OFFICE METHODS 
 AND ACCOUNTING 
 
OFFICE METHODS 
 
 AND 
 ACCOUNTING 
 
 ORGANIZING YOUR OFFICE 
 
 LAYING OUT AN ACCOUNTING SYSTEM 
 
 HANDLING CORRESPONDENCE 
 
 AND OFFICE WORK 
 
 A. W. SHAW COMPANY 
 
 CHICAGO NEW YORK 
 
 LONDON 
 
Copyright. 1914, by 
 A. W. Shaw Company 
 
 Copyright, Canada, 1914, by 
 A. W. Shaw Company 
 
 Entered at Stationers' Hall, London 
 A. W. Shaw Company, Ltd. 
 
 Under the title 
 3 *THE LIBRARY OF BUSINESS PRACTICE" YoL S 
 
 Reprinted 1917 
 Priated in U. S. A. 
 
CONTENTS 
 
 I ORGANIZING YOUR OFFICE 
 
 Editorial by Theodore N. Vail 7 
 
 I OFFICE FUNCTIONS AND DEPARTMENTS ... 9 
 
 by William E. Wilson, Consulting Accountant 
 
 II ARRANGING THE OFFICE TOR EFFECTIVE WORK . . 22 
 
 By Wesley A. Stanerer, formerly Sales Manager, Royal 
 Typewriter Company, Chicago Branca 
 
 III CONTROL AND MANAGEMENT 33 
 
 By Charles E. Cake 
 
 IV MACHINES INSTEAD OF CLERKS 39 
 
 By Kendall Banning 
 
 V THE BUSINESS MAN'S DESK 50 
 By Edward Mott Woolley 
 
 II LAYING OUT AN ACCOUNTING 
 SYSTEM 
 
 Sditorial by James B. Logan .. 59 
 
 VI MAKING THE ACCOUNTING ROOM CONVENIENT . . 61 
 
 By Wesley A. Stinger, formerly Sales Manager. Royal* 
 Typewriter Company, Chicago Branch 
 
 VII THE BOOKS AND THEIR ACCOUNTS .... 70 
 
 By Neil M. Clark 
 VIII How TO HANDLE PURCHASE ACCOUNTS ... 85 
 
 By J. M. Cobb 
 IX How TO HANDLE SALES ACCOUNTS ... 95 
 
 By William E. Wilson, Consulting 1 Accountant 
 
 X REPORTS THAT GUIDE THE BUSINESS . . . 102 
 By J. M. Cobb 
 
 III TESTED SYSTEMS FOR KEEPING 
 ACCOUNTS 
 
 Editorial by A. C. Bartlett ...... Ill 
 
 XI RETAIL ACCOUNTING 113 
 
 By J. F. Wenzel 
 
 XII BRANCH STORE ACCOUNTS 123 
 
 By C. A. Ransom 
 
 4.i 
 
CONTENTS 
 
 XIII MANUFACTURING AND SALES OFFICE ACCOUNTS . 130 
 
 By Neil M. Clark 
 
 XIV SIMPLICITY IN BANK RECORDS . 138> 
 
 By J. M. Cobb 
 
 XV PERSONAL AND PROFESSIONAL ACCOUNTS . . 145 
 By Ernest A. Scholz 
 
 IV HANDLING CORRESPONDENCE AND 
 OFFICE WORK 
 
 Editorial bv D. P. Kingsley 151 
 
 XVI CORRESPONDENCE DETAILS AND FILING SYSTEMS . 153 
 By William E. Wilson, Consulting Accountant 
 
 XVII GETTING OUT THE MAIL 167 
 
 By Edward Mott Woolley 
 
 XVIII CORRECT ROUTINE FOR THE SALES ORDER . . 177 
 By William E. Wilson, Consulting Accountant 
 
 XIX KEEPING RECORD OF GOODS RECEIVED AND SHIPPED 184 
 
 By Charles E. Cake 
 
 XX OFFICE SHORT CUTS AND ECONOMIES . . ., 193 
 By Wesley A. Stanger, formerly Sales Manager, Royal 
 Typewriter Company, Chicago Branch 
 
 SPECIAL ILLUSTRATIONS 
 
 I OFFICE FUNCTIONS AND DEPARTMENTS . . . 11 
 
 II A CONVENIENT OFFICE LAYOUT , . . 25 
 
 III PLANNING A SMALL OFFICE 27 
 
 IV THROUGH ROUTING IN OFFICE WORK . 29 
 V MAKING YOUR OFFICE IMPRESS VISITORS . . , 31 
 
 VI CONVENIENCE IN THE ACCOUNTING ROOM 63 
 
 VII ACCOUNTING ROOM LAYOUT TO SECURE PRIVACY , . 64 
 
 VIII CENTRALIZATION IN THE ACCOUNTING ROOM . . 65 
 
 IX ACCESSIBILITY IN THE ACCOUNTING ROOM ... 66 
 
 X CENTERING ACCOUNTING WORK AROUND ONE MAN . 67 
 
 XI THROUGH ROUTING IN ACCOUNTING WORK . . 68 
 
 XII THE FUNCTIONS OF BOOKKEEPING .... 75 
 
 XIII HOW ACCOUNTS PROGRESS THROUGH THE BOOKS . 79 
 
 XIV HANDLING PURCHASE ACCOUNTS .... 89 
 XV HANDLING SALES AND FINANCIAL ACCOUNTS . . 98 
 
 XVI CORRESPONDENCE DEPARTMENT WORK . . 155 
 
 XVII HANDLING INCOMING MAIL 159 
 
 XVIII THE FILING ROOM "SORTER" 161 
 
 XIX HANDLING THE SALES ORDEB ..... 179 
 
 XX TRAFFIC AND SHIPPING DEPARTMENT WORK 186 
 
PART I ORGANIZING 
 YOUR OFFICE 
 
 Making Work Profitable 
 
 INTELLIGENCE alone, in the direction of 
 labor, makes it profitable, dignified or noble. 
 That intelligence which directs it may be either 
 your own or that of others ; to the extent that it is 
 yours, you will get the full value that is produced 
 by both your labor and your intelligence. To the 
 extent that it is the intelligence of others which 
 directs your labor, you must share with the others 
 the value of what is produced. 
 
 Do not confound labor directed by intelligence 
 with expert or skilled labor, which may be per- 
 formed in a wasteful, unintelligent and perfunc- 
 tory way. Expert or skilled labor, when working 
 on the separate units of a large structure, or on a 
 large organization, must be directed by a super- 
 vising intelligence, in order that the separate 
 units may be brought each into its proper place, 
 with as little indirection or loss of effort as possible. 
 
 Intelligent labor, or intelligent direction or or- 
 ganization of labor, is that which enables you or 
 others to produce greater results with less or at 
 least the same amount of labor. 
 
THEODORE N. VAIL 
 
 President, American Telephone and Telegraph Company 
 President, The Western Union Telegraph Company 
 
OFFICE FUNCTIONS AND 
 DEPARTMENTS 
 
 By William E. Wilson 
 Consulting Accountant 
 
 WHATEVER your business, your office forms a 
 unified division, independent of the other divi- 
 sions and yet working in close relation with them be- 
 cause it handles their transactions. Its organization 
 must be such as to promote the greatest accuracy and 
 dispatch in the operation. Yet this very unity and in- 
 dependence of organization is hard to attain and must 
 be constantly watched because the work of the office so 
 frequently overlaps the activities of both the production 
 and sales departments. 
 
 The first thought that arises in connection with any 
 organization is that it must have a controlling head over 
 the work and the workers within its jurisdiction. Such 
 a head the office has, usually called the office manager. 
 He is the employer of all the office labor, has disciplinary 
 control over it, and supervision of the work done by it. 
 
 This does not mean that the office manager is the 
 superior and "boss" of all the individuals within the 
 four walls of the office. There are certain officials whose 
 work necessitates their presence in the office who are 
 nevertheless either independent executives directly under 
 the general manager and, therefore, of co-ordinate rank 
 with the office manager, or who belong to one of the 
 other departments of the business. Thus, the purchas- 
 
10 ORGANIZING AN OFFICE 
 
 ing agent usually has a desk in the office and his clerks 
 are under the disciplinary control of the office manager; 
 yet lie is more properly an executive of the producing 
 end of the business, and the office manager has no au- 
 thority over him. Similarly, the sales manager, while 
 occupying the office and having his subordinates in the 
 office force, is in charge of an independent branch of 
 the business. The credit man, too, is a part of the office 
 and yet not himself under the office manager, but either 
 an independent executive under the general manager, or 
 a part of the sales department. The office manager has 
 DO authority over these executives, but he has general 
 control over the clerks and subordinate employees who 
 perform the clerical work in connection with these vari- 
 ous offices. Very frequently the head bookkeeper in 
 direct charge of accounting, or the chief clerk in direct 
 charge of all correspondence and records, or the credit 
 man, holds the position of office manager. 
 
 DIVISIONS into which the work of an office is divid- 
 ed the duties and functions which are ordinarily 
 assigned to each of the seven departments. 
 
 Office work divides itself into two general divisions: 
 first, that relating to accounts, having to do with the 
 making of the records of the concern 's transactions ; and 
 second, that which is purely mechanical, recording or 
 clerical, having to do with the mere forwarding of busi- 
 ness transactions. 
 
 As modern business has developed, this work has come 
 to be divided into seven principal parts, which become 
 sub-departments of the office. Their functions are as 
 follows : 
 
 1. The Purchasing Department the handling of rec- 
 ords attendant upon keeping track of quotations, prices 
 
WHAT TO PLAN FOR 
 
 11 
 
 FIGURE I: This chart shows the function of each of ihe departments of 
 
 the cfficz with the lines of control which bring details to a focus at the 
 
 proprietor s desk 
 
12 ORGANIZING AN OFFICE 
 
 and other data; the making out and following up of 
 purchase orders; the records showing the receipt 'of 
 purchases; the stock record, and the process of pay- 
 ment for purchases. 
 
 2. The Order Department the entry and handling 
 of sales orders as they are turned in by the sales depart- 
 ment or received from customers, and all records at- 
 tendant upon the proper handling until the transaction 
 reaches the accounting department. 
 
 3. The Sales Department the clerical work of han- 
 dling sales records, the follow-up and other data which the 
 sales manager wishes to keep analyzed. 
 
 4. The Credits and Collections Department the 
 handling of the order from the standpoint of gaining in- 
 formation regarding the customer: recording, filing and 
 handling this information; bringing in money due. 
 
 5. The Accounting Department the handling of 
 money and the records pertaining to it, the making of 
 all original entries, the posting of all accounts, the book- 
 keeping records of all transactions with persons who 
 have money relations with the business, the care of the 
 general ledger, the making out of reports and statements 
 of business. 
 
 . 6. Th3 Correspondence Department the opening 
 and distribution of incoming mail, the handling of cor- 
 respondence, the filing of all letters, follow-up work 
 attendant upon general correspondence, the general 
 stenographic, typewriting and filing work of the office, 
 the handling of outgoing mail, the telegraph, telephone 
 and messenger service, and all work pertaining to com- 
 munication. 
 
 7. The Traffic and Shipping Department the rec- 
 ords and data needed by the traffic manager and head 
 shipping clerk bearing on their work, and for the rout- 
 
WHAT TO PLAN FOR 13 
 
 ing of shipments and adjustment of claims. 
 
 Each of these departments will be described in full 
 under the proper headings. The purpose here is to 
 show their general functions and the relation they hold 
 to each other. 
 
 At the head of each department of work in the office 
 is a manager for that department. As in the case of the 
 office manager, this does not necessarily mean that each 
 official has charge of one department and one only. 
 
 DUTIES of the purchasing department the organi- 
 zation essential for the proper keeping of stock 
 records and the satisfactory placing of orders. 
 
 Very often the purchasing agent, for instance, com- 
 bines with his work the duties of traffic manager, or 
 the chief bookkeeper is also head of the correspondence 
 department and of the' order department. The point is 
 that every office has these seven classifications into 
 which its work is divided. 
 
 The chief duties of the purchasing agent are to buy 
 the goods needed by the concern. The work of the 
 purchasing agent divides itself into five departments : 
 
 First, collection of all data regarding quotations, 
 prices and purchases. 
 
 Second, the making out of the actual orders for pur- 
 chases. 
 
 Third, the follow-up of these orders to see that de- 
 liveries are made on time and to take care of whatever 
 changes may be demanded in the purchases. 
 
 Fourth, receiving goods and seeing that they are cor- 
 rect in quantity and quality. 
 
 Fifth, stockkeeping, the handling of records which 
 show the amount of stock on hand at all times and the 
 keeping up of the stock. 
 
14 ORGANIZING AN OFFICE 
 
 The well-organized purchasing department has, in ad- 
 dition to the purchasing agent as manager, an assistant. 
 The work of the purchasing agent is to buy to keep 
 track of prices and markets and to find the right ma- 
 terial at the lowest price. As much of the clerical work 
 as possible should be done by his assistant. The purchas- 
 ing department should also have a clerk to gather and 
 keep records of the various data mentioned under the 
 first division of the purchasing work and another clerk 
 would act as stockkeeper. This is the average and ideal 
 personnel of the purchasing department. It may be re- 
 stricted to the purchasing agent and one assistant, or it 
 might be expanded into a dozen assistants and a hundred 
 clerks. 
 
 ORDER and sales department work in the office falls 
 into the routine of processing incoming orders so 
 as to effect prompt and efficient deliveries. 
 
 The order department is very often a subsidiary de- 
 partment of the sales division of the business, inasmuch 
 as in some organizations all the work of entering the 
 order is put upon the sales department and from it are 
 supposed to come, on the one hand, the instructions to 
 the plant or warehouse to fill the order, and on the 
 other the data needed for making the proper entries on 
 the books. The manager is in charge of the clerical 
 force in the department and he is the first to receive the 
 sales mail as it is distributed in the morning. The work 
 of this department is to make proper and complete entry 
 of the orders from customers, to see that instructions go 
 to the plant or warehouse for filling the orders, to the 
 shipping room for forwarding, to the accounting de- 
 partment for entry on the books, and to the sales man- 
 ager and credit man for their records. 
 
WHAT TO PLAN FOR 15 
 
 The work of this department is divided into four 
 parts : 
 
 First, the interpreting of the order, which is usually 
 done by the manager or his assistant. 
 
 Second, the entry of the order, which is handled by 
 the clerks with the proper appliances. 
 
 Third, the distribution of the copies to the proper de- 
 partments of the business. 
 
 Fourth, the following of the orders to see that they 
 are filled and the order made ready for billing to the 
 purchaser. 
 
 The personnel of the department includes a man- 
 ager, his assistant, who is his understudy in case of ab- 
 sence and who also attends to the work of passing the 
 orders, the entry clerks, the checking clerk, who checks 
 the orders against the customers' letters and sees that 
 the copies get to the proper departments, and the fol- 
 low-up clerk. Here again, the duties can be so combined 
 that all the work is done by a manager and one assistant, 
 or extended to a dozen executives and hundreds of entry 
 clerks. 
 
 The clerical and recording work of the sales depart- 
 ment is so closely related to the work of the actual sell- 
 ing that it is difficult to describe the carrying on of 
 clerical work without describing also the organization of 
 the sales work. The clerical work of the sales depart- 
 ment divides itself into five parts : 
 
 First, the record of sales, which every sales manager 
 wishes to keep and which he secures daily from the 
 record of sales that comes to him from the order de- 
 partment. 
 
 Second, the records the sales manager keeps concern- 
 ing customers, their standing and their purchases from 
 his house from month to 'month. 
 
16 ORGANIZING AN OFFICE 
 
 Third, the records of salesmen, including both the 
 history of the salesman and an accurate record of his 
 sales for the house and his expenses. 
 
 Fourth, the handling of the salesman's expense ac- 
 counts. 
 
 Fifth, the handling of records of the advertising de- 
 partment, which include, first, the records of returns 
 from keyed advertisements in different mediums; and 
 second, the follow-up work, which takes up the big sub- 
 ject of the handling of letters and the follow-up. The 
 organization and working methods of the sales and ad- 
 vertising departments are fully described in other vol- 
 umes, and therefore need not be further elaborated here. 
 
 The credit and collections department is most often a 
 distinct department of the office, although sometimes it 
 is looked upon as a sub-department of the sales division. 
 At the head of this department is the credit manager, 
 whose work divides itself into four classes : 
 
 First, to approve or disapprove of all orders received. 
 
 Second, to gather complete information regarding cus- 
 tomers and prospects. 
 
 Third, to fix the terms of sale and the limit of credit 
 for all customers and sales. 
 
 Fourth, to make collections from customers. 
 
 Bearing on this work, the credit manager has an as- 
 sistant who usually handles the routine of gathering 
 facts, keeping up the information files, and acting in the 
 absence of the manager; a collection manager who is in 
 direct charge of carrying on the collections ; stenog- 
 raphers for handling correspondence with customers ; a 
 clerical force for keeping up the records in the in- 
 formation files, and also the records which the credit 
 manager wishes to keep regarding the sales to customers ; 
 and clerks in the collection department to handle the 
 
WHAT TO PLAN FOR 17 
 
 collection credits and collection follow-up. 
 
 The accounting department is the heart of the busi- 
 ness organism because through it, at one time or an- 
 other, must pass every transaction, from the largest to 
 the smallest, from first to last, of the whole business. 
 The function of this department is to handle work 
 classed as bookkeeping. At the head of the department 
 is the chief accountant, the man responsible for the or- 
 ganization of the accounting department, who is in direct 
 charge of the general ledger. 
 
 "OOOKKEEPING and accounting furnish the history 
 JtD of a business and the records on which future de- 
 velopments are based right plans of organization. 
 
 The work of the accounting department divides itself 
 into entries concerning purchases, entries concerning 
 sales and entries for the controlling or financial accounts 
 of the business. It is, therefore, natural that in the well- 
 organized office, one sub-head, the purchase bookkeeper, 
 who is in charge of the purchase ledger, will in turn 
 have under him the purchase order and invoice clerk to 
 handle the invoices as they come in, check them against 
 the receiving record, and prepare them for proper entry 
 on the books; a disbursement clerk or cashier, to handle 
 the disbursing of all moneys, whether by check or cash ; 
 a payroll clerk, whose title explains his work, and a 
 security or auditing clerk. 
 
 The sales bookkeeper will likewise be in charge of the 
 sales ledger and will have under him an order and sales 
 record clerk to attend to the filing and checking of 
 orders as they come in from the sales department; a 
 cashier to attend to the handling of the money; and a 
 checking or auditing clerk. 
 
 Financial and controlling accounts, covering large 
 
18 ORGANIZING AN OFFICE 
 
 items such as real estate, depreciation, stock and bond 
 issues, dividends and reserve fund, which come close to 
 the heart of a business, are entered in the general jour- 
 nal. This book is usually in charge of the head book- 
 keeper or of his confidential assistant. 
 
 Modern business methods have greatly systematized 
 and simplified the work of the accounting department. 
 Many of the complications and much of the elaboration 
 of the old-time methods have been done away with, mak- 
 ing most of the work of a clerical and mechanical char- 
 acter, requiring less expert bookkeeping and accounting. 
 At the same time, the results have been made more cer- 
 tain, the work itself is more accurate and economy of 
 time has been secured. 
 
 The accounting department is the most likely of all 
 the departments to vary in organization and personnel 
 in different businesses. Very often in cases where the 
 cash business is large, either from purchases or sales, the 
 purchase or -sales bookkeeper himself holds the title of 
 cashier and handles all money. The head bookkeeper 
 sometimes holds the title of cashier and attends to not 
 only the general ledger, but the sales ledger also. What- 
 ever line or classification of duties the character of the 
 business may call for, however, these same duties occur 
 in every business. 
 
 TRANSACTIONS never originate in the correspond- 
 ence department, but its efficient control is essen- 
 tial to the smooth running of any business machine. 
 
 In any transaction, communications pass between dif- 
 ferent employees in the business and between the house 
 itself and outside concerns or individuals. The handling 
 of all such communications lies with the correspond- 
 ence or communication department. This department is 
 
WHAT TO PLAN FOR 19 
 
 yveculiarly without initiative power, for its head, as a 
 rule, has no control over what letters shall be written, or 
 how they shall be written. He merely handles the me- 
 chanical details of this work of the business. 
 
 At the head of the correspondence department is a 
 manager whose work covers eight divisions : 
 
 First, the handling of incoming mail. This is in 
 charge of the incoming mail clerk, who has various 
 clerks helping him in the opening of the mail, in its 
 classification and distribution to the various departments 
 and individuals in the business, and in making the rec- 
 ords, which will be described in connection with mail 
 opening. 
 
 Second, the filing of all correspondence, including the 
 letters received and carbon copies of letters sent out. 
 
 Third, the handling of the follow-up on correspond- 
 ence for the different departments of the office. 
 
 Fourth, the general filing for all departments of the 
 office, including such items as contracts, receipts, copies 
 of orders, and other records. All this filing and follow- 
 up work is usually put in charge of a head filing clerk, 
 who is directly under the manager of the department in 
 charge of the filing clerks. 
 
 Fifth, the handling of the stenographic and type- 
 writing force used in the office. This work is usually 
 in immediate charge of the head stenographer. 
 
 Sixth, the gathering and sending of outgoing mail,, in 
 charge of the outgoing mail clerk, who has assistance in 
 proportion to the volume of work. 
 
 Seventh, telegraph and telephone service, which is usu- 
 ally put in charge of the telephone operator. 
 
 Eighth, the messenger service, consisting of the proper 
 interhouse messengers and also the messenger boys who 
 carry communications outside. These are usually in 
 
20 ORGANIZING AN OFFICE 
 
 charge of the information clerk (frequently the tele- 
 phone operator), who has a desk at the entrance of the 
 office and meets all its visitors. 
 
 The traffic department dictates the routing of all ship- 
 ments, makes arrangements with the transportation lines 
 for rates and services and handles all claims against the 
 transportation companies. Sometimes, though not al- 
 ways, the shipping department is a sub-department of 
 the traffic department. 
 
 At the head of this work is the traffic manager. In a 
 concern of average size, he has an assistant who per- 
 forms the work of routing and of handling the records, 
 a claim clerk who handles the records of claims, and a 
 head shipping clerk, to take charge of shipments. 
 
 A DDITIONAL functions in the routine of office 
 *V work fall upon special executives definite divi- 
 sion of duties places the responsibility for mistakes. 
 
 The office organization here described, with its de- 
 partments and managers and working personnel, is com- 
 petent to carry on the commercial and clerical transac- 
 tions of any business. But there are certain general and 
 advisory work to be done and certain officials necessary 
 to complete the organization. 
 
 One of these is the controller. His duties may be as- 
 sumed by the office manager, the chief clerk, the treas- 
 urer or any executive. He has absolute power over dis- 
 bursements, which he uses as a safety check upon the 
 purchasing department. All purchase orders pass over 
 his desk for approval before they are sent to the pur- 
 chasee, and he can change or cancel them or get further 
 information regarding them at his discretion. His 
 prime duty is to protect the funds of the business, to 
 act as a watchman over its finances, and therefore upon 
 
WHAT TO PLAN FOR 21 
 
 him rests the responsibility for seeing that the business 
 is in good financial condition and has the cash on hand 
 for its transactions. His power extends even further 
 than a check on the purchasing agent. He is a check 
 upon the plant superintendent and, in fact, upon the 
 whole business organization ; and he is responsible to the 
 board of directors alone. If the credit man is taking out 
 a larger total of accounts than the house can safely carry 
 or is extending terms that are longer than the finances 
 of the house will allow, the controller can limit him. 
 
 In addition to the controller, many organizations in- 
 clude an auditor, whose duty is to examine the records 
 of the accounting department and report to the president 
 and directors regarding their condition. This function 
 is sometimes performed by the controller and sometimes 
 the head accountant is called the auditor, although rank- 
 ing with the rest of the heads of departments and sub- 
 ordinate to the controller. 
 
 Neglect to make someone in your business definitely 
 responsible for each of these various duties is to invite 
 error or loss. Knowing these tested lines of organiza- 
 tion, the chief in his office-planning and the department 
 head in his place can make sure that all essentials of the 
 work are in hand and can adapt this tested arrangement 
 of functions to any peculiar need of store, factory or 
 professional business. 
 
 TJJ AVE a well-considered system of doing things, definite and 
 *^ business-like in all departments, not an imitation of 
 something else, but one designed for your own use. 
 
 John Calder 
 
 President, International Motor Company 
 
II 
 
 ARRANGING THE OFFICE FOR 
 EFFECTIVE WORK 
 
 By Wesley A. Stanger 
 Formerly Sales Manager, Royal Typewriter Company, Chicago Branch 
 
 LOST motions in the sales office were recently found 
 to be devouring the profits of a well-organized 
 factory. The manufacturer was confronted with what 
 seemed to be an impossible condition : the difference be- 
 tween the manufacturing cost and the selling price of 
 each unit of product was 400 per cent, yet he was not 
 making money. He had to borrow to keep going. 
 
 The manufacturing cost was known to a nicety. He 
 could not reduce the quality of raw material, cut the 
 pay roll or reduce the number of evolutions necessary to 
 turn out his product. He had had the not unusual ex- 
 perience with unproductive salesmen, but this factor of 
 his costs was not abnormal. He could cut down some- 
 what on the selling expense, but saw no other place for 
 economy. 
 
 Finally he turned his attention to the office. Here he 
 soon discovered that it cost more to bill, charge and 
 collect on each device than to advertise it, and consider- 
 ably more than to manufacture it. Here was the leak ; 
 he was using an antiquated and laborious system. Call- 
 ing in an expert, he learned that lost motion and double 
 steps kept several employees busy doing what would have 
 been simple for one to do under correct arrangements. 
 
 When the expert was through, the manufacturer oo- 
 
PLANS AND LAYOUT 23 
 
 cupied a smaller office. His rent was reduced. He had 
 installed new systems but they were paying for them- 
 selves out of the saving in rent. His pay roll was less 
 than formerly and his office was so arranged that every- 
 thing worked with the same precision as in his factory. 
 From that day he made profits instead of deficits. 
 
 T71ACTORS and principles which help to make the 
 A arrangement of the office effective working plans 
 in which all space is used to the best advantage. 
 
 The need for care in laying out your office is at least 
 as great as in laying out your factory. It is not always 
 possible to have free choice in the location of the office. 
 Relations to a particular business district or to a factory 
 may preclude this ; but whether one is free to choose the 
 building best suited for his needs, or must fit in with the 
 factory plant, he should as far as possible observe the 
 following essentials of effective office arrangement : 
 
 1. Light,' ventilation and quiet. 
 
 2. Accessibility. 
 
 3. Privacy. 
 
 4. Cooperation of occupants. 
 
 5. Continuity of operation. 
 
 6. Business impression produced upon visitors. 
 Light and ventilation are the prime factors in de- 
 termining the efficiency of employees. Their presence is 
 absolutely necessary for accurate and capable work. The 
 office, too, should be as far from outside noises as pos- 
 sible. The tumult of street cars and elevated trains, 
 heavy wagons rattling over the pavements, automobile 
 horns, policemen's whistles these and the thousand 
 other noises that go to make up the confusion of a busy 
 street, distract the thoughts and wear down the strength 
 of even the most energetic in the course of a long day. 
 
24 ORGANIZING AN OFFICE 
 
 In a business district these distractions can best be 
 avoided by renting space in a high building, where the 
 office is well removed from the street. In such an office, 
 also, light and air are not excluded by the surroundings. 
 A factory office should be in a detached building if pos- 
 sible, or at least far away from the heaviest machinery. 
 
 In most offices the arrangement of furniture seems 
 largely a matter of chance. Desks, typewriters, benches, 
 filing cabinets, are all huddled against the four retain- 
 ing walls, and the middle space is left vacant. But va- 
 cant space, at $1.50 per square foot a year, is not a pro- 
 ducing factor. In plotting a room, the desks should be 
 arranged in the center, where access is free from all 
 sides. Wall space is better for filing cases which need 
 to be approached only from one side. A neat alignment 
 of desks in rows with regular aisles secures the greatest 
 economy of space with an appearance of order that is 
 effective for business atmosphere. 
 
 Use partitions sparingly, if at all; even railings im- 
 pede the free movement of an office force. The space 
 which they take up and the necessary aisles on each side, 
 can be used more profitably. Every swinging door or 
 gate takes up nine square feet of space. Without par- 
 titions the entire force is at once brought under the 
 eyes of the office manager. 
 
 Where partitions must be used, they should be made 
 as low as possible, so as not to interfere with proper 
 ventilation. Panel partitions are the most desirable for 
 private offices. These consist of interlocking sections 
 about thirty inches wide by seven feet high, the upper 
 portion being of clear or ground glass to permit the free 
 passage of light. The space above these partitions al- 
 lows the air to circulate through the entire room with- 
 out hindrance. In a factory office, where heavier con- 
 
__ PLANS AND LAYOUT 25 
 
 struction is desirable, the partitions may be made of ex- 
 panded metal lath, erected on three-quarter inch chan- 
 nel iron, plastered on both sides. 
 
 FIGURE II: This office layout is planned to secure the greatest accessi- 
 bility for the public and the highest cooperation between departments. 
 Clear glass partitions secure privacy urithout shutting off the light 
 
 The location of stenographers' desks is a problem in 
 every large office, and its solution is largely a matter of 
 the special requirements of your business. Whether it 
 is better to assemble the stenographers in a central room 
 and assign them individual tasks as they become avail- 
 able, or to distribute them about the office, each corre- 
 spondent and department head having his own stenog- 
 rapher, is a question the answer to which depends largely 
 on the character of the business and the conditions under 
 which correspondence must be handled. One man with 
 constant detail to handle wants his stenographer close 
 to his desk, acting somewhat as a private secretary, while 
 another wishes the typewriting done out of his hearing. 
 
 The principles on which your decision will hinge are : 
 frequency of your dictation calls, number of executives 
 
26 ORGANIZING AN OFFICE 
 
 served by the stenographer and working conditions mosi 
 favorable to each, convenience of typing room to the 
 business desks, diligence and control of the stenographic 
 force. 
 
 For every business, the arrangement of the office is of 
 prime importance, and a man should know the principles 
 of good arrangement and apply them as far as possible 
 to his own business. The relations between departments 
 and officials will, to a great extent, influence the loca- 
 tion of their work. But the placing of one department 
 or executive must not interfere with the proper distri- 
 bution of light and air to other departments and em- 
 ployees. 
 
 Every office needs a lobby or reception room. The 
 'place for this is just inside the main entrance. In 
 offices where visitors are not often required to wait, this 
 may be reduced to room enough for the desk of the in- 
 formation clerk, who is often the telephone operator. 
 Near the main entrance and opening on the reception 
 room, if there is one, should be the offices of the men 
 who are most likely to receive callers. 
 
 LOCATION of each department and executive should 
 bear a close relation to the kind of .work performed 
 and the connection with the rest of the business. 
 
 Some executives make themselves as inaccessible as 
 possible, establishing their offices at a distance from the 
 entrance and hedging themselves about with secretaries 
 and stenographers. The ideal place for the executive, 
 however, is near the main entrance, and a tactful clerk 
 may guard him there against intrusion as effectively as 
 though he were in the farthest corner of the establish- 
 ment. 
 
 The officials who by virtue of their work come most 
 
PLANS AND LAYOUT 
 
 in contact with the public, are the purchasing agent, the 
 cashier, the credit manager and the sales manager. The 
 shipping and receiving clerks, on the other hand, are 
 generally located near a rear entrance or a freight ele- 
 
 FIGURE III: A real estate dealer planned the above layout to use every 
 
 inch of space in a small room. The arrangement is compact, but the three 
 
 offices and reception room meet every need 
 
 vator, so that their work need not obstruct the reception 
 room. 
 
 Your order and entry departments should be near to- 
 
28 ORGANIZING AN OFFICE 
 
 gether, not far from the incoming mail clerk and close 
 to the files of the order department. The bookkeepers 
 should be near the cashier, the billing clerks near the 
 bookkeepers, the order clerks near the billing clerks. In 
 the accounting room, the purchase bookkeeper should be 
 accessible to the purchasing agent and his invoice clerk, 
 the sales bookkeeper to the sales manager and the credit 
 manager. The stores department must be in close touch 
 with the purchasing department to avoid duplication of 
 records, and the disbursing clerk near the stores depart- 
 ment. The timekeeping and employment bureaus are 
 closely allied with the cashier's office and can with ad- 
 vantage be located near it. 
 
 How all these factors are combined in a scientifically 
 arranged office, planned to get the most out of the floor 
 space, and at the same time afford the greatest acces- 
 sibility to the public, the highest development of co- 
 operation between departments, and the best distribution 
 of light, is illustrated in Figure II. The entrance to the 
 suite is at the extreme end of the hall, where the ante- 
 room is located ; at the right is the general office, and on 
 the left are the private offices, all of which have outside 
 corridors. 
 
