charges and has in addition a spare blank column for such miscellaneous
collections as may be found desirable. The particulars of the Laundry
entries will be dilated upon later. When the amounts that the various men
of any organization owe to the Exchange have been entered in their proper
columns, each line is added across and the totals due from each man
entered in the proper column. Each column is then totaled on the adding
machine and the footings checked by comparing the total of the total
column with the sum of the totals of the other columns. If they agree,
that sheet is ready for payment, and a like process is instituted with
the other sheets. These sheets and the Forms 19 are the only papers that
need be taken to the pay table.
Pay Table Procedure.
It may be just as well to discuss this point here, because it is related
to our coupon sales more closely than to anything else.
The first thing to do is to make sure there is available a plentiful
supply of change. Where there is no bank convenient to the post and the
men receive their money from a paymaster, he will sometimes agree to
bring with him an amount of change sufficient for the needs of the Post
Exchange, but if there is a bank available, we should hesitate before
imposing upon the good nature of the paymaster to this extent. It is a
great convenience to the men to have their ten dollar bills “changed”,
and no Post Exchange should demur when the men offer such bills in
payment of their debts. We must always remember that the principal reason
why the Exchange exists is to be a convenience to the enlisted man.
There should be three persons at the Exchange table on pay days; the
Exchange Officer to personally receive the cash and make change, the
Steward or book-keeper to read from Forms 25 the amount each man owes,
and a clerk to check this reading with the men’s notes (Form 19), cancel
them and deliver same to the men. A non-commissioned officer of the
organization being paid is stationed beside the Steward to identify the
men. He calls to the Steward the names of the men as they come up, the
Steward calls off the amount that each man owes, the latter gives the
money to the Exchange Officer. The clerk has meanwhile checked the
total amount covered by Form 19 with the amount read off by the Steward,
stamped the card “Paid” and placed it in front of the Exchange Officer
for his inspection. The latter then gives the card to the man with his
change and the incident is closed. It is usually found advisable to have
a selected non-commissioned officer detailed to see that all men report
at the Exchange table.
After payment is finished, the clerk should total the value of the cards
he still holds for each organization and subtract it from the total shown
by the proper Form 25. The sum of all these remainders should equal the
amount of cash actually taken in at the Exchange table. This check should
always be made, and at the earliest possible moment.
It sometimes happens that a man pays for his coupons before pay day; he
may have been discharged or transferred, etc. In such a case this fact
should be stamped on Form 25 and the total of such amounts deducted at
the bottom of the sheet before going to the pay table. The amount of such
payments should also be entered on the debit side of the Cash Book as
“Pvt. Jones, Co. A, ... $3.00 ... $3.00”, the sums coming under the net
cash and the credit coupons columns respectively. If he also paid $1.40
for laundry work done, this entry would be “Pvt. Jones, Co. A, ... $4.40
... $3.00 ... $1.40”, the sums coming under net cash, credit coupons and
laundry coupons respectively. The amounts collected at the pay table are
entered in the Cash Book in the same way, all on one line. At the end of
the month or when the books are closed, the total of the credit coupons
column is posted as a lump sum to the credit of the Bills Receivable.
Credit Coupons account in the Ledger and the Laundry collections are
handled in the same way.
Having traced this branch of the coupon business to its end, let us
retrace our steps and follow another branch until we come to the same
goal, the Ledger.
Coupon Sales.
When the men receive their coupons, they use them for purchasing articles
from the Exchange. The clerk making a coupon sale should identify the man
making the purchase and make sure he is using his own coupons. He should
also satisfy himself that there is no fraud, forgery, etc., connected
with the coupons. These two operations are ordinarily instantaneous,
requiring no waste of time whatever. The clerk then gives the purchaser
the desired articles, tears off a corresponding value in coupons and
drops them in his private drawer or compartment, meanwhile ringing up the
sale on the cash register and giving the purchaser the receipt printed by
the register.
[Illustration: Figure 17, (Reduced in size)]
After the day’s work is over, each clerk handles his coupon sales in
the same manner as previously described for charge sales, and they are
checked by the Steward as before. The latter enters on his Form 4, (Fig.
5) the amount of coupon sales made by each clerk, also, the total amount
of coupons issued during the day. All these coupon transactions for any
one day are then entered on a single line of Form 26 (Fig. 17) which is
the same as that used for Form 7. As will be noted from an inspection
of the cut, the coupons issued are entered in column A and the total
receipts from all departments are entered in column B. These receipts are
distributed among the department as shown, the value carried in column B
equalling the sum of the amounts carried in the columns to the right.
