Transcriber’s Note: This book has two Figure 13s, but no Figure 29. Illustrations described as “actual size” are unlikely to be actual size, as the size is dependent on the device you’re reading this on.

Post Exchange Methods

by
CAPTAIN PAUL D. BUNKER
UNITED STATES ARMY

A manual for Exchange Stewards, Exchange Officers, Members of Exchange Councils Commanding Officers, being an exposition of a simple and efficient system of accounting which is applicable to large and to small Exchanges alike.

General Agents
The Eagle Press Service Printers
Portland, Me.

Copyright 1915
The Eagle Press—Portland, Me.
All rights Reserved

PREFACE.

Our Post Exchanges are usually in charge of officers with little or no experience in book-keeping, their assistants are usually enlisted men and not professional clerks and accountants, and there is, at present, no codified or standard system prescribed for handling this business. Some parts of the Post Exchange Regulations have become antiquated through the developments of modern business methods such as the “Voucher Check System”.

In view of these facts it is felt that there is a real need of this book, and it is hoped that the methods herein set forth will prove to be a step toward a uniform system that will be adopted in all Exchanges, one that will reduce overhead charges, eliminate unnecessary labor and improve unsatisfactory profits.

The writer intended discussing several other important points, such as Journal Entries, Mail Order Business, Consignment, Adding Machines, Loose-leaf and Card Index Filing, etc., but circumstances over which he had no control prevent, at present, any addition to these pages.

It is desired to give credit to Captain Henry M. Dichmann 24th Infantry, who by his work in connection with the Post Exchange at Fort Slocum, N. Y., was the inspiration for this work, and to Mr. James Parker, Cashier of the same Exchange, for valuable assistance rendered.

PAUL D. BUNKER,
Captain, Coast Artillery Corps.

Fort Hancock, N. J., June 7, 1915.

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TABLE OF CONTENTS.

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POST EXCHANGE METHODS.

The general methods of conducting a Post Exchange are laid down in official orders and considering the categorical nature of these orders it would seem that the systems in all Exchanges should be almost identical. Such, however, is far from the truth, as there are almost as many systems as there are Exchanges, and a person in charge of one Exchange might have to learn considerable new matter before he would be able to administer the affairs of another Exchange. This variety of systems also causes trouble to auditing officers, exchange councils and to inspectors when they have occasion to go over the books. Some of the systems are unsound in minor particulars, and most of them are poorly designed. All trouble of this nature could be avoided by devising a standard system and installing it in all Exchanges. The advantages of such a proceeding would be manifold and there would be no important disadvantages. In this essay an attempt has been made to evolve such a system, one applicable to any Exchange, representing the best points of many Exchanges and including at all possible points the labor saving results of modern methods. The system here described is not the embodiment of theory alone, but has been through the test of actual trial and has given thorough satisfaction.

In devising any such scheme we must presuppose certain desiderata:—

1. The Exchange Officer can spend but a small portion of his time in the Exchange, and yet he must have accurate knowledge of what the business is doing. It is therefore essential that our records shall show accurately and concisely all the data that are necessary to a full understanding of the condition and operations of the business.

2. It is not enough to have a system which will enable us to render a clear statement at the end of the month, we should be able to close our books at any time and get out our financial statement in the minimum time.

3. Our system should be such as to minimize the possibilities of peculation. It is often said that there is no system which cannot be beaten, but there are systems which cannot be defeated for any great length of time. Therefore, our system must reduce to a minimum the time during which graft or theft can work undisturbed.

4. The system must be so simple that it will not require exceptional ability at any point in order that its provisions may properly be carried out. This makes it easy to break in new clerks, and enables them to perform their duties in a more satisfactory manner.

5. The system must not be so cumbersome that it will delay the making of sales. This is highly important. Every reader of this will undoubtedly have vivid recollections of his experiences in department stores, “waiting for change.” It is better to lose a dollar than to disgust our customers and drive them elsewhere.