 Glass partitions separate the offices from the corridors 
 so that there is no lack of light in any part of the suite. 
 Ventilation is easily secured by use of the windows and 
 transoms. Secrecy may be maintained in any of the 
 private offices by closing the doors, yet without shutting 
 out the light from any other section of the office. 
 
 How these principles can be enforced in the arrange- 
 ment of the small store or shop office is shown by the 
 experience of two men who started as partners in the 
 real estate business in a suburban town. They found 
 that the best location they could secure was a very small 
 
PLANS AND LAYOUT 
 
 store room near the railroad station. Its value, from 
 their point of view, lay in the fact that it stood directly 
 in the path of the class of people they wished to attract 
 business men who went daily to and from the city. 
 
 FIGURE IV: In this office, work is carried from official to official in 
 
 a straight line. Retracing of steps is to a large extent cut out and lost labor 
 
 is minimized 
 
 In spite of the small space at their command the 
 room was only 14x16 feet they found they were able, 
 by careful arrangement, to make it conform to their 
 needs. Figure III shows how they succeeded in making 
 of this compact room an attractive, business-like office. 
 
 One quarter was partitioned off to secure privacy in 
 the transaction of intimate business. Besides the desk, 
 this private room was made to contain the correspond- 
 ence files and a visitor 's chair. The reception room oc- 
 I cupied the quarter diagonally opposite, just inside the 
 / door. Across the counter, next the door, the necessary 
 routine of sales and collection was transacted with the 
 public office. The stenographer was located in the far 
 quarter of the room, convenient as an information 
 
80 ORGANIZING AN OFFICE 
 
 clerk and yet partially shut off in an office of her own 
 by the stove and a low railing. Two large front win- 
 dows gave valuable display room and at most times, 
 plenty of light. Results showed that this careful layout 
 furnished ample space for business with neither lost 
 motion nor overcrowding. 
 
 Tj^XAMPLES of offices in which the fundamental 
 --J principles of arrangement are followed out to secure 
 the prompt and effective handling of all work. 
 
 In the thoroughly well arranged office, continuity of 
 operation is essential. An example of a layout for direct 
 routing of work is shown in Figure IV. Every process 
 of office work is carried on in a straight line, with as 
 little lost motion and retracing of steps as would be 
 found in a modern lathe room. The processes so follow 
 each other and the departments are so located that the 
 idea of continuity is at once apparent. No department 
 retards or interferes with the work of any other. The 
 minute there is any slow-up, it is easy to find in just 
 what department delay is occurring. 
 
 The office manager, by the location of his own room 
 opposite the main entrance, can keep tab on all business 
 passing in the general office. Next to the office manager 
 sits the general manager with the door of his office also 
 leading into the general office. Opposite the general 
 manager and adjoining the general office is the auditor, 
 and in a line with his door stands the vault. A narrow 
 passageway leads to the drafting room, which is sepa- 
 rated from the entrance, maintaining its privacy. 
 
 Left of the main entrance is a long hall with offices 
 leading away from it. The salesmen's room is located 
 near the exhibition room where the samples are kept on 
 display. The sales manager has the office next to the 
 
PLANS AND LAYOUT 
 
 salesmen. The president of the company is located at 
 the end of the hall with his private secretary conveni- 
 ently near. This arrangement secures quick handling of 
 routine work. 
 
 FIGURE V: A large reception room, suck as this office provides; gives 
 
 the visitor a favorable impression. The row of private offices suggests 
 
 large operations, and has the same value as a strong advertisement 
 
 Next in importance to convenience for the employees 
 is the general impression which an office makes on a 
 visitor or prospective customer. This impression has 
 much the same effect as the personality and dress of a 
 salesman. What the caller is able to see from the recep- 
 tion room may cause him to form unconsciously an 
 opinion of the business either favorable or unfavorable. 
 
 For this reason a wise executive arranges his office in 
 the manner most appropriate for his business. A bank 
 usually plans for stability and soundness in its archi- 
 tecture and conservatism in its office arrangement. In 
 the real estate office, the arrangement of desks, maps and 
 safe deposit fixtures, emphasizes in a practical way the 
 solid business operations of the concern. 
 
32 ORGANIZING AN OFFICE 
 
 In this, you need make no attempt at extravagant 
 show; to make the " office dress" bespeak prosperity or 
 magnitude is less effective than to plan for maximum 
 efficiency and let this speak for itself. The office should 
 in every way reflect the true merits of the concern 
 should wear the business-like working clothes of an effi- 
 cient enterprise. Order, neatness, stability and business 
 taste should be the fundamental factors in determining 1 
 the arrangement. 
 
 An office giving this good general impression is shown 
 in Figure V. The reception room is large and the 
 private offices lead away from it on three sides. A 
 visitor can take in the entire scheme at a glance, and 
 the rows of private rooms which he notices suggest mag- 
 nitude in operations, especially when the occupants are 
 frequently passing out and in. 
 
 It is not possible to lay out every office on the lines 
 given above. The size and shape of the room require 
 departure from any ideal. But when the offices and 
 desks are arranged as far as possible so that the processes 
 of business take a direct route and their location is such 
 as to offer the best possible facilities for light, ventila- 
 tion and quiet, you are reasonably sure of greater effi- 
 ciency , and less confusion and loss of time. 
 
 TN BUSINESS this is the day of system. The business 
 * man who trusts to chance and circumstance finds his way 
 beset with those obstacles which like reefs have gathered 
 many business wrecks upon their crests. 
 
 Jeremiah Dwyer 
 
 Founder, Michigan Stove Company 
 
Ill 
 CONTROL AND MANAGEMENT 
 
 By Charle* E. Cake 
 
 AS a business outgrows one-man supervision, the wise 
 executive plans for the focus of essentials at his 
 desk. The president of a large organization is an imper- 
 sonal executive. He is made so by the great amount of 
 detail which must be done by a corps of assistants. To 
 see personally all these assistants would, in the first 
 place, disturb system, and in the second place, render 
 impossible any careful supervision of a great business. 
 In rare instances only do the subordinate employees of 
 the company come in personal contact with the president. 
 Seldom does the department manager, who is a lieu- 
 tenant to the executive, carry the matters of his depart- 
 ment direct to the president, and yet every movement 
 that these assistants make is by order of the president. 
 
 Jt becomes necessary, then, to handle this detail 
 through a particular method which will enable the ex- 
 ecutive to receive information upon the progress of the 
 business and then direct its operation. This is really 
 the basis of executive system, and it can be so perfected 
 as to bring to your business both definiteness and pre- 
 cision. 
 
 An excellent example of a business organized with 
 this aim of focusing details is found in a large middle 
 west concern. This business is divided into fifteen gen- 
 
84 ORGANIZING AN OFFICE 
 
 eral departments. These departments of the general of- 
 fice operate the eight districts, which, in turn, embrace 
 the numerous branch houses of the company situated at 
 every important commercial point in the United States, 
 as well as the firm's foreign interests. 
 
 EXECUTIVE committees are guided by department 
 and district reports in which every non-essential 
 is brushed away and only the big tendencies are shown. 
 
 The problems, policies and results of these various de- 
 partments, districts and individual branch houses are 
 concentrated in the executive committee, composed of 
 the secretary, vice-president, treasurer and general man- 
 ager, with the president as chairman. This committee is 
 the cabinet, meeting every morning in the president's 
 office at eleven o'clock. All important matters and 
 policies are considered at this meeting. It is a summary 
 of the results of the past twenty-four hours and a 
 source of instruction and inspiration for the following 
 day. Here again is evidence of the need to concentrate 
 all detail in order that the president may grasp the 
 workings of every department without having to analyze 
 the reports. 
 
 The departments, which are general in character, re- 
 port to the officers forming the executive committee. 
 These officers, therefore, are fully versed in the operation 
 of the business before they go to the committee meet- 
 ing. The president is thus enabled each morning to re- 
 ceive from these lieutenants full information in a few 
 minutes' time covering all departments. 
 
 The department managers are trained specialists, be- 
 cause the matters coming under their jurisdiction require 
 that they be thoroughly conversant with the affairs of 
 their respective departments. The district manager is a 
 
MANAGEMENT 35- 
 
 generalist, because he concerns himself with all the 
 phases and details of the branches under his charge. 
 
 The department managers are usually stationed in 
 the general offices. The district managers, who repre- 
 sent the president and his cabinet in the field, are lo- 
 cated at strategic points and exercise jurisdiction over 
 their districts in harmony with the president 's policies, 
 and instructions, although perhaps a thousand miles dis- 
 tant from the president's desk. 
 
 The president is kept informed by the department 
 managers regarding the general affairs of their respect- 
 ive departments. Specific features of the business re- 
 quiring the consideration of the president and executive 
 board are submitted to the committee by the department 
 managers, who in turn receive specific instructions from 
 their respective "cabinet officers" at the close of the 
 committee meeting. Thus, in an hour, a world-wide 
 business is examined and given new impetus. If any 
 other method were followed it would be impossible in so- 
 short a time even to ascertain the progress of the busi- 
 ness. 
 
 No detailed reports are made direct to the president. 
 All branch reports ultimately reach the department con- 
 cerned, first passing through the hands of the auditor. 
 The receipt of each statement is immediately recorded 
 in a statement record book kept by the auditing depart- 
 ment. This record gives the name of the branch, the 
 name of the report and date, and evidences in a simple 
 manner the fact that certain statements have been re- 
 ceived,- and also provides a concise record as to the 
 promptness of the various branches in submitting their 
 statistical reports. These reports are tabulated in various 
 summary records by the auditing departments, and these 
 records only are placed before the president. He sel- 
 
ORGANIZING AN OFFICE 
 
 dom sees the report itself unless some unusual matter 
 brings it to his personal attention. 
 
 Copies of all reports submitted by the branch houses 
 to the general office are mailed simultaneously to the 
 respective district managers. This serves as a double 
 check on the business done by the branch houses and 
 keeps the district manager fully informed regarding all 
 the interests of his district. The district manager him- 
 self makes his weekly report to the general offices, in- 
 dependent of the local manager. The department man- 
 ager is in a position to judge how efficient and successful 
 the services of the branch manager are, and can suggest 
 any change or improvement affecting a branch house 
 without having to consult with its manager. 
 
 Every feature of the business is covered in the weekly 
 reports of the different departments, and reports are 
 fully itemized. 
 
 A summary of the various branch house reports is sub- 
 mitted to the president weekly. 
 
 On his desk, the president continually keeps a state- 
 ment showing in detail the profits of the various branches 
 for the preceding month, the net results to date from the 
 beginning of the fiscal year, and the same figures for 
 the previous year. In this way, the chief has a profit- 
 and-loss history of the business always before him. 
 
 DIVISION of responsibility and the common inter- 
 change of ideas about mistakes and valuable ex- 
 periences prevents any employee from going far wrong. 
 
 Thus the president receives information which enables 
 him to direct the complex affairs of the corporation. Its 
 course is from the local representative to the district 
 manager; then to the department manager; next, to the 
 executive committee; then to the president. With this 
 
MANAGEMENT 37 
 
 system of supervision, the beneficent effects of a local 
 manager's personality on the business under his charge 
 are retained, and any shortcomings or delinquencies on 
 his part are promptly ascertained and remedied. 
 
 So it is with the operation of the districts and depart- 
 ments. No one employee can go very far wrong. Re- 
 sponsibilities are borne jointly. Technical information 
 is not a matter of individual, but of general knowledge. 
 The experience of one is the experience of all. The les- 
 sons learned at one branch are immediately available in 
 the operation of all the other interests of the corpor- 
 ation. 
 
 The president directs the operation of the business by 
 the channels through which he receives his information, 
 but his instructions touch practices of general impor- 
 tance. The department managers at all times are fully 
 informed regarding the president's policies and desires, 
 and it is only in the larger affairs of the company that 
 the president finds it necessary to issue specific instruc- 
 tions. When occasion requires, the department man- 
 ager communicates direct with the president, usually by 
 letter, and his communication is returned to him either 
 with a reply noted thereon, or an invitation to see the 
 president personally regarding the matter. This request 
 is in the form of a sticker bearing a number, a duplicate 
 of which is retained by the president's secretary until 
 the matter is adjusted. The same system is applied to 
 all communications from department, district or local 
 managers which the president wishes to refer to any of 
 his assistants in the general office. 
 
 The ramifications of this business are such that it is 
 impossible for the president personally to visit and di- 
 rect the outside forces. He has little time for inspecting 
 
88 ORGANIZING AN OFFICE 
 
 his branch houses. He can rarely concern himself with 
 details of any sort. He can only direct through the 
 agency nearest to him, and that agency, whether cabinet 
 officer or department manager, takes over the responsi- 
 bility and, in turn, sends the instructions where they 
 belong. 
 
 Just as a costly machine is reserves for its most profit- 
 able work, so such a plan as thL i:. any business enables 
 those executives and department heads who can deliver 
 expert judgments, to avoid details and make their influ- 
 ence count in the larger questions on which business suc- 
 cess or failure depends. The wise executive is he who 
 grasps these principles of true management and dele- 
 gates to subordinates whatever forms of detail service 
 an be bought. 
 
 TF a young man does not find romance in his business, it 
 is not the fault of the business, but the fault of the young 
 man. Consider the wonders, the mysteries, connected with 
 the recent developments in that most spiritual of all agents 
 electricity, with its unknown, and, perhaps, even unguessed 
 powers. He must indeed be a dull and prosaic young man 
 who, being connected with electricity in any of its forms, is 
 not lifted from humdrum business to the region of the mys- 
 terious. Business is not all dollars. These are but the 
 shell the kernel lies within, and is to be enjoyed later, as 
 the higher faculties of the business man, so constantly called 
 into play, develop and mature. 
 
 Andrew Carnegie 
 
 Founder, Carnegie Steel Cc 
 
IV 
 
 MACHINES INSTEAD OF 
 CLERKS 
 
 By Kendall Banning 
 
 A CERTAIN manufacturer decided to do something 
 radical to reduce the excessive cost of paying his 
 men. He called in the head timekeeper. 
 
 "Watkins," he said, ''something has got to be done 
 to reduce the cost of operating your department you 
 must tone up the general efficiency of your assistants ; it 
 can't be done, you say? well, this is a problem which 
 you are paid to handle ; do what you think is necessary, 
 but reduce your department expenses." 
 
 After investigating the different machines on the mar- /\ 
 ket, the head timekeeper purchased an addressing ma- ^ 
 chine which .^ould operate at the rate of fifty per 
 minute and ar~computing_machine with which it was pos- 
 sible to add, subtracter multiply with a speed and 
 degree of accuracy altogether beyond the most efficient 
 clerk. 
 
 Equipped with these devices, he set about reducing 
 the cost of operating his department. 
 
 The most laborious task had been that of six clerks 
 who did nothing but write the names on time cards,, time 
 tickets, pay envelopes and on the pay roll for four entire 
 days in each week. Altogether there were 18,000 names 
 to write each week. The addressing machine turned out 
 this work in a day and was operated by an office boy 
 
40 ORGANIZING AN OFFICE 
 
 earning only $1.50. This was a considerable saving over 
 the wages cf six clerks for four days, amounting to 
 $48.00. Nor was the saving of labor the only good thing 
 about the new method of handling the work. The names 
 were far more legible than when they were hand written, 
 and the chance of making mistakes was reduced. 
 
 Next to copying names, the most laborious task had 
 been that of computing wages. It required two full 
 days for the six clerks to total up the number of hours 
 put in by each man and then to multiply this by his 
 hourly rate. Not only was the time expended on this 
 work too great, but owing to the necessity of getting the 
 work finished in time to pay the men, all of the clerks 
 worked at high speed and consequently made many mis- 
 takes. The labor entailed in figuring the piece work was 
 equally trying. 
 
 Today all of this work is done by two girls with the 
 aid of an adding and computing machine. Here again is 
 a large saving the services of two girls cost $8.00 for 
 two days, where the services of the six men cost $24.00. 
 
 INSTALLATION of up-to-date time and labor-saving 
 .1 machines results in the quick and correct performance 
 of work formerly handled by clerks. 
 
 Only the office manager who has had an experience of 
 this sort appreciates how essential it is to keep in touch 
 with the development of time-saving, labor-saving and 
 business-building devices. Most employers are so ac- 
 customed to having work done the old way that they 
 fail to see just where new methods in the office means 
 advantage to them. 
 
 It is not yet too late to refer to the 'iele^hone as 'a 
 modern machine. Only some thirty years ago there were 
 but slightly over a thousand of these "new f angled de- 
 
MACHINES FOR CLERKS 41 
 
 vices" in operation in the entire city of New York and 
 only one central office. To-day there are hundreds of 
 thousands in use, averaging around a million calls a 
 day. 
 
 With the telephone have come its many adaptations to 
 the peculiar needs of every business ; chief among them 
 are the telephone ^^xtensionj^wires that permit any 
 number of receiving instruments Tn as many private 
 offices to be connected with a main or "trunk" wire. 
 This service requires a switchboard and usually a tele- 
 phone girl. Some of the larger offices operate large 
 switchboards that have a dozen or more trunk wires and 
 innumerable extensions to the various departments. By 
 this means, too, one department may be connected with 
 another through the medium of the switchboard without 
 using the trunk at all. To save time and delays, private 
 inter-department telephone systems connect one office 
 direct with another, thus eliminating the switchboard 
 entirely. 
 
 A new office mechanism is a new business opportunity, 
 and the successes scored by some dealers in doing busi- 
 ness by telephone suggest that most men are slow to take 
 advantage of such opportunities. The typewriter is an- 
 other illustration of an appliance which has made over 
 the world of longhand writing, yet is rarely used to best 
 advantage. 
 
 ) rpYPEWRITERS and the host of machines that 
 
 A followed have done aicay with the old fashioned 
 and often illegible method of longhand correspondence. 
 
 The significance of this invention lies not only in the 
 speed, accuracy and legibility of the business communi- 
 cation, but also in the long series of attachments for 
 calculating, perforating and duplicating, and of appli- 
 
42 ORGANIZING AN OFFICE 
 
 ances for reproducing and filing typewritten work. Be- 
 fore the invention of this machine, the number of words 
 written in the approved commercial style by a good pen- 
 man was scarcely more than twenty-five a minute. The 
 record number of words produced with accuracy on a 
 modern machine is over one hundred a minute. Carbon 
 paper makes it possible to imprint up to a dozen copies 
 of the original writing at once. Filing systems for cor- 
 respondence have resulted that before were confined to 
 clumsy letter-press books in which copies of communi- 
 cations were necessarily arranged chronologically. 
 
 A new principle of the typewriter has simplified 
 the former laborious billing process. By using a good 
 quality of carbon paper, a label or order can be made 
 out with as many as twenty carbon copies for records in 
 the various departments. Seven or eight copies are usu- 
 ally enough, however. Special attachments automatically 
 care for proper spacing and columnar work. 
 
 Following the introduction of the typewriter came a 
 ihost of machines for imitating typewritten work, fol- 
 lowed by machines for signing them with f ac-simile sig^ 
 < natures, folding them, addressing envelopes, sealing, 
 stamping, counting, cancelling and tying them in 
 bundles. With these appliances the modern form of 
 -circular letter was made possible in quantities never 
 dreamed of in the old days. The turn of a crank or elec- 
 tric switch sets going a series of machines that grind out 
 letters signed, stamped and sealed, sorted into geograph- 
 ical piles, and tied up in numbered bundles ready to be 
 -dumped into the proper mail bags. 
 
 Machines for reproducing typewritten letters range 
 from a simple duplicating machine costing* a small 
 sum, to mechanisms capable of "turning out between 
 three and eight thousand letters an hour. 
 
MACHINES FOR CLERKS 43 
 
 These machines are of different types; one type re- 
 produces a letter by the gelatine transfer process; an- 
 cther by the stencil duplicating process; and a third is 
 based on the principle of the printing press with the 
 addition of an ink ribbon between type and paper to 
 give the reproduction the appearance of actual type- 
 writer work. 
 
 This one notion alone has effected radical changes in 
 methods of business by opening up heretofore impossible 
 channels of trade so far away or numerous as to sup- 
 plant salesmen 's calls. 
 
 Such correspondence, recognized as "form letters/' 
 loses much of the influence that personal communications 
 demand. One ear-mark of a machine-made letter was 
 formerly the lack of the approved name and address of 
 the addressee ajtove the salutation. Now the types se- 
 lected for use oinmulti-copying machines are designed to 
 conform exactly withlhe letters on the various makes of 
 typewriters, so that a& filling ji\" of a personal heading 
 on a machine-made letter may not be differentiated from 
 the body of the letter if the typewriter ribbon matches 
 the color of the ink which is used on the manifolding 
 machine, and if the spacing is adjusted the same on 
 both machines thus giving each letter the semblance of 
 a personally dictated communication written especially 
 to the addressee. An experienced typist may "fill in" 
 between 800 and 1,200 letters a day. Devices are now 
 being attached to typewriters that give the "filled in" 
 -salutation perfect alignment with the body of the form 
 letter. An autograph signature in zinc etching can be 
 printed on the letter in black or purple ink. 
 
 Folding letter sheets so that they fit into their en- 
 velopes does not require skilled labor, but it does require 
 a facility that runs up the expense of circularizing if 
 
44 ORGANIZING AN OFFICE 
 
 the job is done by hand. Assuming that 50,000 letters 
 are to be sent out, an expert worker might be able to 
 fold 6,000 a day, or ten workers might do the job in a 
 day of eight hours. Where quick mailing is a factor, as 
 in a mail sales campaign, hand labor is a serious handi- 
 cap. 
 
 This volume of work may now be done in a day by an 
 inexperienced clerk or officejx>y by merely feeding the 
 sheets into the trough of a folding machine, operated 
 by a motor. There are two styles of folding machines, 
 one wording on the same principle as the fold- 
 ing devices on a newspaper press, the other a small de- 
 vice of rubber rollers. Considering the labor cost, the 
 economy of office machinery over hand work is a factor 
 to be reckoned with when work in large quantities is to 
 be done. 
 
 A device which eliminates the expense of addressing 
 envelopes is the open-front envelope. That section of the 
 envelope which usually holds the address is made trans- 
 parent; the letter or invoice inclosed is then so folded 
 and placed that the superscription is visible through the 
 transparency and becomes the address. 
 
 The next step in the making of a letter is the sealing 
 of the envelope. The good old-fashioned scheme of lick- 
 ing the flap of the envelope with the tongue prevails now 
 only in isolated cases. The moistened sponge projecting 
 from a glass receptacle and numerous small hand-sealers 
 are adapted to a small volume of routine mail. When 
 the daily correspondence runs up into four or five fig- 
 ures, the envelopes can be sealed on an appliance that 
 works more quickly and accurately than a whole depart- 
 ment of workers. The envelopes are merely fed into a 
 chute. The turn of a crank starts the machinery that 
 moistens the flaps, closes them, stacks them under pres- 
 
MACHINES FOR CLERKS 45 
 
 sure on a drying rack and counts them as a check upon 
 postage disbursements at the rate of 6,000 an hour 
 or more, depending upon the style of machine. 
 
 A newer machine will now seal, count and stamp 
 envelopes with one operation. A boy can feed in the 
 envelopes and the machine will turn out the work at the 
 rate of 5,000 an hour. 
 
 The stamping of envelopes can be done at the rate of 
 5,000 an hour by a machine that can be operated by any 
 boy or girl. The envelopes are supplied to the machine 
 and the stamps are fed in long rolls. Such machines 
 also register the stamps used, so that the count may be 
 checked against the stamps issued and against the en- 
 velopes that are counted on the sealing machine. As a 
 further check against loss, many large concerns now 
 perforate their stamps for purposes of identification. 
 The machine for thus marking them the perforation is 
 usually in the form of the initials of the firm as simple 
 and inexpensive, and acts upon several hundred stamps 
 at each operation. Some firms, also, by arrangement 
 with the postal authorities, cancel their own stamps by a 
 similar process a system that guards against theft and 
 facilitates the work of postal clerks, thereby avoiding 
 mailing delays. 
 
 /COMPUTING machines, the talking machine and a 
 V_x dozen other ingenious inventions have resulted in 
 far-reaching economies in the operation of modern offices. 
 
 These facts are impressive because they reflect the 
 spirit of modern business life a life that is conspicu- 
 ously alert to do more and better work, at less cost of 
 time, money and effort. It was only a few years ago 
 that much of the factory work now being done by ma- 
 chinery was done by hand, and the world marveled at 
 
46 ORGANIZING AN OFFICE 
 
 the almost human adroitness of Yankee mechanisms. 
 The same ingenuity has been applied to the invention of 
 office machinery. The office output has increased pro- 
 portionately. 
 
 Computing machines have gone so far beyond ele- 
 mentary stages that mental calculation is practically 
 done away with in many large business offices. In addi- 
 tion to pay roll calculation, such appliances in standard 
 and special makes are used for handling numbers and 
 fractions, making inventories, estimating and computing 
 interest and discounts, figuring time, distance, scores, 
 yardage and other units. Card prmpjvjrip Rr ./i grating- 
 machines have made classifications and statistics of the 
 most intricate kinds a matter of hours instead of weeks 
 and have thus contributed to the exactness of business 
 
 (building as a science. 
 
 The talking machine, beginning as a mere ingenious 
 toy, has developed into another office machine of thor- 
 oughly practical value that is materially cutting down 
 the cost of handling executive work by simplifying the 
 dictation of correspondence. These machines are modi- 
 fications of the wax-cylinder phonograph and are oper- 
 ated by talking into the mouthpiece and thus making 
 records. By the use of various attachments, the dicta- 
 tor may start and stop the machine at will, increase or 
 decrease the speed, repeat, make corrections,, and do 
 practically all the work that is ordinarily expected of a 
 stenographer. The cylinder records, when completed, 
 are transferred to the machine of the typist, who, plac- 
 ing the receiving tubes to her ears, transcribes the re- 
 corded words, adjusting the speed nicely to suit her 
 convenience. "When a wax cylinder is once used it is 
 shaved and re-used a process that may be repeated 
 many times before the wax must be replenished. 
 
MACHINES FOR CLERKS 47 
 
 This system has proved a great economy ; and it is of 
 special value in offices where the demand for steno- 
 'graphic service concentrates on short periods and abates 
 between whiles, thus overworking the stenographers at 
 special hours, with intervals of wasted time. 
 
 There are machines for wrapping and tying bundles, 
 that will wrap and tie packages of a uniform size at a 
 high rate of speed. Other devices number sheets, chang- 
 ing their figures automatically at each impression or 
 repeating, as may be desired. 
 
 There are machines into which miscellaneous coins 
 may be dumped and from which they are issued, by the 
 turn of a crank, neatly sorted according to denomina- 
 tions, counted and wrapped in bundles. This money- 
 sorter consists of a shallow metal tray, circular in shape, 
 in which the coins are placed. By revolving this tray 
 the coins are thrown to the outer edge by centrifugal 
 force, when they drop into the proper grooves and roll 
 into cylinders which indicate the number of coins. 
 
 A companion machine is a device which dispenses with 
 the labor of making change by dropping the proper 
 coins in response to pressure on the figures of its key- 
 board. 
 
 Time recorders check the exact minute of arrival and 
 departure of office employees machines that operate with 
 a clock attachment and which, in response to the work- 
 er's punch, print on tabular sheets of paper his prompt- 
 ness and delinquencies. Arrivals later than the time 
 scheduled, or departures earlier than the hour estab- 
 lished, may be printed in colors that flash their message 
 to the boss from among their less conspicuous fellows. 
 Another time recording machine is a compass-like de- 
 vice which cuts out hours of clerical work by computing 
 the actual working time of employees. The use of time 
 
48 ORGANIZING AN OFFICE 
 
 records has improved discipline in offices and shops so 
 perceptibly as to increase workers' efficiency several per 
 cent. 
 
 Retail store fittings that are being used in offices are 
 the overhead cash and package carrier and the pneumatic 
 tube. A large editorial office in New York is equipped 
 with such service between desks and departments which 
 are located on different floors. It has found the service 
 to be quicker and safer and considerably less expensive 
 than a corps of office boys. 
 
 Besides the labor saving and protective office machines 
 here mentioned, there are, of course, many others. For 
 instance, the check protector, which perforates checks 
 and prevents fraud ; and the rubber date stamps, which 
 record time and set themselves for each succeeding 
 day; watchmen's records, which graphically show each 
 time the door is opened; the machine which figures pay 
 rolls by the hour, day or month, and in fractions and in 
 whole numbers. 
 
 OUBSTITUTION of machines for hand-labor econo- 
 O mizes not only in clerk-hire, but also in the amount 
 of floor space used and the number of errors made. 
 
 But after all these mechanical devices have been de- 
 scribed, the most vital office equipment of all has not 
 been mentioned the one sheet or unit system of record- 
 keeping. The card index and loose-leaf, by facilitating 
 and dispensing with clerical work, were really the pio- 
 neers in the field of office efficiency. As their applica- 
 tion was extended to meet every phase of business, me- 
 chanical devices kept pace. Now, with the vertical filing 
 cases, card records, and loose-leaf systems of account- 
 ing, the modern office has hardly a trace of resemblance 
 to the office of a generation ago. 
 
MACHINES FOR CLERKS 49 
 
 As an illustration of the savings the ordinary office 
 may effect by substituting machine work for hand labor, 
 the manager of a firm in the middle west recently ap- 
 proximated the weekly cost of doing the office work now 
 as compared with the costs if the work were done with- 
 out mechanical aid. Here is his approximation : 
 
 Weekly Saving 
 
 Addressing letters $ 34.00 
 
 Folding letters 51.00 
 
 Billing machines 25.00 
 
 Sealing machines 17.00 
 
 Imitation letters 208.00 
 
 Adding machines 20.00 
 
 Indicators 15.00 
 
 Time clocks 12.00 
 
 Typewriter attachments 16.00 
 
 Total . . , $398.00 
 
 The office whose work is done by the pressure of elec- 
 tric buttons and the turning of levers is no longer a fic- 
 tion. Your office management is not fully effective ex- 
 cept you recognize as business opportunities the labor- 
 saving and trade-getting appliances your work calls for 
 and keep in touch with progress in those machines best 
 suited to the size and range of your business. 
 
 1Y/TANY a profit dribbles into the waste basket through the 
 * myriad discardings of petty supplies. Nowhere are 
 pennies more unconsciously wasted than in the average busi- 
 ness office, and nowhere, once the habit has been formed, can 
 they be more easily saved. 
 
 John M. Eaton 
 
THE BUSINESS MAN'S DESK 
 
 By Edward Mott Woolley 
 
 OUR modern philosophy of desks has become almost 
 as concrete as the philosophy under which a lathe 
 or dove-tailing machine is operated. This philosophy 
 looks upon the desk, not as a piece of furniture, but as 
 a working appliance. It is the pivot upon which swings 
 all the executive detail. If something is wrong with one 
 of its cogs or pinions the work of the executive is thrown 
 out of adjustment. If the delayed orders, the lost sales, 
 the misunderstanding of instructions, or the general in- 
 competence of the office force are traced back, they are 
 more than likely to lead to the desk methods of the ex- 
 ecutive himself. 
 
 We all know the old-fashioned roll-top desk the 
 "high roll," with its maze of pigeon-holes and curious 
 compartments under the sliding lid. We still see it in 
 common use, though in offices that have studied the sub- 
 ject it is disappearing. In its place has come either the 
 "low roll" or the flat-top desk. The former has very 
 few pigeon-holes and the latter none at all, though both 
 are equipped in another way. 
 
 When the old-fashioned roll-top desk came into use 
 there was a reason for all these pigeon-holes and com- 
 partments. That reason lay in the absence of other 
 known facilities for taking care of desk detail. Here, in 
 
DESK WORK 51 
 
 front of the executive, lay his only available working 
 file. When he had read his morning's letters he chucked 
 them into one of the compartments until he could an- 
 swer them nor was he particular in his selection of 
 compartments. Sometimes pending correspondence be- 
 came mixed with estimates, bills, reports or other docu- 
 mentary matter and was forgotten for days or weeks. 
 The same thing happened to estimates, bills and reports. 
 And down below, in the drawers, accumulated a wonder- 
 ful mixture of catalogs, customers' lists, cost and ex- 
 pense reports, complaints and cigars. Similar conditions 
 prevail today in many offices, despite the fact that desk 
 mechanism has made such methods obsolete. In your 
 office and among your workers you can find no more 
 profitable point of reorganization than in systematizing 
 the work and arrangement of the individual desk. 
 
 The old-time desk manufacturer had no particular 
 kind of business in view when he got up that huddled 
 group of pigeon-holes and honey-combed openings. In 
 his mind they represented a composite need equally 
 available for a lawyer, doctor, manufacturer or merchant. 
 His chief aim was to get pigeon-holes enough so that 
 somewhere among them might be found compartments 
 to suit special needs. 
 