Each Form 26 refers solely to one month’s transactions, there are no
“brought forward” items. At the end of the month or whenever the books
are closed, all of the columns on this form are footed up and the totals
checked across. The total of column A should agree with the strip record
which the coupon clerk has been keeping as previously described. The
detailed process of checking this account will be described later, but it
is evident that if the Steward has made out his daily reports (Form 4)
correctly, and correctly copied the coupon records to Form 26, there can
be no error in the latter statement. After successfully withstanding the
checking process, the total of column A is posted as a lump sum to the
debit side of “Bills Receivable, Credit Accounts” in the Ledger, writing
the entry thus:—“Aug. 31 Credit Coupons $54.00”. It will be remembered
that we must also credit this amount to the Outstanding Coupon account.
We now transfer the total of the Store column to the Store Account in our
Ledger, entering on the right hand or credit side, “Aug. 31 Coupon sales
$8.15”. We proceed in like manner with our other departments. The total
of column B must, of course, be charged (debited) against the Outstanding
Coupon account in the Ledger.
A summary of all these operations is shown graphically in Fig. 18.
The solid lines show how a record is carried through the books until
it arrives at the Ledger. The dotted lines show the various checking
operations that are possible. Attention is especially invited to checking
Forms 25 and 26 against each other.
[Illustration: Figure 18.]
In leaving the subject, it is deemed proper to state that the Exchange
Officer should keep a single entry record of all unused coupons on hand.
When they are first received from the printer, he should carefully check
them in person and see that they are safely stored. His record of them
should show the numbers and colors of the coupons and exactly how many of
the various colors he has on hand at any time.
Coupons should be issued at a fixed time daily, and the Exchange Officer
should see to it that the men are never disappointed, but are always able
to secure their coupons at the specified time.
STOCK RECORDS.
In General.
One of the most important points connected with the running of any store,
is that referring to the manner in which the records of the stock are
kept. In most Exchanges, the stock records are not good; usually, because
a clumsy or inefficient system of records is in force. An endeavor will
be made in the description to be given hereafter to set forth a system
whereby misuse of stock will be prevented and an accurate estimate of
the profits made by each department will be possible. The objection
may be made to this system that in a large exchange it would require
the services of one clerk to keep the stock records alone, but when we
realize that an inefficient stock record can and usually does result in
losses that are sometimes much greater in value than this clerk’s wages,
we see the futility of such an argument. It is useless to try to avoid
the conclusion that we _must_ keep accurate track of our merchandise.
In an exchange at, say, a 5-company post, it is economy to pay one man
$100.00 per month or even more, to take exclusive charge of the stock
records.
In the first place, it is essential to make clear in the minds of the
Exchange authorities the difference between a stock room and a store
room. The former is for storing merchandise that is bought in large
quantities and will not be needed in the various departments for some
time. The merchandise in the stock room is charged to it on the Stock
Records until it is needed in one of the departments when it is sent to
and its value charged against that department and credited to the stock
room. A store room in the sense now considered is a place in which we
may store the merchandise belonging to and already charged against any
department. This “place” may be but a corner or a shelf in the stock room
or any other room. As a general rule, it is best to charge merchandise
direct to the proper department, as it saves time and work. Then, if
the department concerned finds that it is inconvenient to keep this
merchandise on its counters or shelves, it can transfer some of it to
the proper store room until needed. Both the stock room and the store
rooms should be under the jurisdiction of the stock clerk, the former
exclusively so. Efficient locks should be provided for these rooms and he
or his agent should be the only persons authorized to handle the stock
therein.
The stock record is simply a stock ledger in which we keep accurate
account of the numbers of articles acquired and dispensed. If
practicable, it should show at all times the exact number of each article
that we have on hand. Such a record is sometimes called a “Perpetual
Inventory”. It would not be practicable in the usual case for us to keep
such a record in post exchange business for the reason that it would
be extravagant for us to record each cash or coupon sale made during
the day. For example, during certain days of the month, such as pay
day and the first day upon which coupons are issued, it is manifestly
impracticable for us to make out a sales slip for each cash or coupon
purchase because there are so many five and ten cent purchases that the
cost in time and labor involved in such a method would outweigh the
advantages gained. If the average sale amounted to a dollar or so, it
might pay us to use sales slips similar to those used in recording our
charge sales. Therefore, most Exchanges do not require cash or coupon
sales to be recorded except on the cash register. Hence, there is no
itemized record of the merchandise that is sold during the day for cash
or for coupons, which in turn makes it impossible to keep a perpetual
inventory. The result is that an inventory must be taken at least once a
month.