The above requirements cannot but cause our system to be somewhat more expensive than that used in a “one-man store”. In the latter instance, as a proprietor will not cheat himself, the third requirement has, in general, no effect. The other requirements, however, will still hold, and even gain in importance. How many merchants have we seen who thought they knew all about their business, but who in reality knew very little. They did not even realize that slipshod methods curtail credit and beget losses of various sorts.

In describing this system we shall take up the various features in the order in which they will be found easiest to install. For instance, charge sales are discussed first because, regardless of the system of handling these sales that may be in use by any Exchange, it will be found that to change to the system here described, before changing any other part of the system, will cause no confusion in the other books. In other words, if your system be changed according to the order in which the different parts are discussed herein, you will find that you have gradually installed a system which may be entirely different, yet you have caused no confusion in your books by the transition.

CHARGE SALES.

General.

This item includes the sale of merchandise to (1) officers, (2) civilians, (3) enlisted men authorized to buy on credit. Such sales are practically cash, being paid, usually, within a very short time.

The practice of extending credit to civilians is not encouraged by the authorities and the Exchange Officer should secure permission beforehand in case it is desired to transact this kind of business. In some cases of isolated posts it is to the best interest of the government that civilians employed or living on the post be allowed credit at the Exchange, as it might otherwise be impossible for the Government to retain their services or for the civilians to subsist themselves. It is to take care of such cases that this feature is mentioned. In opening a charge account with a civilian, care must be exercised to prevent a probability of loss to the Exchange, as one bad account might wipe out the profits from all such accounts for a considerable time. If a civilian is deserving of the privilege of purchasing at the Exchange he should have no objection to conferring with the Post Exchange Officer and making satisfactory arrangements with his employer.

With enlisted men, the case is more difficult. In general, the soldier makes his credit purchases by means of coupons. But if the Exchange handles some such proposition as an ice delivery route, it is impossible to do business with the patrons thereof by means of coupons of the ordinary kind. The right method is to apply to the proper authorities for permission to extend to married soldiers credit to such amounts as may be recommended by their organization commanders. If this is not done, and credit other than in the shape of coupons is allowed enlisted men or if coupons or credit in excess of one-third of the man’s pay be allowed him, the inspector will object to it, as either of these two proceedings is held to be unauthorized. However, when there are no other stores in the vicinity, it seems but reasonable to think that the Post Exchange, instituted purely for the benefit of the enlisted man, should be allowed to extend credit to such married soldiers of good reputation as may be dependent upon it (and the Commissary) for the necessities of life. As the married soldier is usually a non-commissioned officer of long and honorable service (sometimes a first sergeant or non-commissioned staff officer) with one or more children; as the bulk of his pay is usually spent for articles ordinarily carried in stock by the Exchange; as the Exchange is the result of beneficent legislation and the regulations concerning same should therefore be interpreted in a liberal manner, it follows that there is a great deal of justice behind a proper application for permission to make charge sales to such selected men.

In case such permission is obtained, request should be made on the various organization commanders to write a letter of the following purport:—

Fort Jay, N. Y., Mar. 1, 1914.

From C. O., Co. H, 57th Inf.
To Post Exchange Officer.
Subject, Credit to Enlisted Men.

1. Request that the following named members of this organization be given credit at the Post Exchange not to exceed the amount set opposite their respective names:

...

(Sgd.) T. R. Jones,
Capt. 57th Inf.

Method of Making Charge Sales.

At the time each charge sale is made, the clerk notes the transaction on a “Charge Sales Slip,” provided for the purpose, noting the date, name of customer, name and number of articles sold, the total price of each item, the total amount covered by the slip and the initials of the salesmen. See Fig. 1.