 Now, the lawyer needed oblong holes for his legal doc- 
 uments; the doctor required compartments of a certain 
 size for his prescription blanks; the manufacturer called 
 for a suitable receptacle for his factory reports. Thus, 
 when a merchant bought a desk, he bought not only 
 equipment for himself, but for every other sort of busi- 
 ness in the directory. Consequently, he jammed his un- 
 answered correspondence into the place intended for th& 
 lawyer's writs, and kept doing things of this sort until 
 his desk resembled a prize-contest puzzle. Half the ex- 
 
62 ORGANIZING AN OFFICE 
 
 ecutive's time was spent in searching for documents that 
 might have been anywhere from the topmost crevice to 
 the bottom drawer. 
 
 But the age of specialization dawned, and desk manu- 
 facturers began to study the problem of saving the ex- 
 ecutive 's time. It was seen that the outward form of the 
 desk was no more than a building in which to house a 
 more or less intricate machine. 
 
 SELECTION of the right kind of desk and the proper 
 O arrangement of information in it prepares the way 
 for the efficient handling of the day's work. 
 
 The chief attention, then, was given to the machine, 
 and not to the walls that enclosed it. But the same 
 machine would not do for every kind of business. So, 
 as these business wants were studied, special adaptations 
 were made not so much in the desk itself as in the in- 
 terior layout. The desk, in other words, became a sort 
 of filing cabinet for papers in the course of administra-- 
 tion. 
 
 Then the desk developed still further and became not 
 only a filing cabinet for certain classes of pending docu- 
 ments, but a working index for subsidiary current files. 
 That is what the modern desk is today. 
 
 The nature and extent of the business, of course, must 
 determine the mechanism of the desk. Some executives 
 find it possible to make the desk itself hold all or most 
 of their pending papers; in order to accomplish this, 
 they avail themselves of numerous adaptations for get- 
 ting just the filing facilities needed. Instead of buying 
 'drawers and compartments without' any analysis, they 
 chart their requirements and get the drawers or sections 
 they want. If they need card-index systems chiefly, they 
 buy the drawers designed for that purpose; if their 
 
DESK WORK 53 
 
 papers are large, like the average letter, they equip 
 themselves with vertical filing drawers; if they have 
 many documents of legal size, they get document sec- 
 tions. Or they combine these compartments in the pro- 
 portion that best suits them. 
 
 But if the business is larger, or for any reason it is 
 not desirable to turn the whole desk into a file, then the 
 subsidiary desk file comes into play, while the desk itself 
 is more or less simplified. 
 
 Take a typical ' * low roll ' ' desk and inspect its mechan- 
 ism. In the space immediately under the lid you find 
 not more than half a dozen receptacles. One is the 
 locked drawer for valuables ; the others are for pens and 
 pencils, letter-sheets, envelopes, check-book and bank- 
 book. 
 
 The upper left-hand drawer, instantly available to 
 the executive as he turns in his swivel chair, contains the 
 card-index. The shallow center drawer is divided into 
 little bins for clips, pen-points, rubber bands, erasers, 
 and the like. The upper right-hand drawer holds the 
 vertical filing system for work in process. Beneath these 
 are storage drawers not ordinarily used for any filing 
 purposes whatever. 
 
 Now for a minute study the vertical filing drawer 
 always remembering that the papers filed in a desk 
 or in cabinets subsidiary to a desk, are connected with 
 unfinished business. The moment the transaction is 
 closed these papers go to permanent files. 
 
 This vertical file is arranged on the order of modern 
 letter files. It consists of manila folders between press- 
 board guides, properly fitted with tabs and compressors. 
 It may be indexed on the tabs alphabetically, numer- 
 ically, geographically, chronologically, or in any way 
 to suit the peculiar needs of the executive. In the ordi- 
 
54 ORGANIZING AN OFFICE 
 
 nary business this file will contain such classifications as 
 "Pending Correspondence/' "Rush Dictation," "Tele- 
 graph Business, " "Telephone Business, " "Unfinished 
 Matters/' "Personal Papers/' and so on. Into these 
 folders go the papers that were chucked into the honey- 
 combs of the old-time desk. 
 
 /CLASSIFICATION of information and the use o 
 V^ the card index and vertical filing system makes 
 the modern desk in itself a complete working machine. 
 
 Now turn to the card-index drawer again. A card- 
 index is merely a record of information, so arranged that 
 any given fact may be obtained in the shortest possible 
 time. Every business has its own class of facts. These 
 may pertain to customers' names, prospects, goods in, 
 stock or ordered, salesmen's routes, estimates, credits 
 a hundred subjects that are bobbing up continually. As 
 many sets of cards may be used as desired. In some 
 desks half the drawers are used for card-index systems. 
 
 This information may be complete on the cards, or 
 the latter may simply show a reference to a file outside 
 the desk. Now appears the value of the subsidiary desk 
 file, which,, although separate from the desk, is a vital 
 part of it. The desk and the file together play the role 
 of vanished pigeon-holes., but they do it infinitely better 
 and on a vastly broader scope. 
 
 In these two appliances the desk and the file that 
 stands within reach we have the machine that is really 
 the heart of the business or department. The executive 
 is the engineer who runs that machine, assisted by his 
 clerks. Even when the desk itself is made the chief file 
 for pending matters, the routine detail of keeping the 
 should be handled by a capable clerk. 
 
 In a typical machine of this sort, the desk of the man- 
 
DESK WORK 55 
 
 ager of a manufacturing house, the bottom drawers of 
 the cabinet are devoted to catalogs, drawings and sim- 
 ilar large and bulky papers. The other drawers contaiik 
 salesmen's reports, follow-up systems, comparative sta- 
 tistics, advertising figures, buying records, current in- 
 voices, stock records and special information of this sort. 
 
 If the alphabetical system of indexing is followed, no 
 separate index is required. But many executives prefer 
 the numerical method; then the desk itself will contain 
 the card-index system, where reference can be made to 
 it instantly. 
 
 For example, the executive wishes to refer to his ad- 
 vertising statistics under the sub-title of some magazine. 
 He turns to his desk cards and finds the one bearing the 
 name of the periodical, in its alphabetical position on the 
 tray. This gives the number of the folder in the cabi- 
 net. Cross-indexing of this sort may be carried out 
 indefinitely. 
 
 Often the index-card itself can be used to present 
 brief summaries or tabulations, or concise statements of 
 facts, so that the mere reference to the card will suffice,, 
 without opening the cabinet. 
 
 The benefits from systematized desk procedure are 
 seen even in the most ordinary transactions. Suppose 
 that a customer calls up on the 'phone and asks for a 
 verbal summary of an estimate on a prospective job. It 
 may be that the customer has mislaid the written esti- 
 mate or it has passed into the hands of some employee 
 who has locked it up in his desk and gone out for an 
 hour or two. Many concerns thus called on for a verbal 
 condensation of an estimate would not be able to give it 
 without considerable delay. But the executive with 
 modern desk methods, still holding the wire open, turns 
 to his card-index and then to his desk-file, gets the car- 
 
56 ORGANIZING AN OFFICE 
 
 bon of the estimate blank and gives the information on 
 the spot. 
 
 Every executive has an endless chain of demands upon 
 him for specific information. The president calls on 
 the general manager over the 'phone for the costs on 
 some piece of work; the treasurer asks for the returns 
 from some advertisement; the superintendent is in a 
 hurry for a schedule of ingredients; customers are ask- 
 ing continually for this or that. Such demands con- 
 sume a large percentage of the desk time of the executive 
 unless the desk itself is made a tool for supplying the 
 answers quickly. 
 
 It does not make much difference what position the 
 executive holds; his desk procedure, if inefficient, may 
 keep him working far into the night. If efficient, he 
 will get his work out at closing time. 
 
 Even the banker has reformed his desk operations 
 during recent years. No longer does he keep his credit 
 information tucked away in unclassified pigeon-holes and 
 drawers. His desk is merely the center of a highly 
 specialized finding system. The professional man is fast 
 falling into line and is discarding the desk as a mere 
 piece of furniture and is turning it into a machine. The 
 physician, for instance, looks in his card-index in or upon 
 his desk and locates his case histories and special articles 
 to be consulted in magazines. The real estate and insur- 
 ance agent even the small store manager has learned 
 to put detail out of mind and to keep it at his fingers ' 
 ends in this way. 
 
 The flexibility of the supplemental desk file makes it 
 the ideal plan for many classes of executives. The file 
 may be of any dimensions. It may have any one of a 
 hundred drawer and compartment arrangements and in- 
 dexing systems. If the business is small, a little box 
 
DESK WORK 57 
 
 containing a hundred cards may be found sufficient. 
 Arranged in alphabetical form, they may show lis+s of 
 customers, records of stock or sales, follow-ups, namea 
 of employees or of prospects. In the same box, or sepa- 
 rately if desired, may be kept a card-tickler system, 
 with the guides arranged by the day, week or month. 
 All the cards in the "Monday" classification, for in- 
 stance, indicate the matters to be taken up on that day. 
 
 PREPARATION for the most efficient kind of work 
 has very largely resulted in replacing the old-fash- 
 ioned roll-top with the low-roll or flat-top desk. 
 
 In selecting a type of desk, a large number of execu- 
 tives now prefer the flat-top standing clear of the floor 
 in sanitary fashion. There is a certain caste about the 
 "low-roll" to be sure, but the flat-top desk offers no 
 temptation whatever for cluttered pigeon-holes. Here 
 is absolute simplicity. The filing facilities in the draw- 
 ers or the subsidiary desk cabinet makes this simplicity 
 possible. 
 
 One executive in a big house keeps nothing on his 
 desk or inside it except his inkstand, pen, and such docu- 
 ments as are under his consideration at the moment. He 
 takes pride in pointing to the lonesome-looking top, and 
 showing his friends the empty drawers. His secretary, 
 at another desk, has the card-index system and is within 
 instant reach of the desk cabinet file. A year ago this 
 executive's desk was literally buried by papers of every 
 description. He was a slave to the detail of his desk 
 which at that time was an old-fashioned high-roll. In 
 the reformation he went from one extreme to the other. 
 The secretary keeps an hourly tickler of important busi- 
 ness, and sees that the executive is kept informed. 
 
 .The general layout of an executive's desk is arranged, 
 
58 ORGANIZING AN OFFICE 
 
 in the modern office, along the lines described here. A 
 definite equipment is assigned to each desk pens, pen- 
 cils, pins, clips, rubber bands, forms. Twice a week a 
 boy replenishes the receptacles at a specified hour. He 
 hecks the items from a list that is furnished him ; noth- 
 ing is allowed to go on or in the desk that is not desig- 
 nated in the layout. 
 
 The metal telephone bracket has been found a time- 
 saver by numerous executives who had been annoyed 
 and delayed by the loose cord that habitually became 
 entangled in the papers on the desk. The telegraph call, 
 the desk clock, the little bracket for holding the list of 
 appointments, the roll-paper bracket attached to the 
 'phone for memoranda, the quick-drying ink pad for 
 rubber stamps, the use of different paper clips for dif- 
 ferent purposes these and similar appliances are avail- 
 able to the executive and contribute materially to the 
 speeding up of his desk work in much the same way as 
 the appliances on factory machinery enable the mechanic 
 to produce better work in less time. The desk of the 
 modern business man is no longer a piece of furniture 
 at which to sit; it is an instrument by means of which 
 he is enabled to increase his day's work. 
 
 CYSTEM means to a business what good tools mean to 
 ^ a craftsman. A merchant can do good work no more 
 than a craftsman does good work unless he has the mechanical 
 means. And the mechanical means of the business man is 
 system. 
 
 Phillip A. Conne 
 
 Secretary and Treasurer, Saks & Company 
 
PART II-LAYING OUT AN 
 ACCOUNTING SYSTEM 
 
 Invention in Methods 
 
 A NDREW Carnegie said: "Take away all our 
 * factories, our trade, our avenues of transpor- 
 tation, our money, but leave me our organization 
 and in four years I shall have re-established 
 myself." 
 
 The processes of modern business are like the 
 functions of a complicated machine, and the ex- 
 ecutive must organize every part of his establish- 
 ment as carefully as an inventor. Organization 
 means running the machine with all its parts in 
 harmony. 
 
 The management of a large corporation is 
 organized thought, exactly as a machine is the 
 organized thought of an inventor. 
 
 The executive must be a specialist along the 
 lines which make for efficiency in administration. 
 He must have that God-given quality, capacity 
 for invention in organization. There is just as 
 real invention in the field of organization and 
 administration as in the field of mechanics. 
 Efficient organization is an asset which counts for 
 commercial and industrial success more now 
 than before. 
 
JAMES B. LOGAN 
 
 Chairman of the Board of Directors, United States Envelope 
 Company 
 
VI 
 
 MAKING THE ACCOUNTING 
 ROOM CONVENIENT 
 
 By Wesley A. Stanger 
 Formerly Sales Manager, Royal Typewriter Company, Chicago Branch 
 
 WHERE a business is small the accounting work 
 may not be sufficient. to require a separate room. 
 In a small store the entire work may be done by part- 
 time work at a single desk. The larger store will re- 
 quire three or four bookkeepers, while the largest city 
 department stores frequently have an entire floor sec- 
 tion devoted solely to the accounting department. In 
 every case, however, there are certain principles in the 
 location and arrangement of the accounting room which 
 make for convenience, economy and practical value. 
 
 In the first place, the accounting room should be sepa- 
 rate from the rest of the office, so as to prevent intru- 
 sion from the outside that will interfere with the work 
 of the accountants and clerks. This further secures pri- 
 vacy in connection with certain records that should be 
 confidential and known only to one or two men in con- 
 trol within the department itself. 
 
 In the second place, the room should be accessible for 
 customers and executives. The cashier's window must 
 be near the entrance of the office in order to give out- 
 siders easy access to it, while the department as a whole 
 should be placed conveniently for the executives directly 
 interested, and also for the credit, collections and other 
 sections closely connected with the accounting work. 
 
62 ACCOUNTING PRINCIPLES 
 
 In a factory, raw material enters at the receiving door 
 and progresses in logical order from department to de- 
 partment until it comes out as finished product. The 
 same principle applies with equal weight in the office. 
 The loss of time incurred in taking papers from one end 
 of a large room to another and then bringing them back 
 to the starting point is an important thing to be consid- 
 ered. But even more important is the possibility that 
 papers will be lost in the transfer. 
 
 Another simple but significant thing to remember is 
 that all accounting work should be centralized for the 
 same time, space and labor saving reason which compels 
 the grouping together of all correlated work; it facili- 
 tates intercourse between employees; no time is lost in 
 going from one record to another ; and continuous prog- 
 ress results. Further, centralization tends to eliminate 
 unoccupied space an important feature in the arrange- 
 ment of every office. 
 i 
 j 
 
 PRINCIPLES of arrangement applied to the account- 
 ing room secure privacy or accessibility, centraliza- 
 tion of work or continuity of operations as desired. 
 
 The application of these four principles, of course, 
 must be in accordance with factors that vary in different 
 offices the size and shape of your main office, the vol- 
 ume and kind of business, and the relative importance 
 of your various records. One company, for example, 
 needs much space for the records of the cost department, 
 while another business takes up a large amount of room 
 with the detailed record of thousands of customers' ac- 
 counts. While, therefore, arbitrary plans can not be 
 given, the four fundamental principles may be followed 
 to good effect. 
 
 Figure VI shows an accounting office of medium size 
 
OFFICE ARRANGEMENT 
 
 63 
 
 which embodies these four fundamental principles very 
 well. As the visitor enters from the street, he finds the 
 cashier's cage directly on his right. Through the win- 
 dow of the cage the cashier receives all mail and remit- 
 tances brought by individuals in person. Mail is opened 
 in the cashier's office, whence cash orders pass for entry 
 to the bookkeepers in the rear, while the cash itself is 
 deposited in the safe. Other orders pass to the order 
 department, which is opposite the bookkeepers and to 
 the left of the main entrance. Just back of the book- 
 keeping department is the auditor, who also acts as the 
 credit man. 
 
 FIGURE VI: Convenience is the keynote in this accounting room. The 
 
 bookkeepers are removed from both the general offices and the public, and 
 
 are thus free from interruption 
 
 Though quite compact, this arrangement is ideal for 
 the accounting office where work is not complex. In this 
 instance, the president's office adjoins the office of the 
 auditor. In larger establishments it is not necessary 
 for the offices of the executives to be close to the account- 
 ing department. 
 
64 
 
 ACCOUNTING PRINCIPLES 
 
 In one office of pretentious proportions the president 
 is at the extreme end of the office from the accounting 
 room (Figure VII). All executive offices are arranged 
 on a hall that leads to the general office, and the presi- 
 dent's office is at the far corner. Between his office and 
 
 FIGURE VII: Privacy for accounting work is effectively secured in this 
 
 office. Entering from the main hall, the visitor sees the busy accounting 
 
 room, but does not come into direct contact with it 
 
 that of the secretary is that of the private secretary, who 
 serves both officials. Next to the secretary comes the 
 treasurer, and then the auditor, who is nearest the en- 
 trance to the main office. 
 
 When a visitor enters the long hall the first door he 
 reaches is that leading into the general office. The cash- 
 ier occupies the cage at his immediate right. Her win- 
 dow is placed near the door for the convenience of col- 
 lectors, express drivers and others. Doors are so ar- 
 ranged that she can walk from her cage into the execu- 
 tives' rooms without going into the general office or out 
 into the hall. The assistant auditor's desk occupies the 
 space next beyond the cashier, where he has immediate 
 
OFFICE ARRANGEMENT 
 
 65 
 
 access to both the cashier and the auditor, and can over- 
 look the entire office force. On his right are the cost and 
 filing departments. In front of him are double rows of 
 desks for clerks and general bookkeepers. All of these 
 desks face the main entrance. Visitors entering the office 
 see the busy accounting department but no more. 
 
 FIGURE VIII: In this accounting room, the bookkeepers are surrounded 
 
 by offices and thoroughly cut off from outside intrus'on, although free access 
 
 is had to them from each of the private offices 
 
 fn this big office orders pass continuously in one direc- 
 tion from the mail-opening department to all depart- 
 ments interested. The traffic, purchasing and sales de- 
 
66 ACCOUNTING PRINCIPLES 
 
 partments are conveniently near together, and in the 
 farthest corner is the filing department, to which, in the 
 usual course of handling, papers naturally find their 
 way. 
 
 Another office (Figure VIII), rectangular in shape, 
 has all private offices along the sides and at one end, 
 each with a door leading into a central accounting de- 
 partment. The auditor is in the very center of this 
 room, on a platform raised six inches above the floor. 
 On the right is seated the chief clerk, on the left the 
 cost clerk. The other desks are arranged in rows on 
 either side of the auditor. This is ideal centralization ; 
 
 D n 
 
 DESKS 
 
 D D D D" u 
 
 FIGURE IX: Accessibility rules in the arrangement of this office. 
 
 Coming in from the street, the caller immediately faces the busy accounting 
 
 force, tuith the auditor in front of them and near the entrance 
 
 it facilitates progressive work, but it gives freedom from 
 intrusion in only a moderate degree. 
 
 A visitor coming into the office illustrated in Figure 
 IX finds the sales department on his right, and the pres- 
 ident's office on his left. An aisle extends to the far end 
 
OFFICE ARRANGEMENT 
 
 67 
 
 of the room, from which doors on the right lead into the 
 private offices of the general manager and the super- 
 intendent. Another aisle, just beyond the president's 
 office, has doors on the left leading into the offices of the 
 
 CASHIER 
 
 ACCOUNTING ROOM 
 
 GENERAL OFFICE 
 
 FIGURE X: The manager is the central figure of this arrangement. 
 
 From his office he can step either into the accounting room or the general 
 
 office, and thus the work focuses toward his desk 
 
 treasurer and the cashier. The rest of the oblong room 
 is taken up with the accounting department. 
 
 Within this department sections are arranged with a 
 particular view to accessibility. Immediately in front 
 of the manager's door is located the desk of the auditor, 
 and the clerks in the auditing department face him like 
 pupils in a school room. In front of the auditor and to 
 the left is the freight accounting department, and to the 
 right the purchasing. Behind the purchase books are 
 the general ledgers, and back of them the cost system. 
 Immediately behind the freight department is the sales 
 department, and back of that the "material" depart- 
 ment. This office as a whole forms a corner of the fac- 
 
ACCOUNTING PRINCIPLES 
 
 tory building. There are private entrances into the fac- 
 tory from both the superintendent 's office and the ' ' mate- 
 rial" section. 
 
 T^XAMPLES of layout which illustrate the best prin- 
 JL-J ciples of arrangement in the accounting room, anp 
 secure the highest degree of efficiency in work. 
 
 The accounting department is within sight of every- 
 body, and each man is placed nearest the section that he 
 most frequently comes in contact with, irrespective of 
 the progress of work within the accounting department 
 as a whole. This is an exceptionally good example of 
 accessibility from without, but the arrangement of the 
 department itself does not favor continuous progress in 
 
 1 
 
 
 7 
 
 OFFICES 
 
 
 
 CASHIER 
 
 fc^-^^'^^'^H 
 
 \A 
 
 PARTITION 
 
 L^ 
 
 UU| 
 
 *'\ ^ RAILING j-'****' S ^~H 
 
 HJLUD^DD^D 
 
 s; 
 
 FILING ACCOUNTING DEPARTMENT 
 
 
 min n DDDDD 
 
 ROOM 
 
 FIGURE XI: This layout is planned for continuity of work in the 
 accounting department. From the cashier's office all documents take a 
 zig-zag course to the rear of the office where the filing department is located 
 
 one general direction. Mail is opened in the rear and 
 orders are taken to the front for entry on the books. 
 They are then returned to the order department on the 
 other side of the room. 
 
OFFICE ARRANGEMENT 69 
 
 It is not unusual to find the accounting room focusing 
 round one man. Such a department in one office (Fig- 
 ure X) faces the manager in the farthest corner. Two 
 doors lead from his private room, one directly into the 
 accounting department, and the other into the general 
 office. 
 
 The cashier is located at the entrance, and the man- 
 ager can step from one door into the accounting depart- 
 ment and from there into the cashier s cage. From his 
 other door he can step into the general office. Every part 
 of this general office leads either into the chief's private 
 room or into the accounting department. The files and 
 stenographers are in a separate space. 
 
 Probably one of the simplest illustrations of a pro- 
 gressive plan of arrangement is an office which is di- 
 vided by a long aisle (Figure XI). The cashier occu- 
 pies the first space on the right of the entrance, and 
 opposite is the reception room. Back of the cashier come 
 various private offices, and on the other side of the pas- 
 sageway is the accounting department. All papers lead 
 from the executive interested to the department head 
 interested and from him directly to the accounting de- 
 partment. 
 
 T^LOOR space is one of the most important items of non- 
 * productive cost in any business, and it is therefore of 
 vital importance to prevent its waste. 
 
 A. T. Morton 
 
VII 
 
 THE BOOKS AND THEIR 
 ACCOUNTS 
 
 By Neil M. Clark 
 
 WHY do you keep books? 
 A printing office proprietor faced this question 
 when his bookkeeper quit without notice, leaving the 
 accounts in a tangle. Straight thinking had won for 
 the printer in his business. He now determined to think 
 out accounting to the point where he could check up the 
 work in that department as expertly as he could in the 
 press room and bindery. He glanced into the largest of 
 his three mysterious books. Here a page assembled his 
 dealings with a paper house ; farther on with a customer ; 
 again with the type foundry. Evidently, the bookkeeper 
 had sorted dollars and cents upon these pages, just as 
 compositors distributed "a's" into one compartment in 
 the type case and "r's" into the .adjacent one. There 
 were " boxes" that is, pages for every important 
 group of receipts or disbursements. This book was his 
 ledger. 
 
 The other two books did not sort amounts, but merely 
 lined them up, one after another, as the transactions 
 crowded in during the v day, too fast to be sorted. ^One 
 book recorded transactions involving cash, the other de- 
 scribed all the remaining miscellaneous items. An index 
 column on each ledger page referred to the v pages of 
 these books on which the same transactions appeared; 
 
_ BOOKS AND ACCOUNTS _ 71 
 
 and it was evident that these books carried the original 
 entries, being feeders for the pages of the ledger. These 
 volumes were his ca^hbooj^find journal.^ 
 
 Puzzling out fEesesimple facts, it seemed to the 
 printer that his two books were merely records of the 
 day's business; and that the third book the ledger 
 fl1ft.nfj fl, wfl y small details --and 
 
 brought the business to a sharp focus which showed his 
 
 The customer or the court might at any time inquire 
 into his business transactions and ask : When ? How ? 
 Why? With whom? How much? His cash book and 
 journal, the printer saw, would give answer. They 
 would supply detailed evidence of his dealings, witness 
 his claims and warn him of bills falling due. First, 
 however, he would find it convenient to consult the 
 proper ledger page as an index to all these day by day 
 items. 
 
 RECORDING transactions in the day's business and 
 focusing them periodically into balances which show 
 net results is the service rendered by books. 
 
 This book where balances were struck, moreover, could 
 answer the broad questions of his business; the cus- 
 tomer's, "How does our account stand?" the banker's, 
 ' * How have your expenses run for the last three years ? ' ' 
 and the press credit man's, "Is my 0. K. on your three 
 thousand dollar order warranted by your monthly busi- 
 ness average?" These answers would have meant mak- 
 ing up a special statement based upon a search through 
 many record pages, had not his ledger pages freed every 
 transaction of detail and focused all into such needed 
 totals. 
 
 The printer saw that it would be of advantage to have 
 
"72 ACCOUNTING PRINCIPLES 
 
 his accounts so divided that he could see his sales, his 
 purchases, his business with the bank, his costs, his ex- 
 penses and his profits separately. He saw that his book- 
 keeping plan might be better adapted to these ends and, 
 calling in an accountant, he worked over a standard 
 printshop system of accounting to suit his particular de- 
 sires. He now uses vouchers and a duplicate check sys- 
 tem, a cash book, a sales journal, several small ledgers 
 for special accounts and a final general ledger. 
 
 * ' These half dozen volumes are no mystery to me, ' ' he 
 declares. "One group of them is my catch all, where I 
 bring together all the buying and selling transactions of 
 the day. The other pile my ledgers are type cases, 
 where into one box I toss my printing account with the 
 real estate man, into another my bills from the paper 
 house around the corner. On opposite halves of the 
 page I record what value in cash, in bills or in goods 
 is put in and what is taken out. At the end of the month 
 I add and balance, getting my totals and finally ridding 
 myself of all details, except when I want to turn back 
 to the first pile of books for some special item. - 
 
 "I know now that any system of bookkeeping merely 
 records and balances. By finding the reasons back of 
 his books and fitting them to his business, any one can 
 take advantage of new accounting ways. Your nail 
 boxes, your cracker boxes, drug containers, jewel or 
 candy trays, are as apt comparisons as my type cases; 
 and the right bookkeeping system is just that simple and 
 sensible. The only ^ rule I have pasted up, besides my 
 type case comparison, is "credit on the right side what 
 goes out, debit at the left what comes in." 
 
 Accounting is simply a method which hard headed 
 business men have worked out for recording and balanc- 
 ing what comes in and what goes out in the transaction 
 
BOOKS AND ACCOUNTS 
 
 73 
 
 of their business. When our business ancestors found 
 themselves thumbing through their trade diaries dozens 
 of times a day in search of various dealings, they de- 
 
 
 INVOICE REGISTER 
 
 
 DATE 
 
 REC'D 
 
 ^ 
 
 
 NAME 
 
 F 
 AM 
 
 DLL 
 OUNT 
 
 DATE 
 DUE 
 
 rCRMB 
 
 DATE 
 PAID 
 
 DISCOUNT 
 
 NET 
 AMOUNT , 
 
 
 
 
 
 
 
 
 
 , 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 . 
 
 
 
 
 
 
 
 
 
 
 
 f^ fc> l/^"' RECEIPTS BOOK 
 
 
 
 
 
 / 
 
 
 
 
 ^ 
 
 .TCMS II SUNDRIES II SCCT* II 
 
 
 
 - 
 
 
 1 I 
 
 
 
 
 
 
 
 
 
 
 > 
 
 ^_ 
 
 
 
 **Ai 
 
 
 
 
 
 
 
 
 
 \ 
 
 
 
 
 
 
 
 
 
 
 - 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ACCOUNTS RECEIVABLE 
 
 
 
 DATE 
 
 DEBIT 
 
 ^ 
 
 AMT. 
 
 DATE 
 
 CREDIT S 
 
 AMT. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^^ 
 
 
 i-* * 
 
 ^^ 
 
 
 ** 
 
 \^~ ^*+Jl 
 
 
 ~^ 
 
 **~***^~S~**~' 
 
 **~-'^^X>* 
 
 FORM I (next bottom): TAw M the simplest form of journal. FORM II 
 
 (next top}: Receipts side of the cash book. FORM III (bottom): A 
 
 simple ledger sheet. FORM IV (top): The invoice register 
 
 
 veloped a further bookkeeping process to do away with 
 this inconvenience. This plan was to sort items into a 
 
74 _ ACCOUNTING PRINCIPLES _ 
 
 final book which gave balances, noting in another volume 
 that they were classifying each purchase or sale under 
 such and such headings. 
 
 A separate book was then found convenient for first 
 noting of cash items only. These are the three ele- 
 mentary books of account: the journal, which records 
 (Form I) ; the cash book, carrying TEe original entries 
 of transactions involving cash (Form II) ; and the 
 ledger, in which accounts are sorted and balanced (Form 
 
 Soon the journal was improved by putting all like 
 items in a column by themselves so that you could run 
 your finger down the page and at one time transfer 
 everything which belonged on one ledger page. One of 
 these columns now and then filled so quickly that it 
 seemed more convenient to give a separate book to such 
 items. If transactions of one kind were happening 
 simultaneously at a dozen counters, special blanks were 
 designed to record them, so that the records could be as- 
 sembled, sorted and more conveniently posted to the 
 ledger. 
 
 It also became more convenient to split the "balance" 
 volume into several books, which today are called "spe- 
 cial ledgers" accounts receivable, sales, expenses and 
 the like. 
 
 A CCOUNTING takes into consi^^^jnn fTiTTT/ 
 
 *. ble and intangible feature of the business methods 
 of determining what accounts to debit ana credit. 
 
 Accounts arrange payments and receipts so that you 
 may have a record and avoid overlooking what is due to 
 you or from you. The cash payment and the shipment 
 you make are both credited, the one to cash and the other 
 to merchandise accounts. They are also both debited, the 
 
BOOKS AND ACCOUNTS 
 
 75 
 
 money against the debt satisfied and the goods against 
 the person who is to pay you. The debit for the mer- 
 chandise will then warn you from time to time that its 
 money value is owing to you. Its warning will not 
 cease until you receive the money for the goods and by a 
 credit turn it into a mere record. 
 
 All accounts are either warning you of money due 
 and owing or keeping a valuable record of your dealings. 
 
 WHERE 
 TO 
 ENTER 
 
 A CREDIT 
 PURCHASE 
 
 OUTGOING CASH 
 
 ACREDIT 
 SALE 
 
 INCOMING CASH 
 
 REMITTANCE 
 CN ACCOUNT 
 
 CASH 
 PURCHASE 
 
 PAYMENT 
 ON ACCOUNT 
 
 CASH 
 SALE 
 
 
 
 
 
 <A> 
 BILLOR 
 REGISTER 
 
 OF SALE 
 
 
 IA> 
 BILLOR 
 REGISTER 
 OF SALE 
 
 JOURNAL 
 OR 
 RECORD 
 
 
 (A) 
 CASH BOOK 
 
 W 
 
 CASH BOOK 
 
 
 (A) 
 CASH BOOK 
 
 <B> 
 CASH BOOK 
 
 GROUP 
 OF 
 BOOKS 
 
 IA> 
 INVOICE 
 REGISTER 
 
 
 
 
 
 
 IB) 
 JOURNAL 
 
 JOURNAL 
 
 (B) 
 JOURNAL 
 
 <> 
 JOURNAL 
 
 JOURNAL 
 
 <O 
 JOURNAL 
 
 LEDGER 
 OR 
 BALANCE 
 GROUP 
 OF 
 
 5 
 
 INDIVIDUAL 
 LEDGER 
 
 ACCOUNT 
 
 <C> 
 INDIVIDUAL 
 LEDGER 
 ACCOUNT 
 
 
 1C) 
 CUSTOMERS' 
 LEDGER 
 
 <C> 
 CUSTOMERS' 
 LEDGER 
 
 
 
 
 
 ID> 
 ACCOUNTS 
 RECEIVABLE 
 
 IOI"' 
 ACCOUNTS 
 
 RECEIVABLE 
 
 
 ID) 
 ACCOUNTS 
 PAYABLE 
 
 ID) 
 ACCOUNTS. 
 PAYABLE 
 
 
 
 
 
 BOOKS 
 
 
 IE> 
 LEDGER 
 OASN 
 ACCOUNT 
 
 1C) 
 LEDGER 
 CASH 
 ACCOUNT 
 
 
 5 
 
 LEDGER 
 ACCOUNT 
 
 9 
 
 LEDGER 
 CASH 
 ACCOUNT 
 
 
 
 MERCHANDISE 
 
 
 <D> 
 MERCHANDISE 
 
 
 MERCHANDISE 
 
 
 (E) 
 MERCHANDISE 
 
 FIGURE XII: The books or specific accounts in which to enter every 
 day transactions are here shown. In receiving and paying out money, 
 whether the transaction is for cash or credit, your first entry is at "A," 
 under the proper heading at the top of the chart, then at "B," etc. When 
 distributing entries are made on other books, the journal is not used. Serv- 
 ice and wages have special accounts, handled like merchandise, which they 
 replace if you sell only service 
 
 To do this, they must handle not only tangible money, 
 but also merchandise, services, real estate, shares and 
 other things that stand for money. When accounts deal 
 with representations of cash, they assign to them a money 
 value, and debit or credit these values exactly as if they 
 
76 ACCOUNTING PRINCIPLES 
 
 were currency. You debit a cash payment on account to 
 cash and credit it to whoever paid you; you debit the 
 value of goods received on account to merchandise and 
 credit it to whoever you must pay for it. Although the 
 two debits represent entirely different things paper 
 currency and cloth goods they are entered on the books 
 according to a single standard, their value in money. 
 The master book or controlling volume the "general 
 ledger" takes these balances and boils them down into 
 the concise totals which the manager of the business can 
 use at once in his production and sales planning. 
 
