise, we can reconstruct our whole charge sales record for
the month. We have also on file (until the bill is paid) another copy
of each charge sales slip, filed according to the names of customers,
which, in itself, constitutes one side of the ledger account that would
be kept under the old system. These, together with the records previously
described, amply warrant the abolition of customers’ private ledger
accounts. Another great advantage of this system lies in the ease and
rapidity with which the books can be closed at any time.
Attention is invited to the note at the bottom of Form 1. This is a
labor saving item that is in accord with the practice of many up-to-date
houses—to regard a canceled and endorsed check as the best form of
receipt. Hence, if a customer pays his bill by check, it is unnecessary
to receipt the bill and return it to him, our endorsement on his check
constitutes his receipt. This same procedure can be made to apply to
companies, etc.; also, if the company commander will use the sales slips
as his sub-vouchers for the expenditure.
Credit Transactions.
We shall now take up the procedure to be followed in recording any and
all credit which we allow to customers for overcharges, goods returned,
etc. It is apparent that such transaction must occur in any business.
Accurate track should be kept of them and they should be handled in the
most efficient and time-saving manner possible. Each such transaction
results in a credit against our Bills Receivable and a charge or debit
against the particular department involved.
As before stated, the clerk who receives the goods that are returned
to us makes out a charge sales slip, marks it “CREDIT” and keeps the
duplicate, giving the original to the customer. It is usually the rule
that nobody other than the Steward or the Exchange Officer himself has
authority to give customers credit in this way. In the evening, the clerk
hands in these credit slips with his report. When the Steward makes up
his report on Form 4, after verifying the clerks’ reports, he simply
enters these credits in the last column on his Form 4, totals them and
describes each separate credit transaction on the back of his report. All
the data relating to the charge sales (and credits given) during the day
that are shown on the face of Form 4 are abstracted to the appropriate
line of Form 7, which latter sheet gives us in concise form all the data
we need concerning our charge sales for the month. The credit slips are
gathered up and placed with the filed charge sales slips relating to the
person who returned the goods to us. At the end of the month, preparatory
to making out our bills, all credits are entered in the column headed
“Credit” on Form 6, and are checked against the totals shown on Form
7. This avoids the necessity of entering each credit transaction on a
separate line of Form 7 as such transaction occurs. Even if the credit
slip were lost, no error should result, because we check the total
credits entered on Form 6 against the total credits on Form 7 before we
start making out our bills. If these do not agree, we must check both
Forms 6 and 7 against the credits shown daily by the various Forms 4. We
also have another check in the triplicate copy of the credit slips that
has been filed away.
Below is a graphic chart which shows how to handle this system of charge
accounts. It shows how the various records experience a continuous
process of summation until they finally reach the ledger and the
customer’s bill, and how the accounts can be checked as we go along, thus
avoiding errors. Solid lines show posting operations, broken lines show
possible checking operations.
Settling Charge Accounts.
When any of our charge customers pays his bill, we make an entry in our
cash book, giving to each such payment a separate line. We enter the
amount of the payment in the column headed “Net Cash” and also in the
column headed “Customers”. We do _not_ enter any of this amount in the
columns referring to the various departments because they have already
been credited for their proper shares through the charge sales records
and to do so again in the cash book would manifestly give them double
credit for each charge sale. We also stamp “Paid” in the “Cash” column
of Form 6, using a dating stamp that will fit neatly into this column.
One using red ink is preferable. If only a part of the bill is paid,
we enter in this column the amount received, extend the balance to the
proper column and, at the proper time, carry it forward to next month’s
account. Some book-keepers of the old school will keep a “blotter” or
some such book wherein these payments are first noted, copying them at
their leisure into the Cash Book. As the Cash Book is a book of original
record, this is not only wrong, but is incidentally unnecessary labor and
hence to be avoided. When payments like these come in, they should be
taken directly to the book-keeper, who should immediately enter them in
the Cash Book.
[Illustration: Figure 10.]
All such payments occurring on any one day are entered in a lump sum
under “Collections,” on the Form 4 for that day. In fact, all cash
received, whether from paymasters’ collections on payrolls or any source
other than cash sales by any of our departments, is taken up on Form
4 as “Collections”. If a bill is paid before the end of the month, it
is treated exactly the same as if it were paid afterward, except that
the date is stamped in a different colored ink. It does not confuse our
accounts, because the amount paid is entered in the “Customers’” column
of the Cash Book and the total of this column is posted at the end of the
month to the credit side of Bills Receivable, Customers, in the ledger.
The “Customers’” column in the Cash Book is solely for receipts from our
charge customers and for nothing else.
If, at any time, we wish to find the total charge sales, we simply find
the total of the amounts shown on Form 7, subtracting credits, if any.
We also use the total sales credited to the various departments on Form
7 in making up our monthly statement for the auditing officer and for
the Inspector. To find out at the end of the month the amount due us on
account, we turn to Bills Receivable, Customers, in the ledger, where the
balance should show the correct amount. This amount should check with the
“Total” column on Form 6 reduced by credits allowed and payments received
prior to the end of the month.
Dead and Live Records.