Figure 1, (Reduced in size)

It has become almost a rule that the purchaser shall receive a copy of this record of sale. Sometimes, he does not receive it until after he has paid his bill at the end of the month, a procedure followed in many clubs and similar organizations. It is probably better in Post Exchange work to furnish the purchaser with a copy of the charge sales slip at the time the purchase is made, as most of our customers wish to keep track of their accounts and also, as will be shown later, this method may be made to promote honesty in salesmen who might be tempted to be otherwise. As it is, of course, essential that we retain at least one copy of this sales slip, it follows that the use of some sort of manifolding device is necessary. There are many such devices on the market, among which may be mentioned as representative, the manifolding sales book and the autographic register. The former is shown in Fig. 2 and the latter in Fig. 3, from which their methods of operation are apparent.

Figure 2.

It is patent that some such scheme should be adopted for use in every Exchange, no matter how small that Exchange may be. The advantages of any of these systems (even a simple duplicating pad) over the painful and inefficient method of recording all such sales in an old fashioned sales record book must be evident to every one. The particular system adopted is of minor importance so long as it is thoroughly adapted to the circumstances of the case involved. The following table is arranged for the purpose of permitting a comparison of two systems; one involving the use of manifolding sales books and the other using an autographic register.

Figure 3.

[1] Carbon paper is either single or double faced. By using the latter between two sales slips it is evident that we record our sale on the first and second slips and also secure a reversed copy on the back of the original. It is said that salesmen who alter such slips for their own gain are prone to forget or overlook this point and are caught thereby. No alteration on a sales slip should be tolerated; if the clerk makes a mistake he should be required to cancel and preserve all copies of the erroneous slip and to make out a new one correctly.

It is seen that the advantages and disadvantages of these two systems nearly counterbalance and that the particular system adopted must depend greatly upon the opinions of those in charge of the Exchange. In the following description, the use of triplicating records will be assumed.

In order to facilitate the assorting of the slips handed in by the various “Departments” of the Exchange, it is a good idea to assign distinctive colors to the original charge sales slips of each. (Of course, if there is a very large number of departments, this idea would have to be applied with discretion, as it is hard to recognize certain colors at night by artificial light.) For example, let the original sales slips used in the store be white; those in the market, buff; those in the shoe shop, pink, etc. The duplicate slips should have their own distinctive color and this color should be the same for all departments. If a triplicate slip is used, it should be of still another color and the same for all departments. Following out this scheme, the utility of which will appear presently, a color scheme might be as follows:—

If a system of distinctive colors similar to the above is not adopted, one of two things will be necessary in order that we may identify the slips of each department, unless we wish to do so by wasting the time in deciphering the articles on each slip and decide therefrom the name of the responsible department; we must either have the names of the departments printed on their respective slips when they are made, or these names must be marked on the slips when the sales are made. Neither of these methods is as efficient as that involving the use of various colors, which tells automatically to what department that slip belongs. By using distinctive colors, the printer would set up only one form for printing our whole assortment, and our printing bill would be correspondingly reduced.

In this connection, it might be stated for the benefit of the uninitiated that ordinarily the principal items in our bills for printing, especially in the case of blank forms, will be found to consist of the cost of “composition”, “make-up”, “lock-up”, and “make-ready”. These operations are necessary if but one form is printed; they need cost us no more if 50,000 copies are printed. Paper is comparatively cheap, so it usually costs us little more to print 5,000 copies than to print 1,000. So we can see that in the case of blank forms the cost per unit varies inversely as the quantity ordered at one time. Hence, if we need such forms as sales slips, of which we may use hundreds per day, we should order, say, a year’s supply at a time. Other forms or sheets that are used once a week or once a month must be ordered in lots sufficient to last for a longer time. As we take these up on our Stock Record, such purchases in large quantities will not disturb the worth of the Exchange.

An appreciable amount in the cost of our printing can be saved by a skillful arrangement of the matter on the form. An experienced man can sometimes draft a form so that the charges for printing it will be half what it would cost to print the same form arranged by a thoughtless or inexperienced person. Tabular work costs money, and so also does “special rulings”. Experience or consultation with a practical printer is the only real guide in this matter.