 All of these books and transactions, therefore, are 
 merely steps in this- recording and balancing process. 
 Under these two groups, books of record and books of 
 balance, everything in accounting naturally falls. 
 
 Any transaction of the four classes (Figure XII.) 
 which make up accounting, (1) cash purchases, (2) 
 credit purchases, (3) cash sales, (4) credit sales, must 
 have an original record and must finally filter in essence 
 into the general ledger. You may note an intricate 
 transaction in several intermediary books, but these go- 
 betweens are merely screens through which items pass for 
 finer sorting. 
 
 The ledger "account" is merely an arrangement of 
 two sets of like figures items which come in and like 
 items which go out so that, knowing what you had at 
 the beginning, you can by simple calculation, see just 
 what transfers have been made, what is due or owed, and 
 what is now on hand. The printer's plan of deciding 
 what belongs in the left hand or debit column, what in 
 the right or credit column, was "debit what comes in, 
 credit what goes out." This means that the left-hand 
 column must show exactly what part of your business 
 has been assigned to that heading and the right-hand 
 
BOOKS AND ACCOUNTS 77 
 
 column what definite value that heading is giving up or 
 is no longer responsible for. 
 
 One ledger page may be headed "cash," another "mer- 
 chandise," and a third, "accounts receivable." When 
 you sell a bill of goods on credit, you credit merchandise, 
 which surrenders that amount of stock, and debit ac- 
 counts receivable, which becomes responsible. When 
 the buyer pays you, you debit cash, which becomes re- 
 sponsible, and by a credit free accounts receivable from 
 its responsibility. By recalling the printer's plan of 
 debiting the type box when he puts anything in and 
 crediting it when he takes anything out, you can at once 
 charge and credit correctly. 
 
 TT^OCUSING transactions into balances is the function 
 JP of the various ledgers a group into which all bookt 
 except those of purely original entry fall. 
 
 When you fill out a voucher with a cash payment, or 
 write a check and fill in the stub, or enter a sale on its 
 proper slip or ring up the cash register, you are making 
 an original entry, such as business men generations ago 
 made in their diaries. At night you assemble, sort and 
 foot sales slips, add cash vouchers, read the register, car- 
 rying your totals to the various ledger columns. Miscel- 
 laneous items which do not make up the bulk of the 
 day's business, such as rent and taxe^, will go into dif- 
 ferent columns of the journal. Where there is an im- 
 portant class of such items, as invoices for goods bought 
 by you, you may design a special record book for it, 
 which will in fact be the debit and credit columns 
 formerly appearing in the general journal under that 
 heading. 
 
 These totals which you secure from the sales slips, 
 the cash vouchers and the automatic register after clos- 
 
78 ACCOUNTING PRINCIPLES 
 
 ing time are sorted out and focused into larger totals 
 Under the proper headings on the various ledger pages. 
 The gist of every transaction passes on to bigger head- 
 ings, such as expense, cash, merchandise, discount and 
 interest ; and finally to the last focus or. the grand total 
 the balance sheet. From the sales slip record, "Two 
 sacks of Sunset Flour, $1.50," the grocer carries the 
 amount, $1.50, as a part of the day's total to the credit 
 side of the merchandise ledger and the debit side of the 
 cash account. "When the monthly balance is taken, this 
 item is entirely without individuality in the general 
 entry "Total Sales, $4,120.12." 
 
 |Where a purchase or sale is made on credit, you may 
 need something more definite than a sales slip record, by 
 which to follow up the collection or payment of the bill, 
 the taking of a discount or the payment of interest. This 
 is easily done by giving each creditor or credit customer 
 a ledger page so that you may at all times know sepa- 
 rately his exact responsibility to you and yours to him. 
 From your original entry, the bill of sale or purchase in- 
 voice, you will, therefore, post each credit sale or pur- 
 chase to its proper page in your customers ' ledger or 
 purchase ledger (Form IV). You can then focus the 
 total purchases or sales under the proper headings with- 
 out the identifying names. When a customer has his 
 $1.50 purchase of flour charged, you note his responsi- 
 bility, $1.50, on his page in the customers' ledger, enter 
 that amount as a part of the total shown to be due on 
 the "accounts receivable" page, and on the proper "mer- 
 chandise" page, see that a $1.50 credit is entered, show- 
 ing that amount of stock surrendered (Figure XIII). 
 
 Some businesses use a filing card for each individual 
 credit sales account and others a series of loose leaf 
 ledger pages. The routine is the same posting of the 
 
BOOKS AND ACCOUNTS 
 
 79 
 
 
 * . 
 
80 ACCOUNTING PRINCIPLES 
 
 sale from the bill or sales slip, the debit to the cus- 
 tomer on his individual card and the credit to liim when 
 he pays; with the proper entries to merchandise, ac- 
 counts receivable and cash. The card or loose leaf sys- 
 tem is easily expanded or changed to suit your individual 
 needs, and is especially adaptable to small or irregular 
 accounts and to the business where many bookkeepers are 
 required on the accounts at one time. 
 
 It is a common practice to handle the accounting of 
 a business without other books than this ledger of charge 
 accounts, the purchase ledger, the cash book, sales slips 
 and invoices. Profits, expenses, the balance sheet and the 
 present worth of the company are not given by these ac- 
 counts. Such a system is not complete ; a general ledger 
 is necessary to round out your business information. 
 This final ledger focuses upon one page your total mer- 
 chandise received and sold; on another, your accounts 
 payable; on a third, your accounts receivable, and on 
 other pages your cash totals, your various groups of ex- 
 penses and whatever other items are desired; it gives a 
 close check on your physical inventory and keeps you ap- 
 prised of your expenses, profits and standing. The 
 principle is simple debit against credit with the record 
 of all business transactions and a balance struck under 
 the headings that are important to you. 
 
 The general ledger focuses the financial secrets of the 
 business. It is an epitome of the whole business and like 
 the store-keeper's purchase ledger belongs only in the 
 hands of the proprietor or a responsibile head book- 
 keeper, while the other accountants can give their full 
 attention to the one or two volumes in their charge. 
 
 In almost any business one or more special books can 
 be devised for the sake of convenience in separating or 
 following certain classes of transactions. The manufac- 
 
__ BOOKS AND ACCOUNTS _ 81 
 
 turer or dealer who makes many purchases will use an in- 
 voice register (Form IV) where he keeps track of bills 
 for purchases until they are checked with the goods and 
 paid. Should the original bill be lost, the register tells 
 the accountant when to forward a check in order to take 
 the discount. Where bills are few and easily borne in 
 mind, however, they are first checked against the new 
 stock, then entered in a ledger and finally placed in a 
 tickler file under the discount date. 
 
 If cash transactions are numerous you may avoid the 
 transfer of details by keeping a daily cash sheet or a 
 system of petty cash vouchers from which totals only are 
 posted to the regular cash book. Other memoranda, in 
 book form, are often kept about notes payable and notes 
 receivable. The register where checks are listed as is- 
 sued, is now usually replaced by a plan of making car- 
 bon copies of all checks and posting to the ledger cash 
 and other accounts from these slips. 
 
 r 
 
 "TROUBLE entry fully performs the recording and the 
 JL/ balancing functions single entry books cannot be 
 balanced, and possess no quick test for accuracy. 
 
 Such impersonal accounts as merchandise, expense, 
 profit and loss, occur only in what is termed double 
 entry bookkeeping. A store-keeper found a five dollar 
 bill by his counter and was puzzled over the necessary 
 bookkeeping entries; it was evident that cash should be 
 debited but without other entries that would make hia 
 profit for the day seem deceptive would make it ap- 
 pear that his average selling price was more liberal or 
 his expense less than was the fact. Chance,- not sales, 
 deserved to be credited. You hand your monthly rent to 
 the landlord and credit cash, but your books tell only 
 half the story if you neglect to debit the cause your 
 
82 'ACCOUNTING PRINCIPLES 
 
 rent account. Double entry meets this need. 
 
 When you make single entry of a transaction when 
 you keep purely single entry books you do not split up 
 a transaction. You disregard chance, rent, merchandise, 
 accounts payable, and keep only personal accounts 
 what you owe and pay others ; what others owe and pay 
 you. In case of a dispute over your rent for the past 
 year, you might have to pick out the rent payments 
 from among purchases, wages and miscellaneous cash, 
 items. What slight additional work double entry causes, 
 it is likely to save in the end. While on many unusual 
 items double entry would require entries on two ledger 
 pages as against one in single entry, by adding the 
 credit slips, you can handle fifty credit sales by 
 a single entry on each of fifty customer cards, 
 together with only two additional entries one total to 
 accounts receivable and another crediting merchandise. 
 Many more or less incomplete forms of double entry are 
 in use, however, carrying such of the elementary im- 
 personal accounts as are essential. A simple but com- 
 plete double entry system is likely to be more valuable 
 to the man who wishes to progress solidly in his business. 
 
 Cost accounting merely carries further one phase of 
 double entry bookkeeping, that of keeping accounts with 
 things as well as persons. In organizing your cost ac- 
 counting, you merely reserve a ledger page or account 
 for each department or division of the total cost which 
 seems significant. Your scheme of division is elastic and 
 can follow the departments in the store, the individual 
 products of the factory, or costs that go into office 
 operation, farming or contract work. When you know 
 what a line of goods or a class of work is worth, you 
 can prevent a blind cut in price and reassure yourself 
 about the daily tendencies of your business. 
 
BOOKS AND ACCOUNTS 
 
 In a Kansas hardware store, where old-fashioned book- 
 keeping methods were continued because seemingly in- 
 expensive, the proprietors, facing an unfavorable year, 
 
 HOW THE TWO ACCOUNTING 
 METHODS COMPARE 
 
 SINGLE ENTRY 
 
 I. You can get a profit and loss 
 statement from single entry ac- 
 counts by detailed work, but you 
 cannot check your net profit nor 
 show which lines pay best. 
 
 II. By counting or valuing your 
 impersonal items physically, you 
 can get a statement of assets and 
 liabilities. 
 
 III. Single entry furnishes no 
 adequate check upon the accu- 
 racy of your bookkeeping. 
 
 IV. Single entry ledger pages 
 are restricted to personal head- 
 ings. You cannot keep imperson- 
 al or nominal accounts without 
 extra detail and even partial 
 double entry. 
 
 V. The accuracy of postings 
 can be checked only by cumber- 
 some methods. 
 
 VI. Present worth, stock on 
 hand, general expense and factory 
 costs are not available under the 
 single entry bookkeeping system. 
 
 DOUBLE ENTRY 
 
 I. You can get a profit and loss 
 statement from the books, can 
 check it and show the sources of 
 gain or loss. 
 
 II. Double entry focuses natu- 
 rally into a balance sheet with no 
 necessity of an actual count. 
 
 III. The various accounts in 
 double entry work, including bal- 
 ance sheets and profit and loss 
 statements, prove your work. 
 
 IV. Double entry allows per- 
 sonal, real and nominal accounts 
 showing not only the party to the 
 transaction, but the complete ex- 
 change and the division of price 
 into whatever costs, expenses, 
 profits, and markups are desired. 
 
 V. Trial balances regularly 
 prove your postings. 
 
 VI. Double entry will conven- 
 iently furnish the figures which 
 establish loss in case of fire or burg* 
 lary as weii as definite cost and 
 expense totals and statistics. 
 
 gave orders to discontinue one of the departments. An 
 ambitious employee in the unlucky department asked per- 
 mission to have the expenses of that section kept sepa- 
 
84 ACCOUNTING PRINCIPLES 
 
 rately. The result not only showed that his department 
 was a profit-maker, but induced the proprietors to extend 
 the cash book and journal sheets, giving columns for 
 receipts and disbursements by departments throughout 
 the store. The general expenses are apportioned among 
 the different sections and losses as well as profits are 
 thus localized. 
 
 Modern bookkeeping is built around this idea of test- 
 ing the various parts of business so that your shop or 
 store may be expanded in profitable directions, and any 
 sign of sick business can be cured before it spreads to 
 serious dimensions. 
 
 When you install a new set of books or make over 
 your old system, therefore, study your business care- 
 fully and guide yourself not by the forms of bookkeep- 
 ing routine, but by the principles. Aim to secure the 
 least involved system which gives you absolute accuracy, 
 promptness and the figures on which you must build for 
 success. Look beyond the forms and get records that are 
 accurate, balances that clear your vision of details and 
 spotlight the particular totals which prove your success, 
 your mistakes and your standing, with, finally, such sta- 
 tistics as give you a picture of your tendencies. 
 
 HHHE ways of judging your business, past, present and 
 A future, are many and devious. In fact, to judge your 
 business fairly, you must review the past, know the 
 present, and judge the future from what you have done and 
 what you are doing, coupled with a careful survey of the 
 field in which you operate. 
 
 Henry Clews 
 
 Founder. Henry Clews & Company 
 
VIII 
 
 HOW TO HANDLE PURCHASE 
 ACCOUNTS 
 
 By J. M. Cobb 
 
 A STONTSHED to learn that he had not earned his 
 <L\. bonus, although he was positive that he had done a 
 bigger and better business than ever before, the manager 
 of the furniture department in a large city store de- 
 manded a minute examination of the records. This 
 brought to light the fact that the department was 
 charged with dining room furniture of a certain make 
 to the extent of $2,000, which had been paid for, but 
 neither ordered nor received. Further developments 
 showed that a clerk in the accounting department was in 
 collusion with the manufacturer of these goods. 
 
 It had been the custom in the store to pass all in- 
 voices to the receiving clerk and department manager to 
 be checked, before they reached the accounting room. 
 The invoice clerk took advantage of this lax system to 
 help himself and his friend, the furniture manufacturer, 
 to a considerable sum of the company's money. He 
 merely added a figure to both the amount and quantity 
 of the bill, which already bore the 0. K. of the proper 
 departments, and the auditor in due time passed it for 
 payment without hesitation. 
 
 Such a thing could not have happened had a proper 
 method of handling purchase accounts been in use. The 
 store system was thoroughly overhauled and thereafter 
 
86 ACCOUNTING PRINCIPLES 
 
 the trusted mail clerk was instructed to use a safety 
 punch to indicate on every invoice, when it arrived, the 
 full amount of the bill, regardless of whether or not it 
 was correct. 
 
 REGISTRY of each invoice on its receipt prevents its 
 possible loss and the failure to take discounts; 
 the voucher method of making payments on account. 
 
 To avoid the possible loss of invoices and the conse- 
 quent loss of discount, every bill should be sent immedi- 
 ately upon its receipt to the accounting department, 
 where it is given a number and entered with the details 
 necessary for its identification, on the invoice register. 
 The amount, nature and price of the goods, together 
 with the date when payment is due, should be indicated 
 in the columns provided. The invoice or its copies may 
 then be sent to the proper departments to be checked. 
 The register indicates the approach of the date when 
 payment must be made, and a delayed or lost invoice 
 can be traced through the departments which have 
 handled it and recovered in time to save the discount by 
 prompt settlement. 
 
 In any except a small business, a suitably arranged 
 voucher system is probably unequalled for the payment 
 of bills. It serves six distinct purposes : 
 
 In the first place, it is the most satisfactory method 
 for systematizing the course of a bilj from its receipt 
 to its payment, for it compels every bill to go through a 
 certain regular procedure. 
 
 Second, it affords opportunity for approval of every 
 bill by the auditor and the manager or proprietor, thus 
 preventing any payment from being made without your 
 knowledge and sanction. 
 
 Third, and this is its primary function it serves 
 
PURCHASE ACCOUNTS 
 
 87 
 
88 ACCOUNTING PRINCIPLES 
 
 yon as a ledger account with yonr creditor, obviating the 
 necessity of having on the ledger the account of every 
 seller from whom you buy. 
 
 Fourth, it acts as a distribution ledger, every ex- 
 penditure being distributed to its proper charge account. 
 
 Fifth, when returned by the seller, the voucher serves 
 as a receipt. Since the check number may be put on 
 the voucher, the creditor receipts also for the medium 
 through which payment was made. 
 
 Sixth, it binds together all data bearing on your firm's 
 transactions with any house from which it buys. 
 
 Distribution of items to their proper charge accounts 
 may be made on and posted from the voucher itself. One 
 objection to this, however, is the fact that it makes 
 public to a certain extent matters with which your firm 
 only is concerned. 
 
 To remedy this fault, the distribution slip shown in 
 Form I is used. These slips should be put up in pads 
 and may be of just sufficient size to accommodate the 
 names of the accounts to which the voucher is to be 
 charged and the amount chargeable to each. The voucher 
 clerk fills in a slip for each voucher and indicates what 
 the bill is for. 
 
 "Where the number of operating or other accounts to 
 be entered is large or the distribution intricate, it is well 
 for the clerk to have before him a tray of rubber stamps 
 with the names of each of the general accounts and if 
 possible, each of the sub-accounts. With a little prac- 
 tice he can handle these very quickly. The slip is at- 
 tached to the invoice, which is then ready to have the 
 voucher drawn for payment. j 
 
 The voucher can be of simple design, as shown in 
 Form II. The body of the voucher should contain only 
 such a brief synopsis as will identify the account, with- 
 
PURCHASE ACCOUNTS 
 
 89 
 
 out specifying quantities or prices, thus avoiding unde- 
 sirable publicity. If a single invoice is vouchered it is 
 necessary to state only the date and amount and the in- 
 voice number. If more than one invoice are covered, they 
 should be listed separately and the total extended. If 
 any deductions are made, these should be shown. In the 
 case of a statement, where one or more invoices are 
 omitted, their dates and amounts should be shown. 
 
 WORK OFTHE 
 
 ACCOUNTINGS 
 
 DEPARTMENT 
 
 PURCHASE 
 ACCOUNTS 
 
 AUDITING OR VOUCHERINQ INVOICES 
 
 ENTRY AND DISTRIBUTION 
 ENTERING ON I 
 VOUCHER -^ BALANCING 
 REGISTER 
 
 " POSTING TOTALS TO GENERAL LEDGER 
 
 CHECK DRAWN 
 FROM VOUCHER 
 
 ENTRY ON CHECK RECORD 
 
 ENTRY ON 
 VOUCHER REGISTER 
 
 ENTRY ON CASH BOOK 
 
 PAYMENTS 4 
 
 TOTAL DISTRIBUTION 
 POSTED TO GENERAL 
 LEDGER 
 
 SALES ACCOUNTS 
 FINANCIAL ENTRIES 
 
 FIGURE XIV: This chart outlines the duties of the accounting depart- 
 ment and especially the divisions into which the work on purchase accounts 
 naturally falls 
 
 Form III is a loose leaf voucher register designed par- 
 ticularly for record of vouchers and distribution of en- 
 tries to meet the requirements of corporation accounting 
 where a large number of accounts, both general and sub- 
 
90 ACCOUNTING PRINCIPLES 
 
 sidiary, have to be considered in distributing the 
 amounts. Columns are provided for miscellaneous gen- 
 eral ledger items, for a miscellaneous ''accounts receiv- 
 able" ledger, and such other sub-ledger or account as 
 may be used. Additional columns may "be added as 
 desired. On the other side are columns with the gen- 
 eral captions "Construction," "Equipment" and 
 "Operating," and a fourth similar column for any spe- 
 cial purpose. 
 
 Postings to the register are made from the voucher or 
 distribution slip and thence direct to the subsidiary 
 books. The advantages of this register form are that 
 it is very compact', makes a comparatively small record 
 book, is simple and will accommodate a wide classifica- 
 tion of accounts. It does away with a multitude of col- 
 umns, which are awkward to use and subject to error. 
 
 The voucher, when registered, should be so marked, 
 and certified by the auditor. If the approval of the 
 head of the department is required, it should receive 
 his signature and go from him to the final official, who 
 approves it for payment. Stripped of all papers, the 
 bare voucher is then sent to the treasurer for payment. 
 
 Remittances may take the form of a check, in which 
 case the payee receipts the voucher. A great deal of 
 work, however, is saved and a better record obtained by 
 converting the voucher itself into a voucher check. For 
 this purpose a stamp similar to this is used: 
 
 THE CITY NATIONAL BANK 
 
 Will pay this voucher when properly receipted. 
 No. . . . Treas. 
 
 A safety punch should mark in the amount to prevent 
 alteration. The counter signature of the president, 
 
PURCHASE ACCOUNTS 
 
 91 
 
 
 JJL 
 
 Li 
 
 s o 
 
 5 < 
 
 2 S 
 
 ii 
 
 u O 
 i * 
 
 ^ 
 
 2w^ 
 
 s 
 
92 ACCOUNTING PRINCIPLES 
 
 when required, is already on the voucher when approved 
 for payment, and is not again necessary as it would be 
 if a check were issued. 
 
 It is a good plan to prepare all vouchers at the end of 
 the month so that only one voucher is necessary to 
 cover the entire monthly account of any one payee. All 
 invoices or bills which must be paid promptly during 
 the current month, to take advantage of cash discounts, 
 can be sent to the voucher clerk bearing a sticker with 
 the word "Rush," printed in red. Let it be a rule that 
 these be vouchered immediately. 
 
 HANDLING purchase accounts without use of a vouch- 
 er simplifies the routine of payments in a medium- 
 sized business and keeps a constant check on errors. 
 
 In the small business, a voucher system may be too 
 cumbersome. A small department store operating twelve 
 distinct departments has a simpler system which has 
 proved successful. This business pays most bills usually 
 weekly, taking advantage of all possible discounts. 
 
 When the invoice is received, it goes first to the ac- 
 counting department, where a form is stamped on it con- 
 taining spaces to record " entered, " "checked," "com- 
 pared," "corrected" and "paid." It is then given a 
 serial number which is recorded with a numbering ma- 
 chine both in the upper right-hand corner and also after 
 the word entered. This number identifies the invoice all 
 through the accounting process. Before being checked 
 for corrections it is entered in the loose-leaf purchase 
 journal (Form IV). 
 
 In addition to the details of the invoice given on the 
 left page, the form contains columns on the opposite 
 page for departmental distribution. At the end of the 
 month the totals only of each of the departmental col- 
 
PURCHASE ACCOUNTS 93 
 
 umns are posted to the general ledger as a charge to 
 each of these departments and a corresponding credit 
 given the purchase account. After the invoice has been 
 checked in the receiving room and the proper depart- 
 ment, it is returned to the accounting room, where it is 
 filed alphabetically preparatory to payment. 
 
 Checks are written direct from the invoice. In this 
 way, attention is immediately called to any notations 
 concerning errors, corrections or claims. In remitting, 
 the checks are accompanied by the statement voucher 
 (Form V) on which are listed all invoices covered by 
 the check with their designating numbers, deductions 
 and corrections. Carbon copies of these statement 
 vouchers are filed alphabetically and may be tipped 
 together in exact date order under each seller's name. 
 
 By this method all statements covering the entire ac- 
 count with any one seller are together in such shape as 
 to serve all the purposes of his purchase ledger account. 
 The invoices themselves are stamped "Paid" and filed 
 numerically for reference. 
 
 The statement vouchers are checked against the orig- 
 inal entries in the purchase journal. The date of pay- 
 ment is entered in the ' * When Paid ' ' column, in red ink, 
 so that the items remaining unpaid are more easily de- 
 tected when taking off a balance proof. The checks for 
 paying are put in pads and numbered serially. As filled, 
 they are entered in the check register shown in Form VI. 
 Columns are provided for the notation of discount and 
 other deductions from the gross amount of the invoice. 
 The form also covers the entire banking record. 
 
 An exact list of all unpaid bills is readily obtained at 
 any time by listing and adding the items not yet entered 
 in the "When Paid" column of the purchase journal. 
 The total proves the purchase account in the trial balance 
 
94 ACCOUNTING PRINCIPLES 
 
 at the end of the month. As the bills are usually paid 
 each week, a practice is made of proving the purchase 
 account thus every week, after the checks for that 
 week are made out. In this way any error is quickly 
 discovered in a list of several hundred bills, without the 
 necessity of waiting for the monthly trial balance. 
 
 After the purchase journal is proved against the pur- 
 chase account on the general ledger the record of pur- 
 chases is complete. It has been made entirely without 
 the aid of. a purchase ledger and at the same time with 
 all the desired results both in general and in detail even 
 to the trial balance of this section of the accounting. 
 There has been no posting of either individual invoices 
 or checks. This has been done entirely in monthly totals, 
 eliminating a large amount of work with a corresponding 
 saving in expense. 
 
 A/fANY business men are never happy unless they have 
 1 A a finger in every detail of their organization. This is 
 not executive control. It is executive interference, and it 
 has very far-reaching results in any business. It robs the 
 departmental managers of responsibility and initiative. 
 
 System is the soul of business and is the living spirit of 
 any concern whether large or email. I believe that the busi- 
 ness executive should systematize everything down to the 
 smallest detail. It is the small details in business which 
 are so apt to be overlooked; and yet at the end of a year, they 
 have a way of affecting profits to a very material extent. 
 But executive care for details is entirely different from 
 interference in details. 
 
 H. W. Hall 
 
 Managing Partner, Wellington and Ward 
 
IX 
 
 * HOW TO HANDLE SALES 
 ACCOUNTS 
 
 By William E. Wilson 
 Consulting Accountant 
 
 WHILE the order clerk who makes out the dupli- 
 cates of sales orders on various forms for the 
 different departments is usually a part of the accounting 
 force, yet the first actual accounting work in connection 
 with a sales order is after the goods have been shipped. 
 
 Attached to the shipping clerk's receipt is his copy 
 of the original order checked and corrected to show 
 exactly what goods were shipped. The office copy of the 
 original order is then turned over to the billing clerk, 
 who makes out a bill against the customer. In cases 
 where the items vary from the original order, explan- 
 ation is given of the corrections or shortages. This bill 
 is made in duplicate. One copy with one of the shipping 
 receipts goes to the customer. The other goes to the 
 bookkeeper. 
 
 It is common custom for the billing clerk to keep a 
 record of his billings and to turn over the total each day 
 to the bookkeeper for purposes of comparison. 
 
 Entry of the sales is made by the bookkeeper in two 
 ways. The first entry is on a register of invoices ren- 
 dered (Form I), the totals of which, when posted to the 
 sales account in the general ledger, constitute a record 
 of the sales and also of the " accounts receivable. " The 
 second entry is in the customers' ledger, which is fre- 
 
ACCOUNTING PRINCIPLES 
 
 quently in the form of a loose-leaf book (Form II) o? 
 card index system, a separate card or page being pro- 
 vided for each customer. The total of the debit side of 
 these customers' records must equal the totals of the 
 debit side of the "accounts receivable " account in the 
 general ledger. 
 
 When letters containing money in any form are 
 opened, the amounts received are noted on the letters 
 accompanying the remittances and the money can im- 
 mediately be prepared for deposit. This is usually the 
 first duty after the opening of a mail. The deposits are 
 made up and forwarded to the bank and the amount 
 entered on the stub of the check book and also in the 
 cash book, from which the totals of deposits are daily 
 posted to the debit side of the bank account in the gen- 
 eral ledger. 
 
 l/i NTRIES and books necessary for properly recording 
 -L^ sales routine work of the accounting department 
 and the right original entry and balancing forms. 
 
 The next duty in connection with the receipt of 
 moneys is to list the receipts on the daily cash sheet 
 (Form III). There can be as many amount columns on 
 this cash sheet as there are departments under which 
 sales are to be divided. The receipts are itemized on 
 the sheet to show the name of the remitter, the invoice 
 or character of purchase that the remittance was in- 
 tended to cover, character of funds by which payment 
 was made, and other memoranda needed for reference. 
 
 The totals from these cash sheets are daily carried for- 
 ward to their equivalent columns in the regular cash 
 book, from which receipts on account are posted to the 
 credit side of the "accounts receivable" account in the 
 general ledger. From the cash sheets are also posted the 
 
SALES ACCOUNTS 
 
 97 
 
 
 
 6.3 
 
 9 
 
98 
 
 ACCOUNTING PRINCIPLES 
 
 credits to the individual accounts in the customer's 
 ledger, or if duplicate bills are used instead of ledger 
 cards or sheets, these are filed among the paid accounts. 
 The use of the purchase invoice or voucher register 
 and distribution sheets, of the sales order record, cus- 
 tomers* ledger and cash book eliminates to a great ex- 
 
 WORKOPTHE 
 ACCOUNTING 
 DEPARTMENT 
 
 PURCHASE ACCOUNTS 
 
 SALES 
 ACCOUNTS 
 
 COPY Of SALES ORDER CM tCRID WITH SHIPMENT 
 COMES TO ACCOUNTING DEPARTMENT 
 BILL MADC OUT AND MAILED 
 
 REGISTER or invoices RENDERED 
 
 ENTRY MADE FROM CARBON OF BILL TO 
 CUSTOMER'S LEDGER 
 
 TOTALS POSTED TO GENERAL LCDGIRj 
 
 f AMOUNT ENTERED ON LETTER 
 
 I AMOUNTS LISTED AND MADC UP ON DEPOSIT BLIP 
 \ TOTAL ENTERED IN CASH BOOK 
 
 I CREDITS POSTED TO CUSTOMER'S LEDGE* 
 TOTALS POSTED TO GENCRAL'UCDQEK 
 
 I CAPITAL STOCK 
 
 eoRRECTioiror ACCOUNTS 
 
 < CAPrrAL.NTR.W.D,V,DCD. 
 I RELATING TO STOCK AND MERCHANDISE 
 ^ACCOUNTS PAYABLE AND RECEIVABLE 
 
 FIGURE XV: The work of the accounting department having to do with 
 
 sales and financial entries is given here. The latter entries are relatively 
 
 infrequent but important, and are generally made through the journal 
 
 tent the need of a journal, the postings to the general 
 ledger being made directly from the above named rec- 
 ords. There are, however, certain entries that cannot 
 properly find a place in any of these subsidiary records 
 and for these a journal becomes necessary (Form IV). 
 The first of these are financial or organization entries. 
 
SALES ACCOUNTS 
 
 99 
 
 
 f 
 
 Is 
 
 l 
 
 it 
 
 15 
 
 it 
 
 - 
 
100 ACCOUNTING PRINCIPLES 
 
 They relate to the financial transactions on which the 
 business is founded, the credit or liability account, under 
 which the issue of capital stock is placed, the original 
 cash account before the funds are transferred to the 
 bank accounts, the issue of bonds or mortgages or other 
 funded debt, and the original purchases of real estate 
 or other large purchases not properly distributed 
 through the voucher register. 
 
 Another class of accounts that usually require jour- 
 nalizing are those relating to debit and credit obligations 
 in the form of promissory notes. The general ledger 
 contains a "notes payable " account and a "notes re- 
 ceivable" account. When a note is given by the busi- 
 ness in payment for a purchase, a journal entry is made 
 which debits "accounts payable" and credits "notes 
 payable. ' ' 
 
 In the same way, when a customer gives a note in pay- 
 ment for a purchase, a journal entry is made which cred- 
 its "accounts receivable" and debits "notes receivable." 
 In both of these cases the individual accounts on the 
 subsidiary records are balanced by the notes. 
 