It will be remembered that all our Forms 9 were placed in one book and
our Forms 6 in another, and that each Form 9 was to be used for two
months, that is, used on both sides. After both sides have been used
these forms are transferred bodily to the book containing our Forms 6,
and placed between the Forms 6 referring to these months. Fresh Forms 9
take the place of those transferred, thus keeping our book “alive” and
placing our dead records where they will be less in the way. The logic
of this is evident when we remember that we use our Charge Book (Form 6)
only at the end of the month, whereas, we use our Form 9 book every day.
As regards Form 8 (charge sales slip) our rolls of triplicate sales slips
for the month should be marked on the outside of each roll with the
date and the name of the department to which each pertains and kept in
a convenient place until the auditing officer has finished his work for
that month, when they should be stored together in some place where they
can be consulted if desired. They should be preserved for such length
of time as may be required by regulations or local laws, depending upon
which is the greater. The original slips may be treated in one of two
ways; they may be sent to the customer with his bill at the end of the
month, or they may be sent to him after he pays his bill. It is felt
that the first method is by far the better.
Forms 5 for the month should be preserved until the auditor has finished
with them, and it is perhaps advisable to keep them until after the next
visit of the inspector. Our Forms 4 are very important and should be kept
until after the inspector has inspected the accounts of the Exchange, if
not indefinitely. Forms 6, 7 and 9 are a part of the permanent records of
the Exchange and should be preserved indefinitely.
The foregoing description of this system of handling charge accounts
may sound formidable to the layman, but in reality, it is not so. As
shown in the graphic chart (Fig. 10) it is a logical system, proceeding
in a simple, orderly way from the charge sales slip to the ledger and
the customer’s bill. It belongs to the class of book-keeping called
“controlled accounts”—each part of the system knits evenly into the
others, and there is a continual process of summation going on throughout
the records. There is no duplicated work and every step is one of
definite progress towards the goal. It will be found to fulfil the
requirements we imposed at the beginning of this essay. It has actually
proved its worth wherever installed. It is equally adapted to the large
and to the small Exchange. Due to the many available opportunities for
checking the correctness of results, mistakes are easily located and
corrected. However, if the checks described are applied, especially those
relating to Form 4, there should be little excuse for a mistake to appear
in any of the higher accounts.
CASH SALES.
In the light of the preceding discussion of charge sales, our methods
of handling cash sales can be disposed of in a few words. In all cases
of such sales, the clerk simply gives the customer his goods, receiving
the money therefor, makes change if necessary, rings up the amount of
the sale on the cash register and places the cash therein. The most
important part of this transaction, insofar as our system is concerned,
is described in the next-to-last clause. If the salesman once rings up
the correct amount on the cash register, the store is sure that the
transaction is closed, and closed properly. Means to this end will be
discussed under the heading of “Cash Registers”.
It is customary to loan, secured by various kinds of receipts, a suitable
sum to the heads of the various departments of the Exchange for the
purpose of making change. In some cases, it may be advisable to require
them to make a cash deposit to cover these amounts. When the Cashier or
Steward is under bond, it is feasible to turn the “change money” of the
whole Exchange over to him, taking his note for it.
After closing at night, each clerk enters his cash sales on his sales
report (Form 5, Fig. 4) and hands it, together with the cash receipts,
to the Steward or other authorized recipient. The latter counts the cash
immediately, checks it on the clerk’s report and places it one side
until the total cash is checked. He then transfers the item to his own
Form 4, (Fig. 5) and compares the totals for each department with the
cash register readings for those departments, entering the latter, if
they are shown separately for each clerk, on each clerk’s report in the
spaces provided for that purpose. Discrepancies are handled as previously
explained under Charge Sales.
Cash Book.
When the cash is checked and the Steward’s report is correct, he copies
the amounts of cash sales for each department into the Cash Book, putting
each amount in its proper column. All the cash receipts from all the
departments for any one day go on the same line in the Cash Book. On the
other hand, credit nothing in the Cash Book to a department except a cash
sale. Every other receipt of cash from whatever source is recorded in the
Cash Book, also, a separate line being given to each transaction. For
instance, as before explained, whenever one of our charge customers pays
his bill, we give him a separate line in the Cash Book, entering this
amount in two columns, first under “Net Cash” and also under “Customers”.
The Cash Book should have on the “Received” or debit side (the left side)
columns for the following items:—Date, Explanation, Vou., Net Cash,
a column for each department of the Exchange, Customers, Creditors,
Interest and Discount, and at least two spare columns for entering the
pay-day collections, etc. The books should not be too bulky as many cash
books are, and should, of course, be built on the loose leaf plan. A cash
book cannot be designed to suit all cases because of the varying number
and kind of departments pertaining to different Exchanges. However, it
is easy to secure uniformity of principle and method, which is the main
thing. The only point that need vary between different Exchanges is the
number of columns in the book and the headings to same.