If any form is used in large numbers, it will pay to have electrotypes made, and “repeat orders” printed therefrom. Forms that are seldom used should not be electrotyped, as they will probably require some alteration by the time a new supply is needed. An electrotype costs about $0.25 for the first square inch and about $0.04 for each additional square inch. Here is another opportunity for the exercise of judgment. Suppose we have a large form with printed heading and footing, but nothing in the middle of the sheet; it would be wasteful to electrotype the whole form, only the heading and the footing should be so treated. Now, let us consider the money wasted by having the name of our post printed on each bit of stationery! It is easy to see that this is in some cases a positive disadvantage. Suppose, for example, that Form 8, Fig. 1, fills the requirements of Exchange methods. If a dozen Exchanges order a supply of these forms and (as they usually do) thoughtlessly require that the names of their respective posts be printed on same, they each pay a great deal more than they would if they allowed the printer to make an electrotype of this form and run off all the jobs from the same plate. It is hard, if not impossible, to find any real reason why this extra matter should be placed on many of our forms. Coöperation in matters of this kind would go far toward cutting down some of our “overhead charges” in Post Exchange work, and to secure such coöperation is one of the objects of this paper.

Still another way to minimize our printing bill is to adopt standard sizes for our forms and to use, wherever possible, the same kind and color of paper. Paper comes in sheets of certain sizes and if the printer has to waste a part of each sheet in printing our forms, we shall have to pay for it. Uniformity in size also leads to facility of filing. Incidentally, money may be saved, in some cases by having two or more forms printed together. For example, suppose we have three forms, A, B and C, to be printed on the same stock, and we wish 5,000 A; 10,000 B; and 15,000 C. If ordered separately, these would entail 30,000 impressions. Suppose, however, that they are ordered at the same time, and that the forms are of such sizes (not necessarily equal) that they may be printed together on one sheet and cut apart afterwards. In such a case, a saving might be made as follows:—Set up each form once, make, one electrotype of Form B and two of Form C; place these with the originals and there will result, in one “form” three Forms C, two Forms B, and one Form A, and a “run” of 5,000 impressions will print the lot ordered. There is a saving of the cost of running 5,000 Form B and 10,000 Form C less the cost of electrotypes (if they are not on hand) and of the extra work of locking up and making ready same. Of course, such a procedure assumes that a considerable supply of forms, say, not less than a total of 5,000, is ordered at one time. For a fewer number, there would be no saving unless electrotypes were already on hand.

To return, now, to our sales slips. It will be noted that our triplicate copies are the same for all departments. They are kept in rolls, if manifolding machines are used, or if triplicating sales books are used, the tissue paper sheets that are left in the books form our retained record. In the cases of both the triplicate and the duplicate copies, a cheap grade of paper is allowable on account of the little handling these copies have to withstand. Also, there is no reason for their being susceptible of rapid assorting according to departments. The duplicates are also identical for all departments, they go to the customer at the time of sale. In case there is a discussion about any particular slip, the items thereon will show conclusively to what department it belongs, as will also the initials of the salesman. On the other hand, it is a positive advantage to have all duplicates of a distinctive color, different from that of the originals. Suppose a customer buys a pair of shoes from the store and later returns them. We should then give him a slip crediting him with the shoes at the selling price. To do this, all that is necessary is to fill out a regular charge sales slip in the usual manner except that the word CREDIT is plainly marked on the slip. The clerk then gives the customer the original of this credit voucher and files the newspaper duplicate in the usual way. Upon sorting the slips that night, the duplicate would be noticed, on account of its difference from the other slips handed in and would thus prevent mistakes. Likewise, if it became necessary for, say, the lunch room to buy a ham from the market, the market attendant could make out his charge sales slip as usual, giving the duplicate to the lunch room attendant with the ham. That night, the appearance of this grayish duplicate among the salmon originals handed in by the lunch room attendant would immediately call attention to the transaction. It might be stated here, at the risk of lapsing into the axiomatic, that such a transaction, although favored by some exchanges, is not good business. It should be of rare occurrence and even then needs special treatment. The proper procedure in such cases would be to have the Market turn the ham back to the Stock Room, receive credit for it and then let the Lunch Room draw the ham at the cost price. This point is more fully discussed in connection with Stock Records.