If we now take such an inventory and calculate the selling price of all
the goods found, the result will represent the receipts each department
should turn in if they sold out all of their stock. If we keep adding
to this amount the selling price of all merchandise that we receive for
and issue to the departments for sale, and deduct the selling price of
all articles which each department turns in to the stock room, we shall
have, at the end of the month, figures which represent the receipts
which should be turned in if each department were to “sell out”. By
subtracting from these amounts the actual receipts turned in during the
month, we find the selling price of the articles which _should_ be on
hand at the end of the month. By taking an inventory at the end of the
month and figuring out the selling value of the articles actually found,
we can check the operations of our various departments. If there is any
great discrepancy, it would show that our clerks are, in effect, taking
articles from our shelves and the Exchange is not getting the benefit of
its sales. It is not to be expected that these amounts will agree to the
cent.
Now if there is but one clerk in any department, it is easy to fasten
the responsibility for any shortage, but where there are several,
special steps must be taken in order to do this. Suppose we have four
clerks in the store department; if they sell from the various shelves
indiscriminately, or if one or more of them are sometimes away on duty,
it would be manifestly unjust to hold any particular clerk or even
all of them responsible for any shortages which might occur. The only
solution lies in sub-dividing the store into sections, putting one clerk
in sole charge of each and allow no clerk to touch the stock in another
man’s section. In case a clerk in unavoidably absent, an inventory of
his section can be made in a few minutes, and, if the results at the
end of the month show it to be desirable, checked against the sales he
had made. In this way, both the clerk and the Exchange are protected. A
“roving” clerk or the Steward can take the place of the absentee in case
of necessity. Heavy sellers like tobacco and the like can be placed in
the sections of two or more clerks, thus taking care of pay day rushes.
Unless some such scheme is adopted it will be absolutely impossible to
fix the responsibility for any loss the Exchange may incur.
Those departments which are, in effect, “manufacturing” departments, such
as the lunch room, meat market, etc., also require special treatment,
especially in the matter of figuring the selling price of merchandise
issued to them.
It goes without saying that the honesty of the stock clerk must be above
suspicion. In case a civilian is employed, it is good policy—in fact, it
should be considered imperative that he be required to execute a bond for
the faithful performance of his duties.
With the above general explanation of the broad principles of this
particular system, we are now prepared to discuss it more in detail.
It seems generally conceded that the stock records can be kept most
easily, cheaply and efficiently by means of the card index system. The
present regulations, previously cited, specify an “inventory _book_”,
and inspectors are prone to interpret the regulations literally. It
makes little difference in our case which method is used, except that
the card system is more efficient, as before stated. The handling of
the inventory book requires no explanation, so, in order to provide for
the time (which should be in the near future) when the up-to-date card
system of inventory is specifically allowed in regulations, the following
description is given. It is hoped that it will prove a conclusive answer
to those who ask, “But suppose you lose a card.”
Inventories of Stock.
[Illustration: Figure 19, (Reduced in size)]
Let us start by taking an inventory of the stock we have on hand in the
stock room. We take a pack containing a known number of cards, preferably
numbered in sequence, like those shown in Fig. 19, and enter on the
top line the name of each article as we come to it; in the right upper
corner, the unit in which we sell it, whether pounds, bottles or what
not; and at the right of the uppermost data line, the number of such
units that we actually find on hand. We do this for each article in
succession, using a different card for each. If we have various grades
of the same kind of article (cigars, for instance) selling at different
prices, a separate card will, of course, be made out for each different
grade. (Never sell the same article at two different prices. For example,
do not sell cigars for “10 cents each, 3 for a quarter”. Sell them at
either price and put in a different brand of equal quality at the other
price. It is proper to give reduction on a sale of a box of cigars at a
time, but sell them _from the stock room_ in such a case, and not from
the store. Another way, permitting sale from the department’s shelves,
is by means of a discount slip, which will be touched upon later. The
first method, however, probably suits our purposes best, especially when
combined with the second.) The cards mentioned above should be left with
the articles to which they refer until the inventory for that department
is complete. We then look over the shelves to see that there is a card
with every article, thereby proving that our inventory is complete, a
point of superiority over the book form of inventory. We then gather up
and count the cards to make sure that none are missing. The cards are
then filed alphabetically behind a tabbed index card referring to that
department, or that particular section, if the department is sub-divided.
This same procedure is followed in taking inventory of merchandise in the
store, lunch room, etc., except that a different colored card is used for
each department. All sections of the same department use cards of the
same color. As each department will have more or less merchandise in its
store room, it will probably be best to take the store room inventories
first, then take the articles in the sales rooms. Enter partial totals in
pencil and the total in ink or indelible pencil on the first line under
the heading, “On Hand”, the date being entered at the left. The number on
hand, multiplied by the unit cost and selling prices, respectively, will
give the total cost and the total selling price of all the articles on
that card. For this purpose, the unit cost and selling prices are entered
at the upper left hand corner of each card. The total cost prices are
used in our inventories shown on our monthly statement, and the total
selling prices are used in our stock records only. In large exchanges,
these cards are not used again until the next inventory is taken, so it
is seen that they will last for several months.