[Illustration: Figure 11. (Reduced in size)]
A cash book will be rather expensive if we have it made precisely as we
want it, especially if we have the column headings printed in. There is
no doubt that printed headings make a neater book, but in many cases, the
advisability of incurring the extra expense is open to doubt. Considering
the great variety of stock pages published by various manufacturers,
there is rarely an excuse for ordering specially ruled and printed
sheets. Special ruling are very expensive, especially when we can order
but a small supply. It is found that the sheets shown in Fig. 11 give
perfect satisfaction. The lower sample, having 20 columns, will take
care of almost any Exchange, and by trimming off the two outer columns
of the right hand page, we can secure a capacity of 36 columns. This
would prevent us from keeping Cash Received and Cash Disbursed on pages
that confront each other, but as the number of pages used for the former
usually exceeds greatly those necessary for the latter, this objection
has little weight. If convenience so dictated, there is no reason why the
two sides of the Cash Book or Cash Account could not be kept in different
parts of the book or even in separate books. This would lead to economy
of pages.
The upper of the two forms shown in Fig. 11 would be suitable for small
Exchanges where a large number of columns are not required, as the
left hand side could be used for cash received and the right for cash
disbursed. Several of the right hand pages would have to be wasted each
month on account of the greater number of entries on the debit side. Some
Exchanges use a form similar to the upper one of Fig. 11 except that it
is printed and ruled to order and contains a greater number of columns
than that shown in the cut. The writer knows of one Exchange that has
as many as twenty columns on each side of its Cash Book. Such forms,
however, are exceedingly expensive and should be considered more or less
of a luxury. The forms shown in Fig. 11 cost $1.75 per hundred retail
(without printed headings) and measure 11 × 14 inches, being 11 inches
on the binding side. A sectional post binder to fit any number of these
sheets can be obtained for $3.25 retail.
The Cash Book is used to give a detailed record of all cash transactions.
On the left hand or debit side is entered all cash received and on the
right hand or credit side is entered all cash paid out; the difference in
the sum totals of the respective sides showing at any time the amount of
cash on hand. All items on the credit side of the Cash Book are posted
to the debit side of some account in the Ledger and vice versa. (Bank
drafts, sight drafts and checks belong in the cash account; notes and
time drafts belong to Bills Receivable and Bills Payable accounts.) Our
posting is done only when the books are closed, at the end of the month
or when necessity arises, thus saving an enormous amount of work. As we
keep no _private_ ledger account for each of our creditors or customers,
it follows that the totals of each column in our Cash Book are posted as
lump sums to the credit of or as a debit against the ledger accounts of
Bills Receivable, Bills Payable, or one of the Exchange’s departments,
etc. All miscellaneous receipts that do not properly belong to one of the
departments, customers, etc., are taken up under “Interest and Discounts”.
An important advantage of this method of handling our cash sales is that
we are preparing, as we go along, all the data that will be required
by the Inspector. A discussion of the Credit side of the Cash Book is
postponed until the subject of Purchase Records is taken up. The above
described operations are shown graphically in Fig. 12, where the heavy
lines represent operations of recording or posting and the dotted lines
show possible checking operations. The item of “Other Cash” is, of
course, checked against Form 25, Form 6, or elsewhere, depending upon
circumstances.
[Illustration: Fig. 12.]
COUPON SALES.
In General.
[Illustration: Figure 13, Cover (Reduced in size)]
[Illustration: Figure 13, Coupons Actual size]
Coupons, as it may be superfluous to explain, are credit slips sold to
enlisted men by the Exchange. They are sold on credit, being secured
by notes signed by the purchasers; these notes constituting a lawful
lien on the drawer’s pay are supposed to be redeemed at the next pay
day. The credit slips can be used at any time for purchasing articles at
the Exchange. Exchanges formerly used metal coins or “checks” for this
purpose, but it was considered inadvisable to permit credit to be so
easily counterfeited, transferred, etc., hence the use of paper coupons
has become universal, being covered by mandatory orders in certain
circumstances.
Kinds of Coupons.
There are two classes of coupons, the first being the well known “Coupon
Book” shown in Fig. 13. These books are made in various denominations
ranging from one to five dollars. They are composed of a cover and
several interior pages, the latter being divided by perforations into
five coupons each, representing values of five, ten or twenty-five cents,
depending upon the value of the book. For instance, a $1.00 book contains
three sheets, two composed of five 5c coupons each and one composed of
five 10c coupons. On the cover of each book is printed the serial number
of the book, its value and blank lines for the insertion of the signature
of the person to whom issued, the signature of the Exchange Officer and
the date of issue. It is also customary to have printed on the cover the
words “Not Transferable”. In some cases, on the back cover of each book
is printed a promissory note which, after being signed by the soldier,
is torn off and kept by the Exchange authorities until the value of the
book is collected in cash from the soldier. A variation of this scheme
is to have a separate sheet in each book so printed that it will perform
a like function. In either case, it is expected that when the book is
depleted, the clerk making the last sale shall take up the cover of the
book in order that it may be filed in the Exchange for such period as the
Exchange Officer shall determine. This, for the reason that sometimes
a man will claim that, although he signed up for certain coupons at a
certain time, he failed actually to receive the coupons. The possession
and production by the Exchange of these used-up covers are conclusive
evidence to the contrary.