After the attendant has recorded the charge sale in the proper manner and given the duplicate slip to the purchaser, he still has to dispose of another copy (or two other copies if triplicating records are used). The original should be speared onto an ordinary file, each clerk having his own filing hook in a convenient but inconspicuous place. The triplicate is left in the sales book or on the roll, as the case may be. In addition, the clerk should be required to ring up the sale on the cash register. This is, of course, very important, and heroic measures should be adopted to insure the recording of every sale, of whatever kind, on the cash register. Means to this end can readily be devised. The subject of cash registers is a very important one and is discussed in detail elsewhere.

The above operations are described at some length, but in reality, they are simple in the extreme: a customer makes a purchase, the clerk records the sale, rings up the amount on the cash register, gives the customer his goods and a copy of the sales slip and sticks the other copy on his file. If the cash register prints tickets, he may drop the ticket in his compartment of a box or drawer provided for the purpose, or preferably, give it to the customer.

Daily Check of Charge Sales

After the day’s business is over, each clerk gathers up all his receipts for the day and assorts them into three piles, representing the cash, coupon and charge sales, respectively. He then makes out his sales report on Form 5 as shown in Fig. 4. This report should be printed on the face of an end-opening envelope measuring not more than 4¼ × 10 inches, thus forming a convenient receptacle for the coupons, charge slips and cash turned in. The printed form should be, say, 7½ × 3 inches. As these envelopes are not subjected to rough usage, being used but once, any kind of cheap paper will serve the purpose. It might be well in certain cases to have the envelopes match the color of the original charge sales slips for that department, but ordinarily, this would be found an unnecessary refinement. After making out this sales report, the clerk places in the envelope the cash, coupons, etc., and hands it to the Post Exchange Officer or to the Steward, if so authorized. (For obvious reasons, the Exchange Officer personally should receive and check the receipts the night of pay-day and at intervals during the month, even if the Steward is ordinarily authorized to do so.) The Steward or Cashier has meanwhile unlocked the cash register, noted the readings of the record wheels and taken out the tape showing the printed record of sales.

Figure 4. (Reduced in size)

Now, assuming that triplicate records are used, the Steward takes the triplicate copies—either book or roll—“throws” them or checks them for numbering, to see that all are accounted for, and totals their value on the adding machine. By comparing this total with that shown by the appropriate wheels of the cash register, he ascertains if all charge sales have been rung up. If these two agree, all is well, so far. If they do not agree, a note is made of the discrepancy for use in connection with the operations hereafter described.

Figure 5, (Reduced in size)