 When you give or take a promissory note, you pay or 
 receive interest,- which is really wages for the use of 
 money. Assume, for instance, that you give John Jones 
 your note to run three months at 6 per cent for goods 
 whose value is $200. You include the sum you will have 
 to pay for interest in the amount of the note, making a 
 total of $203. The transaction appears in the journal as 
 follows : 
 
 Notes Payable to Sundries $203.00 
 
 Mdse. account $200.00 
 
 Interest 3.00 
 
 While entries of notes payable and receivable pass to 
 the general ledger through the journal, yet, as a matter 
 
SALES ACCOUNTS 101 
 
 of convenience and to permit a more complete record 
 of such transactions, a "notes payable and receivable" 
 record book is used. This is a specially ruled book in 
 two parts, one for notes payable and the other for notes 
 receivable (Form V). The notes as issued or received 
 are entered in this record and space is provided for full 
 details concerning the notes, the bank at which they are 
 payable and the date on which they are due. By means 
 of this record or through a tickler device the attention 
 of the bookkeeper is called to notes a few days before 
 they become due. 
 
 Subsequent to the original organization or capital ac- 
 count entries there may be other financial entries that 
 require journalizing. New stock or bonds or mortgages 
 may be issued to obtain increased capital; the funded 
 debt in the form of bonds or mortgages will be canceled 
 by payment ; dividends to the stockholders will be issued ; 
 a reserve fund may be established or other transactions 
 take place requiring the opening of new ledger accounts 
 and posting from journal entries. Depreciation of plant 
 and equipment is a credit entry which always reaches the 
 ledger through the journal. 
 
 While the correction of accounts can usually be made 
 by the use of debit and credit memoranda in the sub- 
 sidiary records, yet when such corrections are unusual 
 they also require special journal entries. 
 
 business was less competitive than it is today, 
 business men were satisfied to have an analysis of their 
 financial records made once a year, and not until that analysis 
 was complete had they any real idea of their financial con- 
 dition, or the results of the year's working. Under modern 
 competitive conditions, such a condition of affairs is becoming 
 less and less possible. 
 
 Edward Wade 
 
REPORTS THAT GUIDE THE 
 BUSINESS 
 
 By J. M. Cobb 
 
 R A DUALLY the executive is getting away from the 
 idea that efficient control of his business necessi- 
 tates constant personal supervision of details. The ten- 
 dency is rather to bring those matters which demand his 
 attention to him in summarized form, to concentrate his 
 work at his own desk instead of requiring that he go to 
 the source of his problems and draw his information 
 from constant personal investigation in the various de- 
 partments. Many a business man spends ten hours a 
 day keeping in touch with details which a few concise 
 reports would give him in one-fifth of that time. 
 
 Based on neither judgment nor guess-work, such re- 
 ports afford an accurate means for promptly correcting 
 errors or extravagances in policies and methods, check- 
 ing the accumulation of otherwise inevitable losses, and 
 quickly developing plans which results have shown to be 
 profitable. The value of the periodical statement no 
 longer lies merely in the fact that it tells the merchant 
 or manufacturer that his business has made or lost so 
 much during the year and that he is in sound financial 
 condition or on the verge of bankruptcy. It does, in- 
 deed, show the net worth of the business and its financial 
 condition, but of infinitely greater value, it tells which 
 operations are being carried on at a profit and at what 
 
BUSINESS REPORTS IPS 
 
 margin, so that the more profitable lines may be retained 
 and the less profitable discarded ; further, it shows which 
 lines are causing a loss in time to apply the remedy. 
 
 In his daily reports the business man ordinarily needs 
 to know the following things: 
 
 (1) Total Sales. 
 
 (2) Total Receipts. 
 
 (3) Total Purchases. 
 
 (4) Cash on Hand or in the Bank. 
 
 (5) Maturing Notes Payable. 
 
 (6) Maturing Notes Receivable. 
 
 This material can be given conveniently on a single 
 card (Form I). No figure is valuable of itself alone. 
 Its value lies in its relation to other figures of its kind, 
 and for this reason every report, daily or monthly, 
 should present records of the corresponding previous 
 period. 
 
 DAILY and monthly reports which reveal the up or 
 dourn tendencies of a bufiness, and catch little 
 leaks before they have time to do irreparable harm. 
 
 Some men make their daily reports extend far beyond 
 this simple accounting statement. One executive, for in- 
 stance, has a daily report of orders received ; another of 
 orders shipped ; a third showing the records of the bill- 
 ing department, with the number of invoices made out 
 by each operator; a fourth from the correspondence de- 
 partment. The number of labor and departmental re- 
 ports may be multiplied indefinitely for the purposes of 
 different officials, and the character of each business will 
 determine how many such records are needed. 
 
 Monthly reports are most valuable from the execu- 
 tive's point of view, because they cover a period exten- 
 sive enough to allow satisfactory comparisons, and show 
 
104 
 
 ACCOUNTING PRINCIPLES 
 
 tendencies and conditions. Such reports should by all 
 means show the financial condition or balance of your 
 business up to date, the trend of profit or loss and its 
 sources, the collections and obligations falling due 
 shortly, and essential details of assets, liabilities and in- 
 ventories. 
 
 The basis of the monthly report is the trial balance. 
 The accounts listed on it are analyzed so as to show in 
 detail the causes which have produced the results pre- 
 sented on the balance sheet. A little care in the ar- 
 rangement of accounts on the ledger will facilitate the 
 taking of the trial balance and the arrangement of it in 
 such shape that the executive, even though inexpert in 
 
 
 
 
 
 
 DAILY F 
 
 ?EPO 
 
 RT 
 
 
 
 
 
 
 DATE 
 
 RECEIPTS 
 
 LAST 
 YEAR 
 
 bDIS- 
 unsE- 
 IENTS 
 
 YEAR 
 
 BALANCE 
 
 LAST 
 YEAR 
 
 SALES 
 
 LAST 
 YEAR 
 
 BILLS 
 PAY- 
 ABLE 
 
 LAST 
 YEAR 
 
 BILLS 
 RECEIV 
 ABLE 
 
 LAST 
 YEAR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 FORM I: This daily report card gives the information necessary in a 
 
 moderate sized business. The card contains thirty-one lines and is used 
 
 for one month 
 
 accounting details, may readily understand its signifi- 
 cance. The asset accounts should appear in the first 
 part of the ledger and the liabilities in the last part. 
 Between these two general divisions the expense and 
 revenue accounts should be grouped. Each class is to be 
 kept distinct from the others. 
 
BUSINESS REPORTS 105 
 
 Fixed assets, representing investments in plant, build- 
 ings or machinery in a manufacturing business, as well 
 as real estate investments, fixtures, furniture and other 
 such items in the case of a merchant, are easily learned 
 in accurate accounts at the end of any month. This is 
 also true of cash, accounts receivable and similar liquid 
 assets. Current outstanding accounts are subject to a 
 deduction for possible losses, but this amount, instead 
 of being distributed on the basis of semi-yearly percent- 
 age, can with fair accuracy be apportioned every month. 
 
 Liabilities in most businesses can be ascertained with- 
 out difficulty. In the case of items which accrue at long 
 intervals, such as taxes and insurance, a monthly pro- 
 portion can be accurately determined and included in 
 the current accounts of any month, so as to show a com- 
 plete statement of liabilities. 
 
 The greatest obstacle to contend with in preparing 
 monthly reports is the inventory account of goods, mer- 
 chandise, unfinished work and other items of supplies 
 and material. There are three ways of determining fluc- 
 tuations in these accounts. 
 
 In the first place, an actual inventory may be taken 
 every month. There is in many businesses a legitimate 
 objection to this because the conduct of business is more 
 or less disturbed at the inventory-taking dates. 
 
 If possible, the stock-keeping system should be ar- 
 ranged on the plan of a perpetual inventory. This is 
 entirely feasible in most lines, and accurate results can 
 be secured at a minimum of clerical expense. Some re- 
 tail businesses, however, which carry a multitude of 
 small articles in broken packages, find the perpetual in- 
 ventory plan of stock-keeping impracticable, because the 
 clerical work involved renders the expense prohibitive. 
 
 In businesses where it is not advisable to have a per- 
 
106 ACCOUNTING PRINCIPLES 
 
 petual inventory, or go over the stock frequently, the 
 monthly variations in inventory value may be based on 
 estimates. You can determine this value in the following 
 way: Add to the inventory which closed the preceding 
 month all purchases made during this month. The result 
 is the total of all stock which was in your store. To find 
 the amount remaining, simply deduct the purchase price 
 of goods sold, which you get by subtracting from total 
 sales the total amount of mark-up on the goods sold an 
 average percentage being the basis for this figure. Re- 
 duced to dollars and cents, this method is as follows : 
 
 Inventory (estimated January 31) .... $20,000 
 Purchases for February 23,000 
 
 Total stock in store during February . . . $43,000 
 Gross sales for February .... $33,000 
 Estimated mark-up (33%) . . . 11,000 
 
 Purchase value of goods sold . . . $22,000 $22,000 
 
 Estimated inventory (February 28th) . . . $21,000 
 
 While this method is not absolutely accurate, the results 
 are sufficiently close to the actual figures to be relied on. 
 
 In a manufacturing business in which a comprehen- 
 sive cost accounting system is used, this difficulty in as- 
 certaining inventory value is entirely overcome, because 
 as a part of such system an exact running account of 
 the value of unfinished work and supplies has to be 
 maintained. 
 
 Presentation of the information shown on a financial 
 statement in such a manner that a knowledge of account- 
 ing is not necessary to comprehend it is important. 
 Many business men conducting large and successful busi- 
 nesses, and many bankers and financiers eminently 
 
BUSINESS REPORTS 
 
 107 
 
 skilled in financial matters, although good business men 
 and good bankers, do not know enough about account- 
 ing to understand why accounts payable show on the 
 credit side of the ledger and accounts receivable on the 
 debit side. In such cases an intricate statement is not 
 fully understood by those who should profit most by it 
 and merely defeats its own purpose. Comparisons with 
 other periods, and percentage figures connected with 
 
 STATEMENT OF FINANCIAL CONDITION 
 
 
 JUNE30 
 1812 
 
 JULY 31 
 1812 
 
 INCREASE 
 
 DECREASE 
 
 RESOURCES 
 
 
 
 
 
 
 
 
 
 PLANT AND MACHINERY, 
 
 
 
 
 
 
 
 
 
 PATENTS. GOOD WILL. ETC. 
 
 
 
 
 
 
 
 
 
 SUPPLIES AND UNFINISHED GOODS 
 
 
 
 
 
 
 
 
 
 ACCOUNTS RECEIVABLE 
 
 
 
 
 
 
 
 
 
 BILLS RECEIVABLE 
 
 
 
 
 
 
 
 
 
 CASH 
 
 
 
 
 
 
 
 
 
 TOTAL ASSETS 
 
 
 
 
 
 
 
 
 
 LIABILITIES 
 ACCOUNTS PAYABLE 
 
 
 
 
 
 
 
 
 
 BILLS PAYABLE 
 
 
 
 
 
 
 
 
 
 UNPAID PAY ROLLS 
 
 
 
 
 
 
 
 
 
 RESERVE ACCOUNTS 
 
 
 
 
 
 
 
 
 
 CAPITAL STOCK 
 
 
 
 
 
 
 
 
 
 SURPLUS 
 
 
 
 
 
 
 
 
 
 TOTAL LIABILITIES 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 FORM II: This sheet shows a simplified method of making out slate- 
 ments of the financial condition of your business 
 
 profit and loss do more than any array of figures stand- 
 ing alone, no matter how impressive. 
 
 Another mistake commonly made is the presentation 
 of results in too detailed a form, so that the salient fea- 
 tures do not stand out with sufficient clearness. It is 
 best to have first of all a general statement of your 
 
108 
 
 ACCOUNTING PRINCIPLES 
 
 financial condition (Form II), in which details have 
 been boiled down to comprehensive totals. The general 
 statement can be accompanied and supplemented by 
 
 MONTHLY STATEMENT OF PROFIT AND LOSS 
 
 
 JUNE 30 
 1912 
 
 % OF 
 TOTAL 
 
 JULY 31 
 1912 
 
 ; OF 
 
 TOTAL 
 
 IN- 
 CREASE 
 
 DE- 
 CREASE 
 
 EARNINGS 
 
 
 
 
 
 
 
 
 
 
 
 NET SALES 
 
 
 
 
 
 
 
 
 
 
 
 CASH SALES 
 
 
 
 
 
 
 
 
 
 
 
 MISCELLANEOUS REVENUES 
 TOTAL EARNINGS 
 
 PURCHASES 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 % OF 
 EARN 
 INGS 
 
 
 
 %.OF 
 EARN 
 INGS 
 
 
 
 
 
 INVENTORY ADJUSTMENT 
 
 
 
 
 
 
 
 
 
 
 
 ADVERTISING 
 
 
 
 
 
 
 
 
 
 
 
 SELLING EXPENSES 
 
 
 
 
 
 
 
 
 
 
 
 GENERAL EXPENSES 
 
 
 
 
 
 
 
 
 
 
 
 RESERVE FOR 
 
 
 
 
 
 
 
 
 
 
 
 DEPRECIATION 
 
 
 
 
 
 
 
 
 
 
 
 BAD ACCOUNTS 
 
 
 
 
 
 
 
 
 
 
 
 TAXES AND INSURANCE 
 TOTAL EXPENSES 
 NET EARNINGS 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 FORM III: The monthly statement of profit and loss, made up from the 
 trial balance, shows the net result of operations for the period 
 
 other reports showing each particular with greater de- 
 tail. One report may show the detailed sources of rev- 
 enue; another the details of expense. In this way the 
 executive grasps at once the general condition and the 
 results of the month's operations, while supporting de- 
 tails come readily from the additional reports. 
 
 The profit and loss statement (Form III) is entirely 
 distinct from the statement of the financial condition. 
 The latter is a snap-shot of the state of affairs at one 
 particular moment when the trial balance is taken; 
 the former is a summary of operations extending over 
 
BUSINESS REPORTS 
 
 109 
 
 the month. For it the sales and revenue accounts are 
 brought together, expense accounts deducted, and the 
 adjustment of inventory value is added or subtracted, 
 
 STATEMENT OF QUICK ASSETS AND LIABILITIES 
 
 
 JUNE 30. 
 1912 
 
 JULY 31. 
 1012 
 
 INCREASE 
 
 DECREASE 
 
 ASSETS 
 CASH 
 
 INVENTORIES 
 ACCOUNTS RECEIVABLE 
 SILLS RECEIVABLE 
 
 TOTAL QUICK ASSETS 
 
 LIABILITIES 
 ACCOUNTS PAYABLE 
 BILLS PAYABLE 
 UNPAID PAY ROLLS 
 RESERVE FOR BAD ACCOUNTS 
 RESERVE FOR TAXES AND INS. 
 
 TOTAL QUICK LIABILITIES 
 NET WORKING CAPITAL 
 TIXED ASSETS 
 PLANT AND MACHINERY 
 PATENTS GOOD WILL. CTC 
 
 TOTAL FIXED ASSETS 
 NET WORTH 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 FORM IV: A statement like this shows the quick assets sharply con- 
 trasted ivith liabilities of a similar kind and is valuable in judging the 
 worth of the business 
 
 as the case demands. Details of any of these general 
 groups may then, if desired, be exhibited on supporting 
 statements. 
 
110 ACCOUNTING PRINCIPLES 
 
 A supplementary report (Form IV) showing the quick 
 or liquid assets contrasted with the liabilities falling in 
 the same class, is exceedingly useful as a guide in finan- 
 cing and as a basis of credit. These items are really 
 vital in any active business, and the results shown indi- 
 cate soundness or frailty financially just as much as 
 does the entire financial statement. Many a business 
 has failed because of a disproportionate relation be- 
 tween its available quick assets and its fixed investments. 
 Furthermore, a statement of this kind is in many in- 
 stances the thing most seriously considered by bankers 
 and financiers in advancing credit. 
 
 A statement of liquid resources and debts may also in 
 turn be made the basis for an accurate statement of 
 financial requirements for the succeeding month. It 
 enables you to see just what debts are to fall due, meet 
 maturing liabilities without embarrassment, and avoid 
 the accumulation of surplus or unemployed capital. 
 
 I'T'HE character, permanency and component policy of any 
 * large concern is concentrated in some strong central 
 authority. From him emanate the policies, the ideas, the 
 forces that make the house. And the house's policy is his 
 specific way of doing things. This policy should be instilled 
 into every individual in the concern, but one man originates 
 it and he must be putting forth a new supply continuously. 
 However vague the policy-maker may be to the outsider, to 
 the business organization he is very real and definite. 
 
 F. J. Selden 
 
PART III- TESTED SYSTEMS 
 FOR KEEPING ACCOUNTS 
 
 Keeping- up with New Methods 
 
 AFTER forty years of experience, I am con- 
 vinced that success in business depends not 
 only upon natural ability, but upon a thorough 
 preparation and training in improved systems 
 and exact methods. This preparation is especial- 
 ly valuable in these later years when information 
 about the organization and methods of business 
 houses has become more general and competition 
 more keen. 
 
 As in the earlier days, the farmer could follow 
 the old-fashioned plow, mow his grass with a 
 scythe, and cut his grain with a cradle, paying 
 little attention to the fertilization of his land or 
 the science of farming, so the business man could, 
 in the crudest and most haphazard manner, meet 
 the requirements of his customers and make 
 money for himself. The automobile is no further 
 removed from the "one-horse shay" than is the 
 merchant and manufacturer of today from the 
 storekeeper and shop owner of yesterday. 
 
 He who hopes for success must organize, pre- 
 pare, enlist method and science, if he would live 
 upon the high plane which business has now 
 reached. 
 
A. C. BARTLETT 
 
 President, Hibbard, Spencer, Bartlett and Company 
 
XI 
 
 RETAIL ACCOUNTING 
 
 By J. F. Wenzel 
 
 FOR the retail business of almost any sort you need a 
 simple and well-arranged system of accounting 
 which will enable you to know at any time just how the 
 business is progressing. In a department store it is 
 necessary to show which department is making money 
 and which, if any, is losing money. Accounts should be 
 so arranged that the purchases, sales and cost of doing 
 business in each department are kept separate, just as 
 though each department were a distinct business in it- 
 self. Such a check by departments is almost equally 
 valuable in every retail shop and office. 
 
 Some merchants still keep their books by single entry, 
 believing that double entry means double work. But by 
 using columnar books or loose leaves it is only necessary 
 to make one extra posting to each department's account 
 each month in order to complete the double entry. The 
 actual amount of additional work involved in double 
 entry is scarcely more than 5 per cent. Yet double 
 entry, with its merchandise account and profit and loss 
 account, which single entry cannot carry, shows pre- 
 cisely how the business is progressing and provides for 
 comparisons of expenses year by year. Furthermore, 
 double entry safeguards against careless bookkeeping 
 by bringing out mistakes as a difference in balancing 
 
114 BOOKKEEPING SYSTEMS 
 
 the books. Without double entry it is impossible to 
 ascertain whether books have been correctly kept or not. 
 The following plan shows the order in which to place 
 your store accounts in the general ledger : 
 
 Cash 
 
 Accounts Receivable 
 
 Bills Receivable 
 
 Furniture and Fixtures 
 
 Vouchers Payable 
 
 Bills Payable 
 
 Reserves for Depreciation 
 
 Proprietor's Investment Account 
 
 Department I 
 
 Inventory 
 
 Purchases 
 
 Freight, Express and Dray age 
 
 Sales. 
 
 Expense 
 
 Salary 
 
 Advertising 
 
 Interest, Profit and Loss 
 
 (Other departments follow with the same analysis.) 
 General Expense 
 General Salary 
 General Advertising 
 Office Expense 
 Office Salaries 
 Delivery Expense 
 General Profit and Loss 
 
 These accounts are kept on loose leaves or cards, so 
 that their same relative position may always be main- 
 tained. 
 
 Every department manager should be provided with 
 a pad of triplicate order blanks, on which he specifies 
 the goods he wishes purchased for his department. He 
 keeps the triplicate sheet as his record and hands the 
 original and duplicate over to the general manager or 
 the buyer for approval. If approved, the original sheet 
 
RETAIL ACCOUNTS 
 
 115 
 
116 BOOKKEEPING SYSTEMS 
 
 is mailed and the duplicate is filed in the office to await 
 the arrival of the invoice and the goods. When orders 
 are given to traveling salesmen the order is made out on 
 the same form, and when approved, the original is 
 handed to the salesman. These blanks are uniform in 
 size and easily filed. 
 
 HANDLING purchase accounts in the retail store 
 checking invoices against incoming goods keeping 
 tab on the little items of expense and outgo. 
 
 When the goods arrive they are checked against the 
 invoice by the receiving clerk and in the department by 
 the manager, who O. K's quantity, quality and price 
 charged. He places the selling price on the goods and 
 also on the invoice for information of the management. 
 After the bookkeeper has figured the extensions and 
 footings, they are ready to be entered on the voucher 
 form illustrated in Form I. 
 
 The voucher gives all particulars of the account and is 
 made in duplicate, so that a copy may be filed for refer- 
 ence. The voucher itself is entered on the voucher regis- 
 ter (Form II), which then gives the necessary details of 
 settlement. The departments are charged with the goods 
 received by entering the amount in the distribution col- 
 umns of the voucher register and posting the total of 
 each column to the department purchase account at the 
 end of the month. There is no need of keeping ledger 
 accounts with creditors if this system is used. Vouchers 
 are dated ahead to the date they are due and filed in a 
 tickler. 
 
 At the end of the month the total of the "net amount" 
 column of the voucher is posted to the credit of the 
 "vouchers payable" account in the general ledger, and 
 after the amount of vouchers paid during the month, 
 
RETAIL ACCOUNTS 
 
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118 BOOKKEEPING SYSTEMS 
 
 as shown by the ' ' vouchers payable ' ' column in the cash 
 journal, has been charged to this account, it will then, 
 of course, show, as a difference, the amount the busi- 
 ness owes its creditors. 
 
 When the bookkeeper comes to making out the voucher 
 he refers to the creditor's folder, makes the proper 
 deductions, attaches invoices, letters, credit memoranda 
 and bills of returns to the voucher and hands it to the 
 general manager or other official in charge for approval. 
 After this approval is received the papers are detached 
 and placed in the "Unsettled Bills" section of the file, 
 and the voucher filed by due date in the voucher tickler. 
 
 Expenses of all kinds are taken care of by the "paid 
 out check," shown in Form III, which must be 0. K 'd 
 by the department manager. Freight and express, sal- 
 ary and advertising items are entered each day in their 
 respective columns in the cash journal (Form IV) and 
 are then divided among the different departments by 
 means of distribution sheets (Form V). 
 
 All the direct expense, such as salesmen's salaries, 
 rent, light and insurance, is at once charged to the de- 
 partments that incur it. The clerks' salaries may easily 
 be divided from the pay roll book each week ; rent should 
 be divided according to floor space used; light by the 
 number of kilowatt-hours required in the department, 
 and insurance according to the size of the stock. Over- 
 head expense items, such as the proprietor's salary, de- 
 livery, bookkeeping and general office expense, are 
 charged to general accounts,, and at closing time these 
 accounts are prorated and charged to the departments 
 on the basis of turnover, or the cost of goods sold, as 
 may be agreed. 
 
 In handling sales in grocery, meat and bakery de- 
 partments, which are largely on a cash basis, and where 
 
RETAIL ACCOUNTS 119 
 
 prompt service is desirable, cash registers can best be 
 used. In other departments, the ordinary duplicate 
 sales tickets are satisfactory. Each ticket should bear 
 the salesman's number, which may be made to designate 
 both clerk and department by having all salespeople 
 numbered in department I from one to nineteen, and in 
 department II from nineteen to thirty. 
 
 A sales ticket is made out for every sale. The amount 
 is also registered by the clerk on a " record of sales" 
 card. The original ticket is kept by the cashier and the 
 duplicate is given to the customer. At the end of the 
 day the cashier sorts the tickets by salesmen's numbers 
 and turns them in at the office, together with the cash. 
 The bookkeeper who usually audits the sales checks the 
 tickets with the "record of sales" cards and then sep- 
 arates cash from charge tickets. Daily sales are then 
 recorded on Form VI, which shows the daily cash and 
 charge sales of each salesman and department. 
 
 The "record of sales" card may serve a double pur- 
 pose. A new one should be given to each clerk every 
 morning. But first the bookkeeper should write on the 
 back the amount the clerk sold that day the preceding 
 year, to encourage an increase. These "record of sales" 
 cards are turned over to the manager after they have 
 been audited. They show him at a glance which clerks 
 are increasing and which are losing in sales. 
 
 The accounts with customers should be kept in a sepa- 
 rate ledger from the general accounts. The duplicate 
 statement ledger is admirably suited for this purpose, 
 as the statements are made out at the same time the 
 charge is entered, always ready to send on the first of 
 the month. The entries should be made direct from the 
 eharge tickets. 
 
 The daily postings may easily be proved without ex- 
 
120 BOOKKEEPING SYSTEMS 
 
 tra labor by the use of markers and an adding machine. 
 As postings are made markers are inserted in the ledger 
 showing the accounts affected. Markers of one color are 
 
 PROFIT AND LOSS STATEMENT, DEPARTMENT 1. 
 
 SALES. S16.T05.S2 
 
 INVENTORY (JUNE 30)... ...6,213.32 
 
 TOTAL VALUE RECEIVED -$22.920.84 
 
 INVENTORY (JANUARY 1). SS. 608.67 
 
 PURCHASES _ 13,073.42 
 
 TOTAL STOCK IN DEPT. 1 (JAN. 1 TO JUNE 30TH) $10,682.09 
 
 GROSS PROFIT... .. 4,238.75 
 
 FREIGHT, EXPRESS AND DRAYAGE $215.13 
 
 EXPENSE .722.7* 
 
 SALARY. _ 1.541.24, 
 
 ADVERTISING. 380.85 
 
 INTEREST... ..425.50 
 
 TOTAL EXPENSE DUDUCTIONS $3,285.43. - .3,285.43 
 
 NET PROFIT:.. 953.32 
 
 FORM VII: This chart shows the method of calculating profit and loss 
 from the records which the expense and merchandise accounts on the books 
 
 furnish 
 
 used to designate debit postings and another color shows 
 credits. In this way many errors in posting are located 
 at once, saving a great deal of time and trouble in taking 
 the trial balance. 
 
 /^LOSING the books and finding the percentage 
 V~/ statistics which guide the policies of the business and 
 show where the biggest returns are coming from. 
 
 The total charge sales for the month are then debited 
 to Accounts Receivable in the general ledger; and the 
 amount collected on account for the month, as shown 
 by the accounts receivable column in the cash journal, 
 
RETAIL ACCOUNTS 121 
 
 is credited to it, making this account show the total 
 amount due from customers. The correctness of the 
 customers' ledger should be tested each month by com- 
 paring the total of the balance with the balance of the 
 accounts receivable account. If the accounts with cus- 
 tomers are so numerous as to make several ledgers neces- 
 sary, an accounts receivable account may be carried with 
 each ledger, making it possible to prove each ledger 
 separately. 
 
 INVENTORY AT COST (JANUARY 1) ........... $6,908.67 
 
 PURCHASES ... _.... 13.073.42 
 
 FREIGHT, EXPRESS AND ORAYAGE. ...................... .215-13 
 
 18,697.22 
 
 CESS INVENTORY AT COST (JUNE 1) ... . . 6.215.32 
 
 COST OF GOODS SOLD . ............ .12.681.90 
 
 GROSS SALES. .... . ... 16.702.06 
 
 GROSS PROFIT. ........ . . 4.020.18 
 
 PER CENT 
 
 GROSS PROFIT TO SALES .... ...... 24. .1 
 
 NET 1! 'I..? _ 5.6 
 
 EXPENSE TO SALES . . 
 
 SALARY.. '* !. .... 
 
 ADVERTISING. _ .'I _.-_., ..... 2-3 
 
 INTEREST !._". ...2.8 
 
 TOTAL EXPENSE .I'-.'! _. ..18.2 
 
 FORM VIII: The approved method of calculating turnover on the basis 
 of sales and finding valuable percentages is shown in this chart 
 
 To close the books, after inventory is taken, the bal- 
 ance of the inventory, sales, freight, express and dray- 
 age accounts are transferred to the merchandise account. 
 The merchandise account is credited with the new inven- 
 tory, and it then shows the gross profit of the depart- 
 ment. This balance is credited to the profit and loss ac- 
 count of the department, and after the expense, salary, 
 
122 BOOKKEEPING SYSTEMS 
 
 advertising and interest accounts have been charged 
 against it, this account will show the net profit or loss of 
 the department. This, when carried to the general profit 
 and loss account, will show the revenue derived from the 
 entire business (Form VII). 
 
 At closing time each department should be charged 
 with interest on the amount of capital used, and the total 
 interest charged to all departments may be credited to 
 the general profit and loss account to complete the 
 double entry. While this practice does not decrease or 
 increase the earnings of the business, it makes the net 
 profit, if any, represent the amount the department made 
 over what might have been realized on the money if it 
 had been loaned instead of invested. 
 
 As already mentioned, the general expense should be 
 prorated and charged to the departments on the basis of 
 turnover. The percentage of gross and net profits and 
 costs of doing business should be figured on the basis 
 of sales. (See Form VIII.) Comparative percentage 
 statistics are valuable in every business. With this 
 system of accounting, it is easy to arrange a book in 
 which results may be recorded from year to year for 
 comparison and reference. 
 
 TV/TORE than one business has found itself in the bank- 
 ruptcy court through an unnoticed leak that had had 
 free play during a long period. The remedy for this state 
 of affairs is an efficient system of continuous analysis of the 
 financial records of a business. 
 
 Edward Wade 
 
XII 
 BRANCH STORE ACCOUNTS 
 
 By C. A. Ransom 
 
 TOO many and too complicated accounting forms in 
 the retail business make accurate posting difficult, 
 and involve too much and too costly clerical labor. If, 
 however, the records used do not furnish enough infor- 
 mation, one of the branches of the business will run out 
 of suitable stock or fail to bring in enough money. These 
 two things must particularly be guarded against in 
 branch store management. 
 
 Different branch or ''chain" stores use varying sets 
 of accounting forms. The details of these forms are 
 fairly standard, but the number of them differs widely 
 with the business and the amount of information desired 
 at the home office. 
 
 A system which seems to have neither too many nor 
 too few forms is in use by a corporation operating five 
 branch stores, catering particularly to the ten and 
 fifteen-dollar suit and overcoat trade. This company has 
 no difficulty in getting the information needed for the 
 economical management of its stores from that pre- 
 sented on five forms. 
 
 The first sheet (Form I) is the daily sales report. This 
 report is the basis of all branch store accounting sys- 
 tems. It is the daily sales record sent to the home office. 
 In this system it lists the various sizes of suits, as regu- 
 
124 BOOKKEEPING SYSTEMS 
 
 lar, stout and slim, together with the lot numbers and 
 the price of each suit sold. 
 
 This report is made out in duplicate by all branch 
 stores and all furnish precisely the same information. 
 The condition of the weather is exactly shown. Temper- 
 atures and rain or snowfall are given. As the sales 
 slips are posted to this daily sales report, the book- 
 keeper begins on his report several hours before closing 
 time, so that, as sales slips come in, the final posting may 
 be done up to the closing hour. Posting can thus be 
 done partially by low-salaried help during spare mo- 
 ments. 
 
 RECORDS which keep the management of a chain 
 of retail stores in close touch with the sales, ex- 
 penses and condition of stock in each of the branches. 
 
 (At the lower right-hand corner of this sheet is a 
 recapitulation of receipts and disbursements of the va- 
 rious kinds v of suits and overcoats. "A" indicates a $10 
 grade, "B" $15, and "C" $20. This sheet shows the 
 number of garments on hand at last report, receipts 
 since last report, sales for the day the report covers, 
 and the number of garments left on hand that evening. 
 
 The financial condition of the store is shown by the 
 deposit slips; where a cash business is done, the deposit 
 slip for the day must exactly balance with the sales for 
 the day. Aside from the accounting value, this acts as 
 an excellent basis on which to refuse credit; it is pos- 
 sible for the store manager to say honestly that he is 
 obliged to account for every suit sold by depositing the 
 price value in the bank. 
 
 A transfer order blank, shown in Form II, is used to 
 indicate the transfer of merchandise from one store to 
 another. It is possible, in economical branch store man- 
 
BRANCH ACCOUNTS 
 
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126 BOOKKEEPING SYSTEMS 
 
 agement, to run with a comparatively small stock, when 
 a careful system of accounting for transfers is used. A 
 good system of recording transfers makes this possible. 
 The form shown not only lists economically the transfers 
 made, but has space for any instructions regarding each 
 separate item. 
 
 If the manager of a store finds his stock running low, 
 or if he finds himself overstocked with certain garments, 
 he writes or wires the home office, giving full informa- 
 tion as to the numbers on hand. While this information 
 is shown in the above recapitulation, yet it might be 
 overlooked by the home manager and, for this reason, 
 branch managers are especially warned to look out for 
 coming demands to judge tendencies which indicate 
 few or greater sales along certain lines. 
 