Merchandise Purchased.
When merchandise arrives, it is cared for as described under “Purchase
Records” and when the total cost and selling values of the goods on any
invoice have been figured and transportation charges, etc., distributed,
the selling values are entered on Form 17, shown in Fig. 20. Two copies
of this form are used every day, one for cost prices and one for selling
prices. Each invoice requires but one line on each of these forms, so
one form is ordinarily ample for a day’s stock transactions. In the
left hand column is entered the number of the invoice and in the Dr.
column pertaining to each department is entered the selling price of all
articles which are covered by that particular invoice. The sum of all the
values entered in the Dr. columns on any one line should therefore equal
the selling price of all articles covered by the invoice whose number
appears at the left.
This same procedure is followed with all invoices received, and therefore
covers all merchandise transactions. It will be noted that there are
no “Requisitions”, properly so-called, in cases like this where the
incoming goods are sent direct to a department. The department head
receipts for such goods by simply placing his name or initials in the
right hand column of the retained copy of our original order. (See
Purchase Records.) This simplified way of handling such a transaction
saves an enormous amount of unnecessary work, and is just as sound as the
Requisition System.
Transfers Between Departments.
[Illustration: Figure 20, (Reduced in size)]
This proposition has previously been mentioned, but we purpose now to
show in detail how such a transaction is effected. Let us suppose that
the lunch room needs a ham, and it is desired to purchase same from the
market department. Assume further that the selling price of this ham
is $3.25. It is evident that we must first credit the market with this
amount. This is done by means of a “turn-in-card”, Form 12, shown in Fig.
21. The card is filled out as shown, (the name of the article is not
essential), is signed by the stock clerk and is given to the head of the
market department as a credit for the ham, which is then issued to the
lunch room man on a regular requisition. The requisition cards and the
turn-in-cards are precisely alike, except that the latter are printed
in red ink. With the exception of the signature, therefore, Fig. 21 is
also a reproduction of the requisition upon which the ham is issued to
the lunch room. These cards are of standard size, 3 × 5 inches, and are
of various colors, depending upon the color scheme adopted as described
under “Charge Sales”. Hence, we may assume that the market’s turn-in
card was printed in red on a buff card and the lunch room’s requisition
was printed in black on a salmon colored card. The cards can be bought
cheaply with “horizontal ruling”, thus cutting down some of the bill for
specially printing the cards. It costs less to have the turn-in cards
printed in red than it would to have a special form of card printed, and
they are better, besides.
[Illustration: Figure 21]
In issuing the ham to the lunch room, the stock clerk should note on
the requisition, “Cr. Market”. He then enters the transaction on Form
17 as shown in Fig. 20. In all such transfers, the sum of the credits
on any line should, of course, equal the sum of the debits. It is not
essential to number these requisitions and turn-in slips because the date
stamped at the top is sufficient to enable us to identify any particular
transaction. The market man would hand in his credit slip to the Steward
with his daily report of sales. The stock clerk would hand in the
requisition (receipted by the lunch room man) with his Form 17 for that
day.
There is still another transaction for which we must provide and that is
the operation of returning to our creditors goods which we have received
from them. This may arise through some defect in the merchandise or
through some other cause. Such a transaction is handled in exactly the
same manner as before. See entry opposite No. 7343 in Fig. 20 where we
have credited the store with $7.60. The goods were received on this
invoice and deduction made on same for this amount. If this invoice
pertains to an account already closed, we can make out an invoice of our
own, give it any desired number and give the store credit as before.
Goods which are returned to us by our customers are credited to their
accounts through the sales records as before described and do not affect
the working of the stock records. Wastage, breakage, etc., is credited to
departments by means of this same “turn-in” card; so, also, is discount
given on goods sold in quantity, as a box of cigars, for example.
Since the whole operation of accounting for our goods on the basis of
selling price is purely for the purpose of protecting our stock, and not
for the purpose of calculating our monthly profit and loss sheets, it
is seen that it is necessary to make out another copy of Form 17 daily,
in order to record the same transfers, issues, etc., on a _cost_ price
basis. This will be discussed more fully later, but let it be stated here
that this work is necessitated by the rule which requires us to base our
statement of assets, insofar as merchandise is concerned, upon the cost
price of same. This, for the reason that it is not sound practice to
anticipate profits. Therefore, our inventories, _when carried as assets_,
must be based on cost prices, and in order to secure a true statement of
profits earned, we must record the cost price of all merchandise that has
been purchased during the month and distribute this cost properly among
the departments.