 Form III shows the stock or lot sheet. This provides 
 for the listing of suits as bought and sold. The balance 
 remaining on hand may be struck at any time. The dif- 
 ferent sizes of suits and overcoats are listed, regulars 
 running from thirty to forty-six, with two spaces for 
 sizes larger than the forty-six size. Stouts run from 
 thirty-five to forty-two, with one extra space for posting 
 the odd size. 
 
 At the left-hand margin of the lot sheet is an invoice 
 and daily inventory summary. 
 
 Form IV is a memorandum form for inventory of sizes 
 on hand. It is kept only for the home office, so as to de- 
 termine what sizes are running low, that prospective 
 "outs" may be ordered. 
 
 In connection with the reports from branch stores, 
 which indicate what the probable demand will be, this 
 inventory tends to prevent either an over-accumulation 
 of odd sizes or running entirely out of sorts at any store. 
 
 This matter of keeping the stock so sorted as to pre- 
 
BRANCH ACCOUNTS 
 
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128 
 
 BOOKKEEPING SYSTEMS 
 
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BRANCH ACCOUNTS 129 
 
 vent the accumulation of odd sizes is one always to look 
 after, especially in branch store management. It is no 
 uncommon experience, even in a single store, to have 
 sizes or patterns, or both, accumulate to an extent that 
 causes large depreciation loss. Many stores lose from, 
 this cause approximately from one-half to one per cent 
 of the capital stock. Constant reference to each memo- 
 randum and study of its variations will effectually pre- 
 vent this. 
 
 Form V is the final form that is used in this store. It 
 is a summary of daily receipts posted from the daily 
 sales reports. Accompanying each daily sales report is 
 a duplicate deposit slip showing in what bank the daily 
 receipts were deposited and the amount. From the daily 
 sales report and this accompanying deposit slip,- the sum- 
 mary of daily sales is posted. 
 
 Best results are secured from this form by placing as 
 many on a single sheet as there are stores in total ; that 
 is, all branch stores and the home office. This sheet, 
 consequently, may be as large as eighteen by thirty 
 inches. The sheets are kept in pad form, posted singly 
 and then bound for reference in a loose-leaf binder. 
 After sales have been footed, the figures are placed in 
 a grand total sales column at the right of the sheet. 
 
 A THOROUGH knowledge of the smallest details of one's 
 ** business, well-directed effort in work, and the power 
 to organize a business these are the three foundation stones 
 of success. 
 
 Edwin A. Potter 
 
 President, American Trust and Savings Bank 
 
XIII 
 
 MANUFACTURING AND SALES 
 OFFICE ACCOUNTS 
 
 By Neil M. Clark 
 
 T~l ORMERLY it took three trucks to wheel our ledgers 
 JT into the vault at night. We turned a search-light 
 into the dark corners and found that we were a long way 
 behind the time. We thoroughly revised the system, and 
 the first day our new plan was in working order a single 
 man carried all the books in his arm at once." 
 
 The auditor of a middle western factory gave this 
 account of the great change wrought in his system by a 
 complete revision of bookkeeping methods. 
 
 Speed and accuracy are the key thoughts in the ac- 
 counting system of this concern. The company prac- 
 tically combines manufacturing and wholesaling on a 
 large variety of small articles. It operates thirty de- 
 partments, sells to retailers direct instead of to the job- 
 ber, and handles directly its rather extensive advertising 
 campaigns. Twenty salesmen are on the road continu- 
 ously. Records on sales require about the same amount 
 of attention in the accounting department as those on 
 the manufacture of the product. Costs are accurately 
 kept and closely bound up with the system. 
 
 The company's week ends on Friday. In spite of the 
 fact that the product is so diversified and the number 
 of salesmen and departments is large, the management 
 has, on the following Monday, the exact amount of the 
 
SALES OFFICE ACCOUNTS 131 
 
 sales and purchases of all departments for the previous 
 week, the sales of every salesman, and the " figured net 
 profit" of the whole concern. A dozen men and girls, 
 not counting employees in the billing department, take 
 care of the entire routine of accounts and the gathering 
 of desired statistics. 
 
 "POSTING purchase accounts with a view to securing 
 A the highest rate of speed and the greatest degree of 
 accuracy methods of checking the figures. 
 
 The accounting routine may be taken to begin with 
 the purchase of materials. When the invoice for a pur- 
 chase arrives it goes at once to a girl who checks the ex- 
 tensions and the total, so that the purchase bookkeeper 
 receives the invoice correct as far as extensions are con- 
 cerned. Invoices are entered alphabetically, one after 
 the other, in a purchase journal, which gives merely the 
 date of entry, the name of the seller, the due date, the 
 gross amount, terms of payment, and the number of the 
 department to which the purchase is charged. Three 
 postings are taken from this journal: first, to the pur- 
 chase ledger, where the seller is credited; next to the 
 bills payable book, and finally to the distribution book. 
 
 Loose-leaf volumes are used throughout the establish- 
 ment in preference to cards. The system is so carefully 
 planned, and records reach the bookkeepers in such well 
 classified form, that three hundred and twenty-five post- 
 ings in an hour, or an average of five and one-half per 
 minute, are not uncommon. A five-dollar-a-week boy 
 arranges the invoices or charge sheets for each book- 
 keeper in alphabetical order, just as the accounts appear 
 in the purchase ledger. In the purchase journal, there- 
 fore, the day's invoices are entered alphabetically, re- 
 sulting in an increase of about 100 per cent in the speed 
 
132 BOOKKEEPING SYSTEMS 
 
 with which postings are made to the purchase ledger. 
 The bookkeeper simply props up the journal in front 
 of him, using his left hand to turn the pages of the 
 ledger while he posts and checks with his right hand. 
 
 Another simple device for saving time,, derived from, 
 common sense rather than from scientific motion study, 
 is the fact that the bookkeeper posts from the place 
 where he left off recording invoices in the journal rather 
 than from where he began. Starting at the bottom, he 
 works back to the top, posting and checking as he goes; 
 and naturally he also starts at the back of the ledger 
 and works to the front. By the time the right hand has 
 finished posting and checking, the unoccupied left hand 
 has lifted several pages and found very nearly the place 
 for the next posting. With practice the operation be- 
 comes almost automatic. 
 
 It is impossible to attain the same rate of speed in 
 posting from the purchase journal to the other two books 
 required for completing purchase entries. Since the in- 
 voices are originally entered in alphabetical order, the 
 payment dates do not follow one another in any logical 
 order, nor are the purchases consecutive with relation to 
 the department concerned. 
 
 Posting to the departmental distribution book is not 
 difficult, however, for it has to be done only once a week, 
 and all departments are taken care of on one sheet 
 (Form I). Besides serving for the proper distribution 
 of purchases, this sheet is used to secure a check on accu- 
 racy. When a bookkeeper has finished entering the de- 
 tails of an invoice in the purchase journal he sends it to 
 the department for which the goods were bought. Each 
 department checks in its own goods. The factory is not 
 so large but that one superintendent can take charge of 
 several departments, but the records of each one are 
 
SALES OFFICE ACCOUNTS 
 
 133 
 
 kept absolutely separate. The receiving clerk checks 
 the invoices first against the copy of the order, then 
 against the goods when they arrive. By the end of the 
 week the invoices in each department are totaled and 
 compared with the total charged in the distribution, 
 book. A mistake in posting, or the loss of an invoice 
 anywhere along the line, is thus caught at once. 
 
 In paying its bills the concern does not use the in- 
 voice, but gathers the necessary details from the bills 
 payable book, which is posted from the purchase journal. 
 This book is a loose-leaf volume also, arranged so that 
 new sheets can constantly be added and dead sheets re- 
 moved. Every future day for three months has one or 
 more sheets, arranged chronologically, on which are the 
 
 DEPARTMENT PURCHASE DISTRIBUTION 
 
 FORM I: This form is used for the distribution of purchases to the proper 
 
 departments. Each department checks up its own records weekly against 
 
 the total shown in this book 
 
 details necessary for the payment of every bill due on 
 that day. In the morning the bookkeeper runs through 
 this list and makes out a remittance blank (Form II) 
 for every creditor to whom bills are owing. As many; 
 
134 BOOKKEEPING SYSTEMS _^ 
 
 bills as possible are paid at one time. The concern finds 
 that its bills bear a great variety of discounts, and the 
 remittance sheet is ruled in such a way as to take care 
 of these. The first column is for the date of the invoice, 
 the second for remarks or the invoice number, and in 
 the next three columns amounts are entered in their 
 proper place according to the terms of payment. These 
 terms are inserted in the box at the top. Net amounts 
 are extended to the fourth, or total, column. 
 
 This bookkeeper also makes out the paying check and 
 sends it, with the remittance blank, to the treasurer to 
 be signed. The check book serves as an original entry 
 book of payments. Totals go from it to the cash book 
 and details are entered as debits to the proper sellers' 
 accounts. 
 
 This concern also keeps its sales accounts both speedily 
 and accurately, and draws from them a great variety 
 of valuable statistics. The invoice is made out in dupli- 
 cate, the first copy going to the customer, the second be- 
 ing the charge sheet from which postings are made. 
 
 /CHECKING sales price and figuring the profit 
 V_/ using the "census machine" to gather valuable 
 statistics of sales by department and salesman. 
 
 From the billing department the invoice reaches the 
 sales accounts department, with the items and prices 
 marked, but without the extensions. Here comes the 
 first check to insure accuracy. With the use of comput- 
 ing machines one girl figures extensions on the invoice 
 copy and another on the charge sheet copy. The two 
 sheets are then compared and they must agree, or the 
 mistake made by one of the girls must be located at once. 
 
 Accuracy being insured, speed again becomes the dom- 
 inant consideration. The same boy who sorted the in- 
 
SALES OFFICE ACCOUNTS 
 
 135 
 
 voices also sorts the charge sheets, separating them first 
 by states to find which bookkeeper they belong to, and 
 next arranges alphabetically the accounts for each sales 
 ledger, binding them in temporary covers to prevent 
 
 BILLS REMITTED 
 J< 
 
 TO. 
 
 NO RECEIPT 
 CHIC/ 
 BV 
 
 DHNSON BRC 
 
 REQUIRED 
 
 kGO 
 
 ..-.191 
 
 DTHERS CO.. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^^r^-i 
 
 
 
 
 
 "*** j 
 
 
 
 
 
 
 -_ 
 
 ^ -'"I 
 
 
 
 v 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 PLEASE 
 
 
 
 
 , 
 
 
 
 *S OR D 
 
 SCRCP/ 
 
 
 
 
 
 FORM II: This remittance blank goes uiik paying checks. The extra 
 columns are provided for the entry of bills bearing di/erent discount rates 
 
 their becoming disarranged. In this form they go first 
 to those who figure the profit, next to the ledger book- 
 keepers and finally to girls who dissect and analyze the 
 statistics. 
 
 Every article manufactured and sold by this concern 
 has a number. Articles in Department I, for instance, 
 are numbered 101, 102; in Department XV they are 
 numbered 1501, 1502, and so on. Experience and care- 
 ful statistics in the cost department have taught the 
 
136 BOOKKEEPING SYSTEMS 
 
 management very nearly the exact cost of every article. 
 These costs are arranged in a profit and loss book op- 
 posite the number of the article concerned. This book 
 is revised every two or three months, as new articles are 
 added to the list or old ones are dropped. A profit 
 calculator runs through this book in connection with the 
 charge sheets and marks in red ink on the latter the 
 amount of profit and loss incident to the bill. Losses 
 are indicated by a circle drawn around the amount. The 
 " figured net profit" thus arrived at generally has a per- 
 centage of error not greater than 1 or 2 per cent. 
 
 The profit figurer catches large and apparent mis- 
 takes. For instance, if an item numbered 908 appears 
 on the charge sheet as selling for $2.00, and the cost of 
 the article as shown by the profit and loss book is $3.78, 
 an inquiry is at once sent to the department or sales- 
 man concerned. The mistake may be in the number of 
 the article perhaps the number should have been 809 
 or it may be that the salesman or billing clerk made a 
 mistake in quoting or copying. At any rate, glaring 
 errors are caught, and the sales bookkeeper receives his 
 charge sheets with practically no errors in them. 
 
 He receives them also in such shape that speed in 
 posting is made possible. But, since he must turn the 
 pages of both the ledger and the charge sheets, it is not 
 possible for him to post and check quite so rapidly as 
 the purchase bookkeeper does. He follows the same sys- 
 tem, however, proceeding from the back of the book to 
 the front, posting each bill to its proper account in the 
 loose-leaf customers' ledger. 
 
 "When the bookkeeper is through with the charge sheets 
 a series of valuable statistics is drawn from them. In 
 the first place, a girl totals the sheets on the adding 
 machine to get the grand total of sales for the day. 
 
SALES OFFICE ACCOUNTS 
 
 137 
 
 Another girl goes through each book and, with a card- 
 punching machine, " spots in" the details of each bill 
 on a specially arranged card which shows the date, the 
 
 
 WtCHCNDI 
 
 WEEKLY SUMMARY 
 
 MA 1Q1 
 
 
 
 
 DCPT. 
 
 LAST WEEK'S 
 INVENTORY 
 
 TOTAL 
 PURCHASES 
 
 RETURNED 
 GOODS 
 
 TOTAL 
 SALES 
 
 FIGURED 
 NET PROFIT 
 
 t 
 
 
 
 
 
 
 
 
 
 
 
 2 
 
 
 
 
 
 
 
 
 
 
 
 3 
 
 
 
 
 
 
 
 
 
 
 
 A 
 
 
 
 
 
 
 
 
 
 
 
 6 
 
 
 
 - - J 
 
 
 
 
 
 
 
 
 22 
 
 
 
 
 
 
 
 
 
 
 
 23 
 
 
 
 
 
 
 
 
 
 
 
 24 
 
 
 
 
 
 
 
 
 
 
 
 25 
 
 
 
 
 
 
 
 
 
 
 
 27 
 
 
 
 
 
 
 
 
 
 
 
 te 
 
 
 
 
 
 
 
 
 
 
 
 30 
 
 
 
 
 
 
 
 
 
 
 
 RETURNED 
 GOODS 
 
 
 
 
 
 
 
 
 
 
 
 TOTAL 
 PURCHASES 
 
 
 
 
 
 
 
 
 
 
 
 LAST WEEK'S 
 INVENTORY 
 
 
 
 
 
 
 
 
 
 
 
 TOTAL 
 STOCK 
 
 
 
 
 
 
 
 
 
 
 
 TOTAL 
 SALES 
 
 
 
 
 
 
 
 
 
 
 
 FIGURED 
 NET PROFIT 
 
 
 
 
 
 
 
 
 
 
 
 COST OF 
 GOODS SOLD 
 
 
 
 
 
 
 
 
 
 
 
 INVENTORY 
 ENDING 
 
 
 
 
 
 
 
 
 
 
 
 FORM HI: This weekly summary card gives the total of purchases and 
 
 tales and the figured profit of all departments. It serves the purpose of 
 
 giving an approximately exact inventory each week 
 
 department and salesman making the sale, its amount, 
 and the figured amount of profit or loss. These cards 
 are run first through an electric tabulating machine to 
 
138 BOOKKEEPING SYSTEMS 
 
 find the total of sales, as a check on the work of the first 
 girl. The machine then separates the cards in any way 
 desired according to salesman, or department, or any 
 other classification, and the total of sales for that par- 
 ticular classification is speedily found. A summary of 
 the week's transactions is made on Form III. The con- 
 cern gets these required statistics for the week in a quick 
 and accurate manner, and they form a definite aid in 
 guiding the policy of the business. 
 
 "C^VERY business must have a start, and as it grows re-or- 
 *~* ganization should be constantly resorted to, as it is rarely 
 that an organization which will carry the details of a small 
 business will prove effective for carrying on a larger one. 
 It is remarkable what an enormous amount can be saved in 
 a manufacturing business when every detail, large or small, 
 is carefully watched through the medium of an efficient 
 system. System is, in fact, the very soul of business. 
 
 H. W. Hall 
 
 Managing Partner, Wellington and Ward 
 
XIV 
 
 SIMPLICITY IN BANK 
 RECORDS 
 
 By J. M. Cobb 
 
 NATIONAL banking requirements necessitate so 
 many detailed records in accounting that economy 
 in both the work and the procedure is very important. 
 The methods used by one bank of the smaller class are 
 particularly worthy of the interest of every official in 
 banking, trust and loan service, because of the successful 
 attempt to eliminate all possible extra work and repeti- 
 tion, and at the same time keep the records in such shape 
 that the details can promptly be furnished when de- 
 manded. 
 
 This bank, with a capital of $50,000, has deposits ag- 
 gregating a quarter of a million,, divided into more than 
 eight hundred individual accounts. The loose-leaf sys- 
 tem is used in all of the subsidiary books, from which 
 postings are made direct to the ledgers or other books. 
 All items are entered in detail on the general ledger, so 
 that reference to tickets or other forms from which the 
 entries were made is not necessary. 
 
 In handling cash, debit and credit tickets are made 
 for all transactions, including credit remittances for 
 which drafts are drawn. These are entered on a draft 
 ledger (Form I), and the totals of drafts made each day 
 are posted in the general ledger to the bank upon which 
 the drafts have been drawn. The total of exchange 
 
140 BOOKKEEPING SYSTEMS 
 
 as shown on the draft ledger is posted to the exchange 
 account likewise as a total. The total of the drafts 
 drawn, plus the exchange, balances with the total of 
 drafts issued, as shown on the teller's daily cash bal- 
 ance (Forms II and III). The other details as shown 
 on this form will also agree with the several correspond- 
 ing details as posted to the general ledger. 
 
 RECORDS for the bank which meet the requirements 
 of the law and show the exact condition of the 
 business how deposits and remittances are handled. 
 
 The bills and notes discounted are entered in the dis- 
 count ledger (Form III), and the total of this agrees 
 daily with the debit shown on the teller's cash balance 
 sheet,, thus proving that item. Only the total of this 
 is posted to the general ledger. Notes are then entered 
 in a loose-leaf tickler and filed in a pouch arranged 
 according to their maturity. 
 
 When notices are mailed for maturing notes the state- 
 ments are made from the tickler and then compared 
 with the notes themselves, thus avoiding the danger of 
 overlooking any of them or of mailing notices for any 
 which have been paid ahead. This acts also as a check 
 on the notes themselves at all times. If any note is 
 missing, attention is immediately called to it and it is 
 easily traced a week or ten days before maturity. 
 
 The notes as a rule are proved once a month to see 
 if they agree with the balance as shown on the general 
 ledger. Credit tickets are made for all discounts paid, 
 and credited as a total to the discount and interest col- 
 umn, as taken from the teller's cash balance sheet. 
 
 All remittances of checks to other banks are written 
 up on a simple remittance blank. A carbon copy of this 
 is made, which is filed in a postbinder and the amounts 
 
BANK RECORDS 
 
 141 
 
142 
 
 BOOKKEEPING SYSTEMS 
 
 of the remittance to the different banks charged to each 
 on the general ledger from these carbon copies. These 
 charges are made as a total, which should agree with 
 
 TELLERS D 
 
 THE FIRST NATIONAL BANK OF 
 
 NORTHFOLK. w VA. 
 ILVBALANCC DEBITS 
 
 NORTHFOLK 
 
 DATE 
 
 
 
 
 
 
 NOTES 018. 
 
 SUNDRY DEBITS 
 GENERAL LEDGER 
 
 CASH ITEMS 
 
 
 
 
 ^_^ 
 
 
 
 
 
 
 
 
 
 
 
 CERTIFICATES 
 OF DEPOSIT PAID 
 
 OR. RECAPI 
 
 ULATIC 
 
 ; 
 
 DR. 
 
 
 CURRENCY 
 
 
 
 
 LECALS ONES 
 
 AND TWOS 
 
 
 
 
 COLD 
 
 
 
 
 
 
 
 
 HALVES 
 
 
 
 
 QUARTERS 
 
 
 
 
 DIMES 
 
 
 
 
 NICKELS AND 
 PFNMira 
 
 
 
 
 
 
 
 
 CASH ITEMS 
 
 
 
 
 TOTAL CASH. . 
 
 
 
 
 CHECKS . 
 
 
 
 
 REMITTANCE* 
 
 
 
 
 
 
 
 
 CERT. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TOTAL DEBITS 
 
 
 
 
 
 
 
 
 
 FORM II: On this sheet are entered the items which make up the teller's 
 daily cash balance. This is one side only, containing space for debit entries 
 
 the total shown on the teller 's cash balance sheet. 
 
 The individual ledger is balanced each day and the 
 total of checks and deposits credited to the individual 
 
BANK RECORDS 
 
 143 
 
 deposits account on the general ledger as a total; the 
 total of checks and deposits taken from the teller's cash 
 balance sheet and the total of the individual deposits, as 
 
 THt FIRST NATIONAL BANK OF N 
 J105I1WJI L W. VA. 
 
 TELLERS DAILY BALANCt CREDITS 
 
 ORTHFOLK 
 
 
 DEPOSIT* 
 
 DEPOSITS 
 
 DRAFTS ISSUED 
 
 CERTIFICATES OF 
 DEPOSIT ISSUED 
 
 NOTES PAID 
 
 SUNDRY CREDITS 
 GENERAL LEDGER 
 
 
 
 
 
 
 
 
 
 
 
 
 DISCOUNT 
 
 CR. RECAPH 
 
 ULATIO 
 
 *S 
 
 CR. 
 
 
 BALANCE 
 BRO T F-WD. 
 
 
 
 
 DCPOB1TB 
 
 
 
 
 
 
 
 
 CERTIFICATES 
 or or* 
 
 
 
 
 NOTES PAID 
 
 
 
 
 DISCOUNT. .. 
 
 
 
 
 SUNDRY 
 GEN'L. LEOG. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TOTAL CREDITS 
 
 
 
 
 
 
 
 
 FORM 1 1- A: The reverse of the teller's daily cash balance sheet is here 
 shown. This furnishes the necessary columns for the entry of credits 
 
 shown on the general ledger, must agree with the total 
 as shown on the individual ledgers each day. 
 
 The adding machine is used for all possible purposes. 
 
144 BOOKKEEPING SYSTEMS 
 
 The remittances to banks are first run through the 
 machine to list tKe amount of the checks, and afterwards 
 the names of the payers and endorsers are filled in with 
 the typewriter. This plan has been found to be both 
 more rapid and more legible than pencil copy. 
 
 After the deposit tickets and credit tickets are all 
 entered they are filed at the close of the day's business 
 in a deposit ticket file, and at the end of the month 
 are bound and placed in the vault for future reference 
 whenever necessary. 
 
 In practical use this system affords an accurate check 
 on everything handled. Much less work is required 
 than by posting every item to one book and then trans- 
 ferring to another, in addition to which the liability of 
 error is very much lessened. The teller's daily cash 
 balance is in reality an original entry without the de- 
 tails of the item. 
 
 CYSTEM is to modern business what lubrication is to 
 ^ machinery: the better the means of lubrication the 
 smoother and more efficient the running; the better the system, 
 the greater ease and dispatch in managing small details, and 
 the more time for following out the main paths that lead to 
 success. 
 
 John Younger 
 
XV 
 
 PERSONAL AND 
 PROFESSIONAL ACCOUNTS 
 
 By Ernest A. Scholz 
 
 ACCURATE handling of accounts is relatively as 
 valuable for the records of the farmer or the law- 
 yer, the doctor or the business man out of hours, as for 
 the intricate operations of the large store or the complex 
 details of factory transactions. Men who have acquired 
 the habit of keeping personal expense accounts and have 
 developed that habit into a definite system have found 
 the satisfaction in knowing these accounts worth many 
 times the amount of attention required in keeping them 
 up. Furthermore, the man with an accurate statement 
 of his personal accounts before him is prompted to watch 
 his expenses with greater care and to cut out items which 
 show actual waste. 
 
 The first step toward a simple system for the keeping 
 of personal accounts is the definite classification under 
 certain heads of the channels of income and expense. 
 Make these divisions so general that once the classifica- 
 tion is determined any item of income or expense can 
 always be entered under one of them. For ordinary 
 purposes such a list as the following will answer your 
 purpose: salary, incidental personal expense,, life insur- 
 ance, banks, rent, furniture and household furnishings, 
 fuel, light, household help and daily household expenses, 
 fire insurance, medicines, vacations, books, magazines 
 
146 BOOKKEEPING SYSTEMS 
 
 and newspapers, charity, gifts and church donations. 
 Other divisions may be added to suit individual de- 
 mands. Secure a small journal and a ledger and open 
 an account with each of the classified heads. 
 
 The next step is to deposit all income in the bank as 
 soon as it is received. This reduces all money to one 
 source of supply and furnishes a basis for accounting 
 which makes the work simple. Every one of the accounts 
 named above,, with the exception of personal expenses, 
 can be paid by check. Thus a stub in the pocket check 
 book furnishes temporary registry of all expenses until 
 they are posted. You may keep your incidental per- 
 sonal expense account by estimating, at the beginning 
 of the week, the amount necessary for this item and 
 drawing a check payable to self for the amount. Oppor- 
 tunity is thus given to enter the total for personal ex- 
 pense in the check book stub, and the record furnished 
 is approximately correct. Of course, a portion of the 
 amount thus drawn may be expended for articles prop- 
 erly coming under other heads, but unless the purchases 
 are of considerable value the recording of them may be 
 neglected. 
 
 /CLASSIFICATION of all items of income and outgo 
 V^ is the first step in keeping personal accounts 
 finding the headings that you need. 
 
 Once a week the receipts and expenditures may be 
 posted to the books in a few minutes' time by simply 
 adding the amounts due to each division, as labeled in 
 the check book stubs and making the proper entries. 
 At the end of the month a trial balance may be made up, 
 showing the condition of each account for the month r 
 as well as the total expense for personal and household 
 affairs. Salary due, cash in the bank, fuel and house- 
 
PERSONAL ACCOUNTS 147 
 
 hold goods, furniture on hand, and so forth, may be 
 considered assets; outstanding bills for household ex- 
 penses, and similar items, are liabilities. It may not 
 seem necessary to carry your monthly balance to this 
 extent, but it is very easily done and has a definite value 
 for comparison from period to period. 
 
 At the end of the year a final report is taken from 
 the books, presenting the total receipts and expenditures. 
 This summary shows the expenses of each month, the 
 amount spent in each division each month. From this 
 concise summary much interesting and valuable infor- 
 mation may be drawn. 
 
 The comparison of the figures with those of other 
 years shows what month and what season demands the 
 greatest outlay of money; it permits you to follow the 
 interesting variations in the actual cost of living; it 
 forms a definite basis upon which to estimate the prob- 
 able demands during the coming year ; and, possibly best 
 of all, it shows where your money goes. 
 
 The farmer finds the simple journal and ledger system 
 suited to his needs, but his classification of accounts is 
 similar to that by departments in a large store. Each 
 field has its own account, and all labor, fertilizer or seed 
 used on it are charged against it, together with its acre- 
 age proportion of rent or taxes and interest on invest- 
 ment. All product harvested from the field is credited 
 to it at the current market rate, whether actually sold 
 or kept for home consumption. 
 
 Two acres of an Ohio farm,, for instance, are given 
 up to truck gardening. Half is planted to potatoes and 
 the other half to miscellaneous vegetables. When the 
 proprietor plows his garden or does any work himself 
 he charges the field with an amount of wages equal to 
 what he would have to pay to get the work done by 
 
148 ' BOOKKEEPING SYSTEMS 
 
 someone else. This farmer's general accounts are as 
 follows: horses, poultry, dairy, pasture, wood lot, truck 
 garden, potato field, meadow, corn field A, corn field B, 
 and miscellaneous. The last account includes pleasure 
 carriages and similar items which can not be charged 
 specifically against any one part of the farm. Its total 
 is prorated yearly over the other accounts. This system 
 is peculiarly valuable in that it enables the farmer to 
 know precisely what fields or crops are making money 
 for him and how much. When the farm is rented on a 
 share basis, the merchant-owner by this plan can not 
 only secure fair terms, but can trace the profit and loss 
 items and help his man bring the place to success. 
 
 DOCTOR, lawyer, dentist or farmer the profes- 
 sional man, whatever his line, needs an accurate 
 system of accounts as the basis for his charges. 
 
 |By adding a card ledger the doctor or lawyer also can 
 adapt the personal system to his needs. Each patient or 
 client is entered on an individual card, filed alphabet- 
 ically, which gives the date and itemized service, the 
 amount of the bill, when rendered, and dates and cash 
 received in payment. Running from left to right at the 
 top of each card is a series of numbers from 1 to 31, 
 standing for the days of the month. These numbers 
 serve as a follow-up for the date when payment is ex- 
 pected on an open account. Clips of twelve different 
 colors, one color for each month, complete the equip- 
 ment. 
 
 Assume that Mr. A. 0. Smith receives professional 
 services on May 16th, for which the charge is $12, and 
 he promises payment on or before the first of July. An 
 individual card is made out for him and filed under S. 
 The red clip (if that is the color denoting July) is 
 
PERSONAL ACCOUNTS 149 
 
 fastened to the card over No. 1, or July 1. When Mr. 
 Smith pays the clip is removed. If he does not pay as 
 promised the clip calls attention to the fact. 
 
 The system may at first seem complicated, but in real- 
 ity it is extremely simple. It serves the purpose of 
 showing exactly what accounts are open and when they 
 must be followed for payment. On the 17th of July, 
 for instance, the line of red clips indicates accounts due 
 on that date and not yet paid. These cards are taken 
 out, statements are sent and the clips moved ahead to the 
 next date when action must be taken. Dead cards 
 accounts which have been paid may be removed to a 
 separate file. 
 
 In addition to the routine of keeping these accounts, 
 there are many supplementary devices which relieve 
 your mind of details and avoid small troubles. One of 
 these is a tickler file, which serves to remind you of the 
 minor duties connected with your personal or profes- 
 sional affairs. The tickler is divided by twelve tabbed 
 cards for the months of the year and thirty-one day 
 cards, which may be advanced monthly. Reminder 
 slips filed ahead under the proper date in this tickler 
 come up automatically to suggest that a life insurance 
 premium is due, fire insurance or house rent must be 
 paid, the farm lease renewed, or any one of a hundred 
 other things demands a moment of attention. A glance 
 at the tickler each morning or once in two or three days 
 gets little things done on time. It is simply another way 
 of tying a string around your finger. 
 
 Another aid in keeping track of personal and pro- 
 fessional affairs is a vertical file kept at the office, on the 
 farm or in the home for receipts, letters and other 
 papers. Letters relating to personal business may be filed 
 for possible reference in alphabetical order. For re- 
 
150 BOOKKEEPING SYSTEMS 
 
 ceipts and similar papers yon may find filing by sub- 
 ject more convenient. Such an arrangement simplifies 
 work that has to be done, does away with the old story 
 of lost receipts or mislaid correspondence, and proves 
 itself a handy supplement to your accounting system a 
 convenience which with use becomes & necessity. 
 
 CCARCELY too much emphasis can be put on the value of 
 ^ a thoroughly modern office and factory system. Re- 
 peatedly I have been impressed with the extent to which the 
 manufacturer is inclined to depend upon progress in ma- 
 chinery and neglect progress in office and factory methods. 
 If his business is in any way yielding unsatisfactory results 
 the first thing the manufacturer seems to think of is "Get a 
 new machine or hire a new man" This is his common 
 panacea, and hundreds of manufacturing enterprises have 
 failed simply because improved machinery was expected 
 to accomplish what could only be done by means of good 
 sound business system that established routine of order 
 working along the lines of common sense and sound principle. 
 
 Alexander H. Revell 
 
 President, A. H. Revell Company 
 
PART IV- HANDLING 
 
 CORRESPONDENCE AND 
 
 OFFICE WORK 
 
 Science in Business 
 
 MODERN life has brought forth the modern 
 business man not the mere trader or 
 merchant, but the man of wide interests, and 
 large outlook, and broad sympathies, and keen 
 vision, and prophetic feeling. 
 
 The modern business man is watching for a 
 miracle. He is harnessing the forces of nature, 
 systematizing the forces at his command, com- 
 bining the powers of industry, regulating the 
 tendencies of society. 
 
 His hope is really the hope of the alchemist. 
 The alchemist did not turn lead to gold, but he 
 founded the science of chemistry, and chemistry 
 has made a new and deep revelation of the won- 
 ders of creation. 
 
 So the business man who has put the fruits of 
 the scholar's works to use and enormously lifted 
 the body of civilization, will very likely never see 
 the lead of modern industrial conditions turned 
 into the gold of an ideal human condition; but 
 he has evolved an idea, he has caught a glimpse 
 of a great truth, he has opened a door through 
 which the truth shall come forth. 
 
D. P. KINGSLEY 
 
 President, New York Life Insurance Company 
 
XVI 
 
 CORRESPONDENCE DETAILS 
 AND FILING SYSTEMS 
 
 By William E. Wilson 
 Consulting Accountant 
 
 EVERY business transaction must pass through your 
 correspondence department at some time. The 
 chief aim in organizing and conducting this department 
 is to handle correspondence and keep records. An over- 
 systematized or complicated correspondence department 
 is a drag on all other departments. 
 
 To organize your correspondence department eco- 
 nomically and correctly, place it in charge of the chief 
 correspondent under the office or business manager. 
 The chief correspondent is in authority over six sub-de- 
 partment heads; in coming jnfliL- elerk ; chie__sienog- 
 rapjier; head_^ling__ctek ; outgoing mail clerk; tele- 
 phone_.o_per-ator, an^.infermation clerk. It does not mat- 
 ter what the size of the concern may be, all these classes 
 of work must be maintained. They may not be indi- 
 vidual sub-departments in some houses one person may 
 be in charge of several of the branches but the division 
 of work always holds (Figure XVI). 
 
 Incoming mail is handled by the incoming mail clerk, 
 who sorts and divides it according to the departments. 
 All letters addressed to individuals are sent direct to 
 the addressee. All general correspondence is opened by 
 the chief clerk or incoming mail clerk; letters of great 
 importance go to the higher officials; letters requiring 
 
154 OFFICE WORK 
 
 individual attention are sent to the heads of the different 
 departments; routine letters go to the regular corre- 
 spondents. The course by which mail is distributed from 
 the chief clerk's desk is shown in Figure XVII. 
 
 Although all letters referring to the activity of any 
 department go direct to that department 's head, he may 
 have several sub-departments and send the correspond- 
 ence to a subordinate to be answered. 
 
 WRITING the letter neatly, promptly and correctly 
 is important in every office plans by which 
 stenographic work is checked and costs determined. 
 
 All mail of importance should come into the hands 
 of the chief clerk for examination, before it is referred 
 to the proper officials. He saves the heads of depart- 
 ments much labor by diverting unimportant matters 
 and turning nonsensical communications into the waste 
 basket. It is often a good plan for the chief clerk to 
 keep a record of all important mail and note to what de- 
 partments letters are sent; in this way he keeps his 
 fingers on the pulse of the whole correspondence organi- 
 zation, and can tell exactly what kind of attention was 
 given, each letter. In some concerns when the mail is 
 sent to the various departments, a record of all letters 
 sent to that department accompanies "the letters. At the 
 close of the day the index is returned with the attention 
 each communication received indicated upon the index. 
 If any communication is not attended to, the chief clerk 
 calls up to learn what disposition was given the matter. 
 
 The head stenographer is in direct charge of the 
 stenographic force of the office. While certain officials 
 or heads of departments may have private stenographers, 
 a force of general stenographers, subject to calls from 
 any department where service may be required prevents 
 
HANDLING CORRESPONDENCE 
 
 155 
 
 WORK OF THE 
 CORRESPONDENCE- 
 DEPARTMENT 
 
 CLASSIFYING 
 JDISTRISUTINO 
 (MAKING RECORD* OF flircRBCO CORRESPONOEMCC 
 
 STENOGRAPHIC 
 WORK 
 
 KEEPING WEEKLY WORK RECORB 
 FURNISHING STENOGRAPHIC SW 
 INSPECTING WORM 
 FOLLOWING UP WORK 
 
 ALPHABETICAL 
 
 NUMERICAL 
 ST SUBJECT 
 
 COHMC*l>ONpCNCC REQUISITIONS 
 TRANSFERRINO 
 rOLLOW.UR FILE 
 DOCUMENT FILING 
 
 NTCRHOUSC 
 
 < BASKET STSTEM 
 :OMMUNICATION I 
 
 INTCRHOUSE NOTE* 
 
 COLLECT! N 
 ENCLOCINa 
 
 OUTGOING MAIL 
 
 TELEPHONE AND KEERIN RECORM OfOUTOOINA CALLS 
 
 CLEGRAFH < 
 
 SERVICE I KREPINa RECORD* OF INCOMINa CALL*. 
 
 INFORMATION 
 
 I I 
 
 OUNO CALLER* 
 
 ORGANIZING MEMCNOEM 
 
 FIGURE XVI: 
 
 department is outlined in this chart, which shows 
 
 incoming and outgoing mail and other communications 
 
 The function of each division of the correspondence 
 
 the proper routine for 
 
156 OFFICE WORK 
 
 the time wasting and idleness which is generally the 
 accompaniment of the individual stenographer system. 
 
 All stenographers are assembled in one room. When 
 a call comes for a stenographer from an executive or 
 correspondent, the head stenographer makes out a dupli- 
 cate assignment slip (Form I), which is given to the 
 stenographer sent. On this slip the stenographer enters 
 the time of receiving dictation, of transcribing the let- 
 ters, and the number of letters. When the assignment is 
 completed the slip is returned to the head stenographer, 
 who compares it with the copy she has kept and files it 
 in the stenographer's folder. In this way the head 
 stenographer keeps track of the work done by each in- 
 dividual. 
 
 F*om these slips the amount of work done and time 
 put in is transferred to the individual typist's weekly 
 card (Form II). These cards may be made the basis of 
 a system of computing the costs of stenographic work, 
 as later described. 
 
 These record cards can be amplified to keep track of 
 postage and supplies, such as paper, envelopes, follow-up 
 sheets, carbons, books, pencils, and so on. 
 
 It is well also to have the chief stenographer see that 
 all work done is accurate and neat. Men judge your 
 business by what they see, and there is too much adver- 
 tising value in a neatly written, correctly spelled letter 
 to permit careless work. The work of every untested 
 stenographer should be carefully inspected by the head 
 stenographer before the letter is returned to its depart- 
 ment to be signed. 
 
 Promptness in work is also a matter for the head 
 stenographer. By referring to her copies of the as- 
 signment slips she checks work so that letters are not 
 left over in the note books from one day to another 
 
HANDLING CORRESPONDENCE 157 
 
 unless they are reported at night as unwritten. A 
 standard book of correspondence rules may well be ar- 
 ranged to cover all these points of letter styles, spelling, 
 
 
 
 
 WEEKLY MECOKO Or WON* 
 
 
 
 
 WCCR 
 
 
 
 
 
 
 
 0T 
 
 DICTATION NO 
 M **-| LETTtR* HRS 
 
 NO. 
 
 LCTTCHS 
 
 H. 
 
 LCTTtHS 
 
 H..| t T " T %. 
 
 -1 J?i. 
 
 HON. 
 
 
 
 AimiGNMtMT 
 
 LIP 
 
 
 
 TUtS. 
 
 
 
 TATION FIIOM HI 
 
 
 MO orLrrr 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 wco. 
 
 
 
 
 
 
 
 THU 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 AT. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 FORM I (front card): The stenographer's assignment slip is made out 
 in duplicate by the head stenographer for all work done. FORM II (back 
 card): Her weekly record gives a classified statement of all kinds of work 
 done each day 
 
 paragraphing, stationery and routine. It is also im- 
 portant that work be sent to its proper department in 
 time for correction and signing; in many cases where 
 it is a matter of great importance, it must pass through 
 the correspondent's hands, then on to the chief clerk or 
 a head executive for signing. 
 
 IMPROPER filing is sometimes the cause of aggravat- 
 A ing delays and lost business right methods bring to 
 light instantly any letter which is wanted. 
 
 .When the letters have been typewritten and sent back 
 for signature, the carbon copies go to the filing depart- 
 ment. This department, upon which the smooth run- 
 ning of any business depends, is in charge of a head 
 
158 OFFICE WORK 
 
 filing clerk responsible for the condition of the files. 
 
 The principal duty of the head filing clerk is to see 
 that all files are properly equipped, and that each sub- 
 ordinate is doing the work promptly and correctly. Fil- 
 ing letters in the wrong place soon renders the filing sys- 
 tem inadequate and almost useless. 
 
 The complete correspondence in each department, 
 when ready for filing, is gathered by a messenger, who 
 brings all copies to the sorter, a box arrangement (Fig- 
 ure XVIII) indexed with guides similar to the regular 
 file. This distributing device saves time and energy, elim- 
 inating the necessity of going from file to file. Corre- 
 spondence should pass into the regular file as quickly as 
 possible, so that if a letter is wanted the next day after 
 it is written, it can be found under its proper guide. 
 
 The simplest system is that which files solely by alpha- 
 betical arrangement. If the business is small, this plan 
 will be found sufficient. Each letter of the alphabet is 
 divided and subdivided as far as desired. The "A" 
 folders, for example, may be indexed "AB," "AD," 
 "AG," and so on. Under "AB" would be filed cor- 
 respondence, say, of Abbot Brothers Company, together 
 with the duplicate copies of outgoing letters to that firm. 
 Under i l AD ' ' would go letters to and from John Adams. 
 A transfer cabinet, similar in idea but containing larger 
 compartments, is used periodically to relieve the current 
 files. 
 
 When the correspondence of a firm is very extensive, 
 and the daily volume of matter to be filed is large and 
 comes under many headingis, a combination of geo- 
 graphical and alphabetical systems will be found most 
 suitable. The file is subdivided by guides printed for 
 states, and the correspondence of each state is arranged 
 alphabetically. There are fifty states and territories in 
 
HANDLING CORRESPONDENCE 
 
 159 
 
 i 
 
 
 
160 OFFICE WORK 
 
 the United States. The value of this system, therefore, 
 is evident. A dozen filing clerks can work together with- 
 out mutual hindrance. When you wish to locate corre- 
 spondence, moreover, ,the system has at once eliminated 
 forty-nine out of the fifty possible places where it would 
 be necessary to search. 
 
 In the numerical filing system, each correspondent has 
 his individual number, which always identifies him. 
 This requires a card cross-index arranged alphabetically. 
 "Where business requirements call for reference to sub- 
 jects treated in the letter rather than to the name of the 
 correspondent, numerical filing is sometimes satisfactory. 
 
 Your own business requirements will teach you what 
 peculiar adaptations of these plans to make. You can 
 have miscellaneous folders for infrequent correspondence 
 or special folders in varying colors to signify particular 
 classes of letters. The color scheme can also be extended 
 to include metal clips or guides on the index cards or 
 in filing drawers, so that the clerks will be able to locate 
 what they want with a minimum of time. 
 
 jThe filing should be so divided that each clerk will 
 have certain definite files in his charge and will be 
 responsible for their condition. This centers responsi- 
 bility and avoids confusion in filing. Such a rule re- 
 quires also that no one be permitted to take a letter 
 from the file except the clerk in charge. When you wish 
 correspondence from the files a correspondence requi- 
 sition (Form III) giving the name of the correspondent, 
 date and subject, and handed to the head filing clerk 
 gives notice to the clerk in charge. This requisition is 
 then filed in the place from which the letter is taken, 
 and returned to the department head signing it only 
 when the correspondence requested is turned back. At 
 intervals papers long outstanding should be called in. 
 
HANDLING CORRESPONDENCE 161 
 
 All correspondence is transferred once or twice a year. 
 In the alphabetical files, new folders may be provided 
 on the first of January of each year, and all correspond- 
 ence for the current year filed in the new folder. The 
 old folders are to remain in the case until July 1. On 
 this date all correspondence of the previous year is put 
 in transfer cases or other convenient files. This plan 
 leaves at least six months' correspondence in the files 
 at all times for reference. 
 
 The numerical transfer is effected in a similar man- 
 lier; new folders are to be provided on the first of 
 January for the correspondence of the coming year, and 
 
 FIGURE XVIII: The "sorter" is a convenient box in which correspond- 
 ence is placed temporarily and classified. It has divisions corresponding 
 to those in the general files 
 
 each new folder is inserted directly after the folder of 
 the same number, in which the correspondence of the 
 previous year is allowed to remain. The current year 
 is at the same time stamped on the index card. These 
 folders bearing the same number are left until July 1, 
 when the correspondence of the last year is removed. 
 
 When a letter is written which may require fur- 
 ther attention, have two carbon copies made; the first 
 
162 OFFICE WORK 
 
 carbon goes to the permanent file, while the second, made 
 out in the form of a tickler sheet (Form IV) with the 
 follow-up date indicated, is filed ahead to that date in 
 the tickler file. 
 
 All the follow-up sheets are best kept together in one 
 date file in the filing department. Each day the clerk 
 in charge takes out all letters filed to that date,, and in- 
 vestigates the correspondence concerning each to see 
 what developments have taken place. If a sale has been 
 made, or the letter has accomplished its purpose, nothing 
 is done with it. But if it has remained unanswered, it 
 is sent to the department for attention. 
 
 Besides this method of follow-up, a holdover file is 
 well maintained on each correspondent's desk to take 
 care of all important matters on which the correspondent 
 may be working, important business with which he 
 wishes to keep in touch or which is not ready for the 
 completed file. 
 
 Contracts, leases and all valuable papers belong in 
 the office safe. A letter file in the safe answers very well 
 for this purpose in the ordinary business house. But 
 where the concern conducts its business on a contract 
 basis or by special agreements, these valuable papers 
 need to be filed alphabetically in a special safe arranged 
 for that purpose, or to a special file in the office vault 
 which is to be found in all modern office buildings. 
 Copies of orders, where they run into large amounts of 
 money, are filed with valuable papers. 
 
 Ordinary papers, invoices and statements which have 
 been given attention and are not required in the ac- 
 counting department are to be filed in the regular cor- 
 respondence files, either under the name of the concern 
 from which they were received,, or under their sub- 
 jects. 
 
HANDLING CORRESPONDENCE 
 
 163 
 
 The most complete and satisfactory method of in- 
 ter-house messenger service provides that a messenger 
 shall visit each desk every half hour or oftener to col- 
 lect and distribute all mail and papers, and gather the 
 
 CORRESPONDENCE REQUISITION 
 
 LETTERS WANTED - 
 
 DATE OR SUBJECT. 
 
 LETTERS 
 DELIVERED. 
 
 DATE 
 DELIVERED 
 
 JAN. 
 
 FEB. 
 
 MAR. 
 
 APR. 
 
 MAY 
 
 JUNE 
 
 JULY 
 
 AUG. 
 
 SEPT. 
 
 OCT. 
 
 NOV. 
 
 DEC. 
 
 SUBJECT 
 TO 
 
 DATE 
 FROM 
 
 FORM III (back card): A correspondence requisition mu.it be filled ou t 
 by any person needing papers from the file. FORM I V (second card) : 
 Tickler sheet. FORM V (front card): Interhouse correspondence blank 
 
 matter for filing. Three baskets mounted one above the 
 other appear on every correspondent's or department 
 head's desk. The top basket is used for incoming com- 
 
164 OFFICE WORK 
 
 munications of all kinds. The second basket contains 
 documents for the messenger and outgoing correspond- 
 ence, and the bottom basket is for matter complete for 
 filing. By this method all correspondence is kept mov- 
 ing in the proper channels without delay. 
 
 Interhouse correspondence by telephone is not always 
 satisfactory where important communications take place 
 between the various departments of a house. Where 
 specific directions are to be sent to any department in 
 the house, have the communication dictated to a stenog- 
 rapher, who writes it on a note blank, filling in the sub- 
 ject and the names of the persons addressed and the 
 writer, as provided by Form V. When the note is ready, 
 it is signed with the initials of the writer and placed in 
 the messenger basket. By this method orders are not 
 forgotten and mistakes are located. 
 
 All matter of business importance should be put in 
 writing. The written order puts the employee and de- 
 partment manager "on record;" a detailed account of 
 every transaction between the employees of the house may 
 be had by consulting the files. A system of this nature 
 prevents the slips or inaccuracies of memory, a loss of 
 trade and money as well as the disorganization of the 
 office. 
 
 The outgoing mail clerk looks after the gathering, en- 
 closing, stamping and mailing of correspondence. When 
 the correspondence has been collected from all depart- 
 ments, it is sorted in the mailing room, and when there 
 are several letters to an individual, branch house, agency 
 or firm, they are all enclosed in one envelope, thereby 
 saving postage. 
 
 Where the various departments stamp the envelopes 
 a record is kept by the cashier of the amount of postage 
 given out. As this mail comes from the different depart- 
 
HANDLING CORRESPONDENCE 
 
 165 
 
 ments the outgoing mail clerk checks up and charges 
 each department with the amount of postage used. Daily 
 checking prevents a possible leak in the postage account. 
 A balance is struck at the end of every month. 
 
 The outgoing mail clerk needs to be familiar with the 
 schedules of all mail trains. In cases where the out- 
 going mail reaches large volume dispatch results from 
 keeping the letters assorted according to the geographi- 
 
 OUTGOING PAID MESSAGES 
 WEEK ENDING 
 
 DATE 
 
 FROM 
 
 TO 
 
 CHARGE 
 
 INCOMING COLLECT MESSAGES 
 WEEK ENDING 
 
 DATE 
 
 TO 
 
 FROM 
 
 CHARGE 
 
 FORM VI (back card): Card on which telephone girl keeps all outgoing 
 
 paid messages. FORM VII (front card): Incoming collect messages 
 
 are recorded on this card 
 
 cal mailing lists and further according to trains. Post- 
 office authorities are always willing to furnish informa- 
 tion along these lines. 
 
 The telephone operator has charge of the telephone 
 exchange and looks after all telegrams and telephone 
 
166 OFFICE WORK 
 
 messages. She keeps a record of all long-distance calls 
 and especially of the calls coming from the various de- 
 partments of the house; and also of all outgoing paid 
 messages (Form VI) and incoming collect messages 
 (Form VII). 
 
 Arrange also for an information clerk who will keep 
 posted on the working of the whole office and the per- 
 sonnel of the firm. It is his duty to meet visitors tact- 
 fully; to learn what they want and refer them to the 
 proper individual. In many instances the offices of 
 telephone operator and information clerk are combined. 
 All outgoing messenger boys are in charge of the in- 
 formation clerk. 
 
 Only by careful choice of employees for these six essen- 
 tials of office routine can you put at the disposal of your 
 executives the most efficient working machinery. Your 
 success depends upon simple rules, understood and firm- 
 ly enforced. 
 
 RECORDS kept in a haphazard way, or not kept at all, 
 don't mean "less office expense"; they mean chances 
 missed, sales lost, efforts wasted. 
 
 G. R. Clayton 
 
XVII 
 GETTING OUT THE MAIL 
 
 By Edward Mott Woolley 
 
 EXCEPT where tasks have been set or piece rates 
 fixed for certain repeat operations, such as enter- 
 ing orders, typing addresses, and folding and in- 
 serting circular letters, the day's work in the office has 
 varied as widely as the individual worker and the fac- 
 tors influencing him. Expert employees of every class, 
 by reason of their competence, have had to shoulder 
 double burdens. Higher wages have recompensed them ; 
 the less skillful have ''had an easy time." The busi- 
 ness has been the chief sufferer paying premiums for 
 work which, with proper organization, the slower clerks 
 could have accomplished; enduring delays that affected 
 customers and other vital interests while the overloaded 
 experts were "catching up" or recuperating from over- 
 time; carrying superfluous half -workers because there 
 was no clear understanding of how much was to be 
 done, how much one clerk or stenographer could do 
 and, therefore, how many employees were needed. Yet 
 these points are subject to the accurate appraisal that 
 comes of time-study and expert planning. 
 
 The one office activity which touches every business, 
 great or small, is the handling of correspondence the 
 everyday task of getting out the mail on time and in 
 the best possible shape. 
 
168 OFFICE WORK 
 
 Firms without number boast of their policy of an- 
 swering letters on the day of their receipt. Investigate 
 these and you will find that their correspondence is 
 nearly always routine and does not need sales effort 
 or personal attention. For the great majority of 
 houses, however, there are dozens or even hundreds of 
 letters daily which ordinary form-fed correspondents 
 cannot dictate, but which require the attention of execu- 
 tives saddled with many other functions. 
 
 T3 E-ORGANIZATION of an office showed startling 
 TV wastes in the conduct of the stenographic force 
 what time-studies and revised schedules accomplished. 
 
 A large eastern company determined to re-organize its 
 office along efficiency lines. The complaints of employees, 
 the obvious effect which delays were having on customers 
 and allied outside interests, the occasional breakdown of 
 over-driven stenographers and the increasing volume of 
 correspondence forced the decision to employ an "effici- 
 ency engineer." Though not the first activity on which 
 he turned his microscope, the handling of the company's 
 correspondence was the function which showed the most 
 serious time-wastes and money losses. 
 
 The conditions he found, it is safe to say, exist to some 
 extent in every business large enough to be department- 
 ized. Only a few minor executives had a fixed hour for 
 dictation; the others consulted their own convenience 
 exclusively, even to the length of postponing dictation 
 until late in the afternoon and continuing it long past 
 the five-thirty closing hour. Frequently a stenographer 
 quitting at six-thirty, after two or three hours "taking" 
 would have notes for twenty-five or thirty letters in her 
 book which could not be transcribed until the morrow. 
 Sometimes after an absence from the city an executive 
 
GETTING OUT THE MAIL 169 
 
 would have as many as fifty letters to dictate in a single 
 day. If after one of these ordeals, a stenographer failed 
 to report next morning, the congestion became more 
 acute and the effect on waiting customers more exasper- 
 ating. 
 
 Hiring extra girls to provide for these emergencies 
 helped but little. Advanced wages did not insure the 
 experts against occasional collapse. The situation called 
 for an increase in efficiency for the less skillful, and a 
 plan of distributing work so as to allow the finishing 
 and dispatch of each day's letters before closing time. 
 
 Analysis and time-study of every operation bearing 
 on the handling of corespondence was the main under- 
 taking. To discover or develop the best method of 
 writing a letter, to determine the minimum time which 
 should be allowed for it and the rest period necessary 
 to avoid strain and fatigue, you must have exact knowl- 
 edge of a dozen unit operations contributing to it. The 
 best way of inserting the letter-sheet, for instance, the 
 time it takes, the unnecessary motions indulged in by 
 most typists, were simple detail problems ; but it required 
 repeated stop-watch studies of a dozen of the deftest 
 stenographers before a standard for the use of all was 
 established. 
 
 One after the other, the unit operations were timed 
 and the straight-line method of performing each wrought 
 out. The swiftest, easiest way of locating the date line, 
 for example, the shortest way of finding the first address 
 line, the matter of margins, the line-lengths, the spacing, 
 were all subjects of careful investigation and experiment 
 before the standard for each was determined. To expe- 
 dite the typing, the style of the company's letters was 
 changed. The indenting of paragraphs was discontinued 
 (an extra line space serving to mark the transition) to 
 
170 OFFICE WORK 
 
 spare the operator the troublesome shifting of the car- 
 riage. 
 
 For time-study purposes, letters were resolved into 
 their unit elements date, address, salutation, message 
 and superscription, and the minimum time allowed for 
 writing each unit fixed. When the investigation and 
 standardization were finished, the company not only had 
 evolved the easiest form of letter to write, but it knew 
 also just how many minutes and seconds a competent 
 stenographer should take to turn out a seven- or ten- 
 line letter or one covering two pages. Knowing also the 
 daily maximum number of letters written it was easy 
 to figure how many girls were needed to get them out. 
 
 REGULAR dictation hours massed in the early part 
 of the day, and the relay handling of stenographers 
 resulted in dividing the work more equitably. 
 
 The investigator began by establishing hours for dic- 
 tation. Before, there had been no pretense of observing 
 either. Executives summoned and dismissed stenogra- 
 phers whenever it suited them, devoting half of one 
 morning to dictation and shifting, next day, to late af- 
 ternoon. The basic theory was sound, of course, that the 
 time of a boss is of greater value than that of a clerk. 
 As in many other offices, however,, the theory had run 
 to seed and the whim of the head ruled frequently in- 
 stead of the necessities of the department. 
 
 In framing his preliminary schedule of dictation 
 hours, the investigator deferred, as much as possible, to 
 the wishes and habits of executives. Several had pri- 
 vate secretaries and made requisitions on the general 
 stenographic force only when the secretaries were loaded 
 up. Others dictated virtually all their outside letter and 
 house notes and reports to general stenographers. The 
 
GETTING OUT THE MAIL 171 
 
 chief trouble had been that, after calling in a shorthand 
 writer the dictation was continued until the grist of let- 
 ters or reports was done a process lasting at times 
 three or four hours and leaving the girl too exhausted 
 to transcribe her notes even when time remained before 
 closing. 
 
 With a table of executives ' preferences in the mat- 
 ter of hours and stenographers before him, the efficien- 
 cy engineer arranged a dictation schedule which the 
 various heads accepted, though not a few grumbled later 
 when they found they were expected to observe it. The 
 bulk of the correspondence work was concentrated in 
 the forenoon while the afternoon dictation, except for 
 urgent letters or telegrams, had to be finished by four 
 o'clock, routine matters going over till next morning. 
 This left ninety minutes to the stenographer to clear up 
 her final " takes " and get the letters into the last out- 
 going mail. 
 
 To guard against the overloading of individuals, a 
 head stenographer was placed in charge. Her duty 
 was to supply stenographers according to the schedule, 
 consulting each head's preference as far as possible, and 
 supplying reliefs whenever any single dictation went be- 
 yond the established bounds. At or around four o'clock, 
 for example, these limits meant as many pages of notes 
 as could be transcribed in the eighty or ninety minutes 
 remaining of the day. Exceptions were made, of course, 
 where reports were in preparation and a break would be 
 inadvisable. 
 
 On straight correspondence, eight or ten pages of notes 
 would be the average ''take" if a relief was available. 
 When a stenographer was held beyond four o'clock, she 
 reported the circumstance. If the delay kept her from 
 transcribing all her notes before five-thirty she filled 
 
172 OFFICE WORK 
 
 out a blank stating how many letters were left over. 
 
 This relay plan of handling stenographers was adopt- 
 ed as a permanent system, despite the objections of 
 executives who missed the free-and-easy method formerly 
 in vogue. In many offices the relay system might prove 
 awkward or entirely unsuitable. It contains, however, 
 the germ of an idea which might be adapted either to a 
 small office where two stenographers are employed to 
 do what one might readily accomplish,, or to the large 
 organization where the general stenographers are compe- 
 tent to handle the correspondence of nearly all depart- 
 ments. 
 
 STUDY of machines and the work of individuals 
 revealed wastes and led to a standard "one best 
 way" for every operation. 
 
 With his temporary dictation schedule in force, the 
 investigator turned to analysis and time-study of the 
 things which affected speed and accuracy in individuals. 
 How many times a typewriter key should be struck in a 
 minute was a basic problem; before it was solved and a 
 standard determined, not only had a dozen operators 
 been studied with a stop-watch, and their personal meth- 
 ods and motions noted; but the inquiry had also taken 
 into consideration the action of different makes of ma- 
 chines, their condition, adjustment and repair as affect- 
 ing output, the placing and lighting of desks, their 
 height and design, and the height and character of the 
 chair. These physical factors were standardized before 
 the ultimate standard for the number of strokes per 
 minute was decided upon. The aim was to find the 
 easiest way, to eliminate interruptions and hindrances, 
 but at the same time to avoid undue physical and nerv- 
 ous strain and allow rest periods. 
 
GETTING OUT THE MAIL 173 
 
 With a stenographer of average capacity, speed in 
 shorthand work is governed by the speed of dictation. 
 The transcription of notes is a process which can be 
 standardized, however. In this case it was learned that 
 an operator, working at the efficiency required, would 
 need half an hour, or an hour to write a certain num- 
 ber of notebook pages. Thus, if she began at four 
 o'clock with a given number of pages to transcribe, and 
 was protected from interruptions, it was certain that her 
 letters would go to the sealing clerk at a certain desired 
 hour. If she failed, the cause clearly was low efficiency. 
 
 To supply the necessary incentive, a bonus of ten per 
 cent of her salary was paid to every girl who completed 
 her day's work before five-twenty and had her letters 
 in the mailing department. This did not mean that 
 she had worked all day at the maximum normal speed. 
 A stenographer's work cannot be gauged as precisely 
 as that of a machinist, who repeats over and over a series 
 of motions until it is finished and then begins immediate- 
 ly upon another series. In fact, it was not the purpose to 
 crowd stenographers all day, but in the afternoon the 
 work was almost continuous, and the bonus was meant 
 to encourage efficiency during this crowded period. Fin- 
 ishing her day's work within the prescribed time, a 
 stenographer filled out a blank, "I completed my let- 
 ters today at 5:20 p. m./' and handed it to the chief 
 stenographer. If she failed to finish the work, the slip 
 read: "I was unable to finish my letters until 6:20 
 p. m. The reason was that Mr. Lawrence did not finish 
 dictation until 5:10 p. m." 
 
 If the reason was due to some hindrance not her own 
 fault, she was allowed the bonus. The bonus consider- 
 ably reduced absences. Stenographers were paid for 
 moderate periods of absence, but the bonus was lost. 
 
174 OFFICE WORK 
 
 The stricter the adherence to the dictation schedule, 
 the more frequent was the successful accomplishment of 
 the tasks. The greatest single trouble experienced was 
 the difficulty in inducing executives to cooperate in 
 this direction. The habit was gradually formed, how- 
 ever, and the results in reduced office expense were so 
 marked that a violation of the rule without good cause 
 was inexcusable waste. Executives soon came voluntar- 
 ily to prefer the new method. Eventually, it was found 
 that stenographers working at the prescribed normal 
 efficiency, could accomplish nearly fifty per cent more 
 than the former average output. 
 
 The increase in efficiency was due largely to improve- 
 ment in conditions surrounding the work, rather than 
 to increased speed of operation. Interruptions were 
 guarded against and matter to be dictated was collated 
 in advance. 
 
 Letters and other papers were arranged in compact 
 form, and checked off as the dictation proceeded. If for 
 any reason a letter was not answered at its scheduled 
 time, it was put in a " delayed correspondence" basket. 
 If necessary to send it to some other executive, a mem- 
 orandum blank was required to be substituted. Every 
 day this basket of delayed correspondence was gone 
 through. Rubber bands over the baskets prevented mat- 
 ter from being lost. 
 
 Though thirty or more stenographers were employed, 
 no attempt had been made to group them according to 
 their work. Correspondence girls were intermingled 
 with others who did card or advertising work. 
 
 Furthermore, the less capable stenographers were 
 called on at times to do letter work, and frequently the 
 inferior classes of stenographic duty fell to better work- 
 ers. This policy was changed so that the most skillful 
 
GETTING OUT THE MAIL 175 
 
 operators were kept on the highest class of duty. The 
 correspondence stenographers were grouped by them- 
 selves. 
 
 The early time-studies showed large time-wastes due 
 to conversation. Another large loss came from unneces- 
 sary steps. Girls were constantly traversing the entire 
 office, some of them having to make long detours around 
 articles of furniture,, railings, and other obstructions. 
 Gates hindered their progress at several points. Two 
 of the girls, taking dictation from the higher officials, 
 made as many as forty or fifty trips of this sort a day. 
 
 STANDARDIZATION extended to apparent trifles, 
 ^ such as the proper way to insert paper in the type- 
 writer, and resulted in the long run in big savings. 
 
 To remedy conditions by minimizing conversation, and 
 eliminating unnecessary travel,, the correspondence 
 stenographers were brought to a central location and 
 grouped along both sides of the center aisles. The sub- 
 groups were arranged so as to separate operators by five- 
 foot screens, reducing noise and interruptions and mak- 
 ing conversation impossible without leaving the desk. 
 The offices of several executives were also centralized. A 
 buzzer call-system connecting these with the head stenog- 
 rapher 's desk was installed. 
 
 The old plan of lighting a hit-or-miss scheme of over- 
 head swinging lamps, with some desk lights was abol- 
 ished. The new system used lights attached to movable 
 arms allowing direct illumination to the machine or the 
 desk, as desired. Indirectly, the new system reduced eye 
 troubles and nervous strain. 
 
 Typewriters also were standardized. Half a dozen 
 makes had been in use, some admittedly inferior. The 
 make proved the best by test was adopted for general 
 
176 OFFICE WORK 
 
 use. A capable man was put in charge of the mechani- 
 cal care of the machines and stenographers were relieved 
 from the daily task of cleaning, oiling, changing ribbons 
 and so on. These latter operations were performed by 
 boys who arrived at eight o'clock in the morning. 
 
 The adoption of a standard chair effected a consider- 
 able time-saving. One stenographer had long used a 
 swivel chair with a worn screw. The seat slipped down 
 continually and had to be screwed up perhaps forty 
 times a day. 
 
 In this office a large number of technical terms were 
 used, and new stenographers ordinarily required a long 
 time to familiarize themselves with these words. Half 
 a dozen trips to the dictionary were not unusual in 
 writing a single letter, and executives lost time during 
 dictation by the necessity for explaining terms and 
 spelling out words. This trouble was minimized by the 
 use of a sheet containing in alphabetical order all the 
 technical words in common use. One of the first duties 
 of a new stenographer was to learn how to spell and 
 pronounce these technical terms. "When an executive 
 dictated to a stenographer unfamiliar with these terms 
 he did not have to waste his time to stop and spell out 
 words, at the same time interrupting the train of his 
 thoughts; he simply referred her to this sheet. 
 
 HPRAIN yourself to like your business, to concentrate your- 
 
 A self upon it, and success mil follow as naturally as crops 
 
 follow seeding. 
 
 Edward P. Hatch 
 
 President. Lord & Taylor 
 
XVIII 
 
 CORRECT ROUTINE FOR THE 
 SALES ORDER 
 
 By William E. Wilson 
 Consulting Accountant 
 
 HANDLING a sales order after it has come into the 
 house from the sales department and aside from 
 the financial routine of sales accounting, is simply a mat- 
 ter of office routine. 
 
 With the opening of the mail, all orders received from 
 salesmen or direct from customers are placed together 
 and the first process is to enter them on a sales register. 
 This register is purely to protect against the loss of the 
 original and in order to have a basis for checking back. 
 This registration includes merely the entry of the name 
 of the customer, the amount of the order, and the date 
 of its receipt. The orders are entered on the register 
 sheet consecutively, one on each line. Every line is 
 numbered in series and the same number is placed on 
 the order. 
 
 From here they go direct to the order department, 
 where they first pass under the eye of either the man- 
 ager of the department or his assistants for "interpre- 
 tation." The entry clerks who will next receive the 
 orders are supposed to do only the mechanical work of 
 entering. First, however, you need some responsible 
 person to interpret the order, and by a system of under- 
 lining or key figures, to show what it means, so that 
 the entry clerk need not read the entire letter. 
 
178 OFFICE WORK 
 
 Mechanical development in entry work calls for the 
 making out of all records pertaining to the order at 
 writing. 
 
 Six classes of copies are required in the usual routine 
 of business: first, the office copy of an order, which 
 forms the permanent record (Form I) ; second, the copy 
 which is to go to the factory, warehouse or shipping 
 room (Form II) as instruction for gathering the arti- 
 cles; third, the acknowledgment of the order, to be sent 
 to the customer (Form III) ; fourth, the label to be sent 
 to the shipping room to be pasted on the package as 
 shipping direction (Form IV) ; fifth, a copy for the 
 files of the sales department (Form V) ; sixth, the in- 
 voice (Form VI). 
 
 According to the routine of the business, other copies 
 may be added. Those named are simply the basic copies 
 required in every business. In some offices, a copy is 
 made for the advertising department ; two or even three 
 copies are often made for the shipping room to be signed 
 as receipts by the transportation companies; charge 
 sheets to be sent to the accounting department, from 
 which it makes its entries (Form VII) ; an additional 
 copy of the invoice to be used as the ledger record in the 
 accounting department. 
 
 The two sets of invoices and charge sheets are placed 
 in a suspense order file where they remain until the goods 
 have been shipped to the customer. The original office 
 copy is sent to the correct department for approval. 
 "When it is returned approved, the various department 
 sheets are forwarded to the respective departments. By 
 this plan all departments may be employed simultan- 
 eously in filling the order. 
 
 Copies may also be made for the collection follow- 
 up system. One may be a statement, another a notice 
 
SALES RECORDS 
 
 179 
 
 to the customer of a sight draft about to be made, 
 and a third, a sight draft. These three forms are then 
 fastened together and filed chronologically in the tickler. 
 On the day they turn up in the date file, a statement is 
 mailed to the customer. The draft and the notice are 
 refiled to the next date, and so on till sent. 
 
 The acknowledgment copy is immediately sent to the 
 customer; a copy is sent to the plant, warehouse or 
 storeroom or one copy to each department if the order 
 
 SALES ORDER 
 
 ORDERS DELIVERED BY RECEIVING TO ENTRY DEPARTMENT 
 ENTRY ON ORDER REGISTER 
 
 I EXAMINED AND CHECKED 8V INTERPRETER 
 
 ACKNOWLEDGMENT SENT 
 ENTRY OF ORDER <( 
 
 I MANIFOLC 
 
 I 
 
 DISTRIBUTION 
 OF COPIES 
 
 FOLLOW-UP 
 ON ORDERS 
 
 LD COPIES MADE OUT 
 CHECKED WITH ORDER REGISTER 
 
 (1) COPT FOR PERMANENT OFFICE RECORD 
 
 <2> COPY TO STOCK ROOM OR 
 
 13 COPV FOR ACKNOWLEDGMENT 
 
 14) COPY TO SHIPPING ROOM 
 
 16) COPV TO SALES DEPARTMENT 
 
 <6> COPY FOR INVOICE 
 
 TICKLER FILE 
 BACK ORDERING 
 SUSPENSE FILE 
 
 FIGURE XIX: Sales orders follow a definite routine as soon as they 
 reach the house. This chart shows the method by which each order is pro- 
 cessed to insure proper shipment 
 
 calls for goods from different departments and from this 
 the goods are gathered, checked by the order and sent 
 from the plant, the warehouse or the different depart- 
 
180 
 
 OFFICE WORK 
 
 ments to the shipping room, accompanied by the orders. 
 In the meantime a copy of the complete order is sent 
 to the shipping department, by which the goods will 
 finally be checked and made ready for shipment. 
 
 OFFICE COPY 
 
 THEIR NO.. 
 OUR NO,__ 
 
 CUSTOMER. 
 
 ADDRESS 
 
 RCGISTCA NO.. 
 CREDIT 
 
 DESCRIPTION 
 
 PRICE EXTENSION 
 
 DEPARTMENT ORDER 
 
 STOCK ROOM COPV 
 
 COT OUT av 
 
 CHECKCDBV 
 
 PRICE MEMO 
 
 4=4 
 
 ACKNOWLEDGMENT OF ORDER 
 
 TOUR NO.. 
 OUR NO. _ 
 
 REGISTER NO. 
 
 WE ACKNOWLEDGE RECEIPT OF YOUR ORDER FOR 
 
 DESCRIPTION 
 
 SHIPPING INSTRUCTIONS 
 
 T* 
 
 VIA. 
 
 FORM I (top card}: The first copy of an order is held as the office record. 
 
 FORM II (second card}: Departmental copy. FORM III (third card): 
 
 Acknowledgment of order. FORM IV (bottom card}: Shipping label 
 
 The copy which serves as the label is placed on the 
 package and it is then sent out to the customer. If the 
 copies include shipping receipts, these have gone to the 
 
SALES RECORDS 
 
 181 
 
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182 
 
 OFFICE WORK 
 
 shipping room with the first copy and label, so that the 
 proper receipts are taken from the transportation com- 
 pany. All the copies are then sent back to the office. 
 One copy is now sent to the sales department to go into 
 
 < 
 1 
 
 SALES DEPARTM ENT COPY 
 
 OHOIB MO. . .._, . 
 
 GOT OUT BT 
 
 
 CHECKED BY 
 
 XXX [ a o U o7o T uV | *" T ' CL " 1 V' || " 
 
 INVOICE 
 
 LOATE or IN void i j - o AT t or ORDER 
 OTO YOU* NO 
 
 n 
 
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 omN . j aun NO 
 
 TATC ,, . INWOICC NO 
 
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 CAR NO 
 
 
 ORDERED) 
 
 
 DESCRIPTION 
 
 PNICK EXTENSION 
 
 TOTAL 
 
 
 CUSTOMER 
 
 CHARGE RECORD 
 
 RlrtRINCt 
 
 LCOOCN 
 
 CREDIT* BALANCE 
 
 
 
 BOOMS* 
 
 
 ,,. * , 
 
 
 
 
 
 QUANTITY 
 ORDERED 
 
 QUANTITY 
 
 SHIPPED 
 
 DCSCRIPTION 
 
 PRICE EXTENSION 
 
 TOTAL 
 
 
 
 
 
 
 
 FORM V (top card): Copy filed by the sales department. FORM VI 
 
 (second card): The invoice sent to the purchaser. FORM VII (bottom 
 
 card): Copy sent to accounting department as a charge record 
 
 its records, one copy is kept in the office* and filed with 
 the permanent correspondence on the sale. 
 
 One copy has also been held in the order department 
 
SALES RECORDS 183 
 
 awaiting the shipping report. Against this the shipping 
 copy or report is now checked to be sure that all goods 
 have been shipped. After all the goods have been shipped, 
 the copy which serves as the bill and which has been held 
 in the order department is sent with the office copy 
 into the accounting department. 
 
 A further duty of the order department is to follow 
 up orders to see that they are shipped on time, and 
 correctly. In a business where prompt shipment is es- 
 sential, a date is usually specified on the order. In that 
 case, the copy which is held in the order department is 
 put into a tickler file under the date on which ship- 
 ment is to take place or when the shipping copy is sup- 
 posed to come back with the information that the goods 
 ordered have been sent out.. Every morning these copies 
 are taken out for follow-up. 
 
 When shipment is made, three copies of the shipping 
 receipt or bill of lading are drawn up by the shipper 
 and the agent of the railroad company. The original 
 receipt (Form VIII) is retained as a sales record. The 
 bill of lading is described at further length in the next 
 chapter. 
 
 HPHERE is probably no other single word in the language 
 
 that better describes success than "system" The larger 
 
 the business, the better must be the system by which it is 
 
 conducted; yet whatever its size, system is the essential factor. 
 
 Leon Mandel 
 
 Mandel Brothers 
 
XIX 
 
 KEEPING RECORD OF GOODS 
 RECEIVED AND SHIPPED 
 
 By Charles E. Cake 
 
 fTlHE traffic department not only has charge of the 
 *. delivery of any product to customers, but it also 
 concerns itself with in-freight shipments coming to the 
 production division of the business. Various causes have 
 contributed to the present importance of the traffic de- 
 partment in business enterprises, the most prominent of 
 which are: first, the interstate commerce legislation, 
 which places upon all merchants and manufacturers the 
 burden of ascertaining for themselves the proper rates 
 for transporting freight; second, the tendency of all 
 business to extend the limits of their selling fields, and 
 the consequent need of equalizing the difference in 
 freight charges between these and more favorably sit- 
 uated shipping centers. 
 
 It is the function of the traffic man to look after 
 the routing of freight when routing is necessary to 
 insure a low rate. He defines the manner in which goods 
 shall be packed, and frequently upon this is determined 
 the rate which shall be applied. It is his business to see 
 that shipments are promptly delivered and to trace 
 them when they are delayed ; to check the freight expense 
 and to handle claims effectively at low costs. Many of 
 the claims which are presented are sidetracked and lost. 
 The man who does not adopt a system in the handling 
 
TRAFFIC RECORDS 185 
 
 of his claims and other details which belong to the traf- 
 fic department is sure to lose money. Shipments which 
 have been lost or miscarried, unless traced and returned 
 to the shipper or delivered to the consignee will be sold 
 at some point for charge. 
 
 ORGANIZATION of the traffic department on cor- 
 rect lines requires record-keeping on every item 
 received and sent, with the giving and taking of receipts. 
 
 The information which the traffic manager must put 
 on record includes the freight classification of his line 
 of goods to different territories ; the rates from his own 
 and competitive shipping points to destination; the 
 switching rates; the routing of shipments; the tracing* 
 of shipments; the filing of claims; the record of claims;, 
 the record of freight charges; the payment of freight 
 charges, and the filing of tariffs. 
 
 The organization has two parts: the in-freight, 
 division and the out-freight division. The system of 
 the department must be thorough, covering every detail ; 
 if it is not, the organization fails in its duty as guardian. 
 
 The traffic department's connection with in-freight 
 begins the moment the purchasing department places- 
 an order, when notice is sent telling the name of the 
 house from which goods have been purchased and date 
 expected. 
 
 If the goods fail to arrive promptly, an "overdue"" 
 freight notice is sent to the railroad by the traffic de- 
 partment. If the shipment is not forthcoming, the 
 claim department goes through the same procedure as- 
 in case of an out-freight loss, which is described later. 
 
 When the freight arrives, the railroad mails the usual 
 " freight notice" direct to the traffic department. This 
 is the first information the house has that its expected 
 
186 
 
 OFFICE WORK 
 
 freight has arrived. The traffic department enters this 
 notice in its record of freight notices and expense bills. 
 After the notice has been copied, an order blank (Form 
 
 WORKOFTHE 
 
 TRAFFK: 
 DEPARTMENT 
 
 IN-FREIGHT < 
 
 {NOTIFICATION Of PURC 
 DIRECTIONS 6CNT TO S 
 FOLL.OWING-UP OP BHI 
 
 CHASE 
 
 DIRECTIONS 6CNT TO SNIPPER 
 IPMCNT 
 
 NOTICE FROM PURCHASING AQSCJT 
 NOTICE FROM RAILROAD. 
 OELIVERV 
 
 RECORDING 
 
 NANOLINO CLAIMS 
 
 ISEE 6ELOW> 
 
 OUT-FREIGHT* 
 
 FICATION OF SHIPMENT TO 8C MADE 
 
 DECISION A3 TO ROUTE 
 
 TAK.NQ 
 RECEIPTS 
 
 HANDUNO 
 CLAIMS 
 
 {NOTIFI 
 DECISI 
 
 { 
 
 '<>* RAILROAD 
 
 pRO|J OU$TOMW| 
 
 | CLAIM RECORD FOR FILE* 
 I DUPLICATE FOR RAILROAD 
 ] CHECKING WITH sroCM 
 ^ FOLLOW- V*. 
 
 FIGURE XX: The traffic department is an important part of the office 
 
 and the proper routine of its work, illustrated in this chart, is essential to 
 
 the prompt delivery and the satisfactory receiving of goods 
 
 I) is filled out, serving primarily as a notice to the rail- 
 road company that the house desires freight as per 
 notice. The teamster presents this at the proper door of 
 
TRAFFIC RECORDS 
 
 187 
 
 
 
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 DATED. 
 
 
 
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188 OFFICE WORK 
 
 the freight house, where he receives the goods called for. 
 
 Good management requires that the teamster never 
 go to the freight house with an empty wagon. When he 
 is to bring goods for any department, the traffic depart- 
 ment inquires of that department whether it has any out- 
 shipment; the manager of that department looks over 
 his out-shipments and delivers to the teamster any goods 
 he may have to ship. The traffic department "back 
 freights," in other words, reducing the delivery expense 
 about one-half. 
 
 The teamster, having picked up the articles enumer- 
 ated in the freight notice, takes from the railroad com- 
 pany the "expense bill," which is in every part a du- 
 plicate of the freight notice, and reports back to his 
 house and delivers th^ goods to the department for 
 which the articles are intended. 
 
 The manager of this department then checks on the 
 expense bill the goods intended for him. The other 
 departments for which there may be articles in the ship- 
 ment do likewise, until the full list has been checked. 
 Then the teamster reports the expense bill back to the 
 traffic department. Upon comparison with the freight 
 notice the traffic department knows that the shipment 
 has been received in its entirety! If there is a shortage 
 or breakage, the traffic department proceeds under the 
 rules for "claims and damages." 
 
 As in-freight is received and checked in the store- 
 room it is entered on a freight record (Form II) in the 
 traffic department. This shows every bill of goods for 
 which there must appear in the "freight notices" file a 
 corresponding account. The two must be alike in the 
 number of articles, the weight, the freight and the team. 
 The keeping of the original freight notice further serves 
 as a check on the railroad. 
 
TRAFFIC RECORDS 189 
 
 The standard form of bill of lading in use by the 
 railroads throughout the United States is one approved 
 by the Interstate Commerce Commission. There are two- 
 forms. One is known as the straight bill of lading and 
 is not negotiable. The other is an order bill of lading 
 and is negotiable. Both forms consist of three parts, 
 which are, in fact, shipping receipts. The sheets dif- 
 fer only in name and signature. The top sheet, known 
 as the original copy, is kept by the shipper as a receipt 
 from the railroad. It is signed by the shipper and the 
 agent for the railroad. The second sheet is the ship- 
 ping order, and is signed only by the shipper and is 
 held by the railroad as its receipt. The third sheet is- 
 a memorandum, signed by the shipper and agent, and 
 intended to be sent to the customer, or kept by the shipper. 
 
 Standard bills of lading may vary in size, and may 
 contain printing matter in addition to that prescribed 
 by the Interstate Commerce Commission, but there must 
 not be any conflict of statement. 
 
 All railroads provide forms of the approved bill of 
 lading for the use of their shippers. Instead of using- 
 these, however, many shippers print their own bills in 
 standard form in a size that conforms to their perma- 
 nent office records and suitable for filing. 
 
 Original receipts are filed undeif date, each 1 month 
 kept separately; and if a receipt is taken from the files. 
 for any purpose, an exact copy is put in its place, 
 marked " duplicate. " When a shipper retains the 
 memorandum, it is filed with the original, and serves, 
 as a "duplicate." A purchaser receiving the memo- 
 randum sheet in addition to the usual invoice, can save 
 the work of preparing a teamster's list of the articles- 
 shipped by attaching the sheet to the delivery order 
 given him when he is sent to the freight house. 
 
190 
 
 OFFICE WORK 
 
 The record for all freight paid is arranged so that each 
 road's freight is kept separately. This puts the house 
 in a position to know what business each road gets and 
 what service it gives; also furnishing the simplest 
 plan for locating the amount of freight paid on a par- 
 ticular shipment. Again, the original freight notice, the 
 record of freight received and the record of freight paid 
 must conform. 
 
 
 
 R. R. CO. 
 
 YOUR NO, 
 
 on. TO KELLY, MAUS & CO. INC. 
 
 CHICAGO 
 
 
 
 ON SHIPMENT 
 
 WGT. 1AMT. 
 
 AMT.'OF 
 
 AMT. 
 
 DATE 
 
 FROM 
 
 
 
 
 
 TO 
 
 WHEN PAID CREDIT 
 
 
 
 
 BILL LADING DATED 
 
 
 
 
 
 CONSIGNOR 
 
 
 
 
 
 CONSIGNEE 
 
 SUNDRY LOSSES 
 
 
 
 
 PACK. NO W.C. NO. 
 
 
 
 
 
 DATE 
 
 
 
 
 
 CAR NO. 
 
 * 
 
 
 
 
 COVERED BY 
 
 
 
 
 
 EXPENSE BILL NO. 
 
 
 
 
 
 DATE 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 PAPERS TO 
 
 REMARKS 
 
 
 
 
 
 
 
 KELLY, MAUS A CO. 
 
 
 BV 
 
 FORM HI: A claim record is filled out when a shortage in freight occurs. 
 It is filed with the railroad company instead of the original freight receipt 
 
 The traffic department pays freight bills weekly. The 
 expense bill has been found correct from checking with 
 the freight notice. The traffic department has then only 
 to make out its "cashier's voucher" and the amount is 
 forwarded to the railroad company. 
 
TRAFFIC RECORDS 191 
 
 The connection of the traffic department with out- 
 freight shipments from the house to its customers comes 
 after the sales order has gone through all the other 
 departments; after it has been recorded by the entry 
 clerk, and approved by the price man and credit man- 
 ager. 
 
 Thus approved, the order comes to the traffic depart- 
 ment. The shipping clerk of this department imme- 
 diately routes and checks the order. It is then sent to 
 the department having the articles called for, a separate 
 order for the shipping clerk accompanying it. 
 
 Many shippers make a practice of printing on! the 
 three sheets of the bill of lading a complete list of all 
 the articles freighted at any time by the shipper. The 
 number of articles (or boxes or packages) may then 
 be indicated quickly in a blank column at the edge of 
 the list. As many as a thousand items are often printed 
 in columns. Accuracy requires that a wide space be 
 left between the items to prevent a figure appearing 
 in front of the wrong item on the shipping order and 
 the memorandum. This frequently happens when the 
 items are printed in small type and the carbon paper 
 and sheets slip. If large type is used, it is necessary to 
 decrease the number of items or the sheets will be too 
 large for convenient handling. 
 
 1/iOLLOW-UP to secure action on claims for goods 
 A lost en route or damaged is an important duty of 
 the traffic department correct routine to follow. 
 
 If the house is unable to fill the order entirely, goods 
 out of stock are reported to the traffic department. The 
 items are entered on a separate slip and the customer 
 notified. 
 
 If this shipment is lost, a claim is entered against the 
 
192 OFFICE WORK 
 
 railway in an accurate and unanswerable way. 
 
 Instead of filing an original freight receipt bill with 
 the railroad company, a "claim record" (Form III) 
 is filled out, the original of which is kept for the house 
 files, and a carbon sent to the railroad company. The 
 claim is made out from the original of the bill of lading, 
 and in accord with the conditions printed on the back of 
 the bill. The chances of the claim being adjusted on 
 any except a satisfactory basis are small, as no claim 
 of shortage will hold against the original receipt in 
 possession of the company, and which has been signed 
 by the agent for the railroad. 
 
 In tracing shipments the receipt is never surrendered 
 to the railroad company. The railroad agent is sent a 
 statement of the shipment as shown by the bill of 
 lading. In case of loss or damage the receipt is at- 
 tached to claim papers. It often becomes advisable for 
 the house to institute a tracing itself and not leave 
 the matter entirely to the. railroad. This is done to 
 expedite the tracing, and show the customer that the 
 house has an interest in his welfare. No forms are used 
 for this separate tracing. If the shipment was made 
 from Chicago to some point in Ohio by the way of Cin- 
 cinnati, a letter is written to the company in Chicago, 
 the connecting line in Cincinnati, and the agent at the 
 destination. 
 
 TN THE game of business as in the game on the diamond, 
 it is the man who keeps score on results who follows most 
 closely the progress and the profits of his work. 
 
 John T. Wolff 
 
 L. Wolff Manufacturing Company 
 
XX 
 
 OFFICE SHORT CUTS AND 
 ECONOMIES 
 
 By Wesley A. Stanger 
 Formerly Sales Manager, Royal Typewriter Company, Chicago Branch 
 
 JUST because the loss in an individual instance is 
 small, most managers let little items of office waste 
 go unchecked. They forget that a one-tenth of a cent 
 leak contributed to three times a day by one hundred 
 employees, means a loss at the end of the year of one 
 hundred dollars. Any business man would drop his 
 work and institute a rapid search if you told him that 
 a hundred-dollar bill had been dropped out of his cash 
 drawer into the sweepings. But just because this hun- 
 dred dollars is dropping out in driblets of one-tenth of 
 a cent he lets it pass, even though the stopping of the 
 leak is easy. 
 
 A cashier in a firm that maintained a number of dif- 
 ferent departments made a practice of entering the 
 amounts coming from each department in a separate and 
 distinct column in his cashbook. There were twenty 
 of these columns; each column represented a depart- 
 ment. They occupied four pages a day. He was, there- 
 fore, obliged to add up each column and carry the total 
 over on the next page, which meant eighty operations. 
 
 An expedient for eliminating these eighty operations 
 was suggested to him, which by its very simplicity had 
 not before occurred to him. The plan was to cut oS 
 an inch alternately from the top and from the bottom 
 
194 OFFICE WORK 
 
 of each page, thus leaving the total always in sight 
 when a page was turned. The time saved by this scheme, 
 while considerable in itself, was dwarfed in importance 
 when the errors avoided by the abolition of transcribing 
 were considered. 
 
 How many dollars' worth of pins did you buy for 
 your office last year? 
 
 You don't know. Neither did 'Jackson, the head of a 
 business with an office force of a couple of hundred 
 people. 
 
 But one day he came quietly round a corner of the 
 office and found two messenger boys pelting each other 
 with pins bought with his money. Then he investi- 
 gated. 
 
 He found that he was buying pins in quarter pound 
 boxes. When a requisition went down from any one 
 of his several hundred employees to the stationer it was 
 for "one box of pins," and that is the way the order 
 was filled. Every desk had a box of pins on or near it 
 and they were usually scattered everywhere. The actual 
 amount of money spent for pins ran into many dollars 
 at the end of the year. If cost could be reduced here 
 it was quite as important as figuring out how sheet 
 metal could be cut to make twenty-one burrs instead 
 of nineteen. 
 
 This analytical business man found that the waste oc- 
 curred as the result of too great an abundance of pins. 
 The solution was to reduce the number issued at each 
 call and to urge economy in using them. 
 
 Why not have a private brand of pins ? It would call 
 pins to the employees' attention. It would make an ex- 
 cuse for preaching economy. It would impress the firm 
 on their minds. 
 
 "How much will 1,000 small boxes like this cost with 
 
SHORT CUTS AND ECONOMIES 195 
 
 our label on the top?" he asked his buyer. 
 
 The box was a small slide affair similar to what is 
 generally used for paper clips. In quantities it would 
 cost considerably under a cent, label and all. So the 
 following instructions were given. 
 
 "Hereafter buy pins in 100-pound lots, in bulk. If 
 you use several sizes, cut it down to one average size. 
 In this way you are sure to save in the buying. Have 
 1,000 of these boxes made up and have this label pasted 
 on each of them 
 
 VERIBEST PINS 
 
 Put up especially for 
 
 WILKINSON & COMPANY 
 
 These pins are put up especially for this firm 
 under our private brand. Employees are urged 
 to keep them in the box and not scatter them 
 about desks or floor. This box contains 250 
 brass nickeled pins. Everything this firm uses 
 or sells is the best obtainable. DO YOUR 
 PART TO KEEP IT SO. 
 
 The boxes were filled by weight. Two hundred and 
 fifty pins were counted for the first weighing ; after that 
 the office boys weighed them out and filled the boxes at 
 odd moments. Only one box was issued at a time ; the 
 requisitioner always had to bring the old box with him; 
 and the stock clerk jotted down on the back of the box 
 the date issued so that when it came back to be filled 
 he could see how long the previous 250 had lasted. The 
 pin expense of this office was cut down nearly two- 
 thirds. 
 
 One of the largest wholesale dry goods and general 
 
196 OFFICE WORK 
 
 merchandise concerns in the country, using talking ma- 
 chines for correspondence dictation exclusively, has 
 found a subsidiary saving in addition to the recognized 
 advantages. 
 
 After a test of the machines the managers of cor- 
 respondence found that the average letter contained 
 100 words or thereabout, and that often only two or 
 three letters were dictated on one wax record which was 
 made to accommodate 1,500 words of ordinary dictation. 
 This meant a considerable loss, for the entire cylinder 
 had to be shaved to remove 100 words, trimming it down 
 as much as in removing 1,500 words. 
 
 Here was an opportunity. Buying records in quan- 
 tities of 5,000 at a time, he figured that a loss of seven- 
 ty-five per cent of wax ran into dollars in the course of 
 a year. He sent out orders to have all records cut into 
 smaller sizes, and instructed correspondents to use the 
 size of cylinder that would accommodate the dictation 
 they desired to give. Thus a 100-word letter went on a 
 record cut into thirds. If a man was going to dictate 
 a string of letters he used full sized records. Before 
 long the system was in general use throughout the var- 
 ious departments and over $500 was saved the next year 
 in the cost of wax records. 
 
 The manager of an office force of two hundred got 
 a practical idea from watching the water boy who 
 kept a gang of street railway laborers supplied with 
 drink one morning while his car was temporarily stalled. 
 
 When he reached his office he gave instructions to the 
 switchboard girl to keep tab on the number of times 
 employees resorted to the fountain for a drink. He 
 found that the number of trips was about seven hun- 
 dred and fifty. 
 
 Holding his watch to determine the average time 
 
SHORT CUTS AND ECONOMIES 197 
 
 consumed, he learned that the average was about three 
 minutes for each drink. Without figuring the time lost 
 in settling down to work again, he saw that thirty-seven 
 hours each day were given to this unproductive proc- 
 ess. 
 
 The street railway water boy had suggested a real 
 saving. 
 
 When his five-dollar water boy started to make the 
 rounds the next day, many of the employees thought it 
 was a pleasant innovation to have their drinks delivered. 
 Few realized that the water boy was saving almost the 
 -equivalent of the office manager's salary for his firm. 
 
 " Write on one side of the paper only," was formerly 
 the rule generally given out wherever letters were writ- 
 ten. But with the advent of the writing machine it 
 became a general practice and the legend was no longer 
 necessary. 
 
 However, like all rules, there are exceptions to it. 
 Here is one of them : 
 
 When you make a carbon copy of a letter, write on 
 one side of the letter only, but on both sides of the sec- 
 ond sheet. This not only saves paper, but also places 
 all of the record you want to keep on one sheet of paper 
 where you can get it all together. Your files are for 
 your private use, not for outsiders; and when you go 
 to them to find a letter to John Douglas, it is exasperat- 
 ing to find the first sheet of the carbon copy but no 
 trace of the second. 
 
 Pens, so the stationer of one large corporation found 
 out, were consumed in his offices at the rate of ten boxes 
 a month. A box of pens contains a gross; thus, in a 
 year, the office consumed almost a "great gross" of 
 pens. He also found that it was carrying an immense 
 variety of pens. Every clerk was furnished with his own 
 
198 OFFICE WORK 
 
 preferred style, and every requisition read "one box of 
 so-and-so pens." 
 
 The stationer determined to reduce the pen expense. 
 He sent little slips to each clerk asking for information 
 regarding the pens he preferred, the life of a pen and 
 the use to which he put them. The slip he used was as 
 follows : 
 
 PEN CENSUS 
 
 Please note below your preference of pens, how 
 many you use and what your second choice is. 
 This information is requested in order to aid the 
 purchasing department in making contracts for 
 the coming year. 
 
 Style Number 
 
 Fine Medium Coarse 
 
 Pens on hand 
 
 Second choice 
 
 Why do you prefer first named pen ? 
 
 Please fill in immediately and hand to mailing 
 clerk. 
 
 The result of this "census" was that a big supply of 
 pens of all sorts was found to be in the possession of 
 employees. He found that the majority of writers pre- 
 ferred a certain pen, that the second choice showed but 
 little deviation from this variety and that "freak" re- 
 quests were almost negligible. Users also changed often, 
 and he had bought gross after gross of pens merely to 
 satisfy a few personal whims of the clerks. 
 
 He sent a boy through every department with an 
 order for all pens that were not in actual use. As a 
 result he had a sufficient supply of "freak" pens to 
 last the rest of his life, and at the same time had aug- 
 mented the stock of goods regularly used. 
 
SHORT CUTS AND ECONOMIES 195 
 
 "With this information concerning the pens used dur- 
 ing the year, and with the supply that he had collected 
 and the statement of the choice of the users, he had a 
 basis upon which to estimate his purchases. He ordered 
 a sufficient quantity of the styles most demanded, and 
 none of the freak varieties. His orders for pens were 
 thenceforth cut down two-thirds. 
 
 He then secured small envelopes similar to "pay en- 
 velopes" and printed up a quantity of them as follows: 
 
 This envelope contains six Penman Number 1 
 steel pens. These pens are carefully selected and 
 should any of them prove defective, the user is 
 requested to report it to the stationer. 
 
 On other envelopes he printed blank lines in which 
 the style, number and grades of pens could be filled. 
 These were for miscellaneous pens, which were rarely 
 called for. 
 
 At the end of the year, he still had a large supply of 
 pens on hand and had not been called upon to buy more 
 than 35 per cent of the previous year's demands. Pens 
 were 60 cents a gross. He had been spending $72.00 a 
 year. By this system he cut it down to $25.50. 
 
 The envelopes and printing for the pens most used 
 (1,000 envelopes) cost $1.10; the 500 envelopes printed 
 for miscellaneous pens cost 85- cents. The slips for the 
 "census" cost only the time of the office boy, for the 
 work was done on the office duplicator. Thus he charged 
 $1.95 to expense for inaugurating the scheme and 
 saved $46.70 on the first year's pen bill. 
 
 Few managers have given the matter of rubber bands 
 more than a passing thought. In every business house 
 they actually cut a big figure. Pounds and pounds of 
 
200 OFFICE WORK 
 
 them are shot away by office boys, other pounds are car- 
 ried home, and still more pounds find their way to the 
 waste basket, while untold numbers of them are used 
 unnecessarily because clerks will put half a dozen bands 
 around a package where one is sufficient. Within the 
 past few years the price of rubber has gone up by 
 leaps and bounds. 
 
 Recently a buyer for a firm using quantities of rub- 
 ber bands sought to reduce the cost and began by adopt- 
 ing a scheme similar to the one used by the man who 
 saved money on pins. Small assortments were placed in 
 small boxes and the bands were issued in that manner, 
 cutting down the waste of them several hundred per 
 cent. 
 
 He also tried out a gum tape machine for packages not 
 suited for fastening with rubber bands, and found that 
 the original cost of installing the machine equipped with 
 a mile or so of tape equalled about two pounds of rub- 
 ber bands; so the machine became permanent. Now the 
 firm uses gum tape machines for all packages going out 
 of the office and for all papers to be stored in the office. 
 
 Similarly all labor and equipment processes in the 
 modern office are open to challenge and subject to econo- 
 my for the shrewd office manager. Simple, standard, di- 
 rect effort makes for more work, easily done and at low 
 cost. 
 
 T TSUALLY when a man falls short of success, the trouble 
 ^ lies in some specific direction; it may be bad judgment 
 in buying; it may be poor selling methods; it may be im- 
 proper handling of people. Whatever the fault, I believe 
 men could educate themselves out of it, if they really resolved 
 to do so and went about it intelligently. 
 
 C. D. Peacock 
 
 Of C. D. Peacock 
 
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