By this time, the clerks should be ready to hand in their reports and receipts. The Steward fills out the rest of Form 5 as called for by the various columns and abstracts these reports to his Form 4 as shown in Fig. 5. This form should be printed on a card measuring 3½ × 8⅜ inches, to permit convenient filing. If printed on thin paper, it will have to be filed on a Shannon file which is not so convenient in the long run. These cards should be of fairly good stock, as they are a part of the permanent records of the Exchange, but should be no heavier than necessary. The Steward carries down the totals on Form 4 and compares them with the three separate totals shown by the cash register. Restricting ourselves to a discussion of the charge sales, we see that if the total of the triplicate slips, the totals of the clerks’ reports and the total shown by the cash register all agree then the charge sales statement shown on Form 4 is correct. If there is any discrepancy in this or any other column of Form 4 the mistake should be found and corrected before the clerks are dismissed for the night. Suppose, for example, that the cash register shows a total of $20.60 charge sales for the day and the total on Form 4 is $21.90. The first step is to have the clerks make sure that their reports correctly state the actual amount of charge sales slips turned in. If they are correct, then some clerk has probably forgotten to ring up one or more sales. To trace the fault, let the Steward read off all the charge sales from the record tape of the cash register, calling off at the same time the letter of the clerk who rang up each sale. These can be compared with the triplicate copy of the sales slips, or the assembled clerks can be required to note the sales accredited to them, the grand total of which must equal $20.60. In this manner, the error is definitely located. On the other hand, suppose the cash register shows $21.90 and the total on Form 4 shows $20.60. The effect is that produced by a clerk being short $1.30 in charge sales slips after he has actually made the sales. The same procedure as before will locate the mistake. If he cannot produce the slips (or cash or coupons as the case may be) or satisfactorily explain the mistake, the clerk in error should be required to make good the discrepancy. Discrepancies in cash and coupons can be located and remedied in the same manner. It is important that the clerks be required to participate in the task of locating mistakes and to make good on errors, otherwise there will be no incentive to careful work.

When the totals of the clerks’ reports check against the cash registers, the next step is to check the former against the receipts in cash, coupons and charge sales slips actually turned in by the respective clerks. The cash should, in fact, be counted immediately upon being turned in, checked O. K. on the clerks’ reports and put in a safe place. The charge slips handed in by each clerk are compared with the strip from the adding machine (on which the clerk has added up his slips before making out his report) checked against the report and put aside for filing. Coupons are handled in the same way except that they are sealed in the envelope and put in a secure place until the Exchange Officer personally can burn them. This matter of destroying coupons should never be delegated to any other person. In view of the fact that the receipts turned in by each clerk should, and usually do, check exactly with his report, this particular routine is recommended, as it allows the dismissal of the clerks before commencing the work described in this paragraph. In case of mistakes, the simple expedient of making the clerk at fault assist in the work for a few evenings, is usually sufficient to prevent a repetition. In large Exchanges, where the coupon and charge sales are large, it is not customary to total the charge sales slips and count the coupons until the next morning. If the receipts turn out to be greater than called for by the reports, the surplus can be taken up by entering on a single line of Form 26 (described hereafter), whenever the books are closed (or oftener, if desired) an item showing what departments are credited with these excess coupons, exactly as if it were another day’s transactions. Such entry should, however, be prefaced by the words, “excess coupons”. Shortages should be collected from the clerk at fault, thus making the reports correct. The Exchange Officer should occasionally make the coupon and the charge sales counts himself.

It would be unbusinesslike, if the coupon or charge sales are heavy, to require the Exchange Officer, the Steward or any other high priced man to waste his time counting coupons or any other similar task. A less expensive employee should be detailed for this purpose. For such unskilled labor, a boy at $10.00 per month who can run errands, etc., would be a profitable investment in many cases, thus leaving the expensive employees free to do more important work.

Too much stress cannot be placed upon the importance of insuring the correctness of the data entered on Form 4. If the above mentioned checks have been applied, there should be no trouble in any phase of our charge accounts.

Daily Summary of Charge Sales.

Figure 6. (Reduced in size)

For various self-evident reasons, we use Form 7, shown in Fig. 6, for showing a month’s charge sales. This form gives us in a most convenient shape, a summary of that part of our (daily) Forms 4 that relates to our charge sales business, it safeguards us against the loss of any Form 4 and facilitates posting our ledger accounts. This form is kept up to date, the charge sales from Form 4 being entered thereon daily, and therefore, affords us a most efficient aid in closing our books at any moment. At the end of the month, or whenever the books are closed, we find the totals of the columns of Form 7 and post these totals as lump sums into the ledger. For example, the total of column 1 is posted as a debit in the ledger against Bills Receivable, Customers; the total of column 2 as a credit to the same account. The total of column 3 should be posted as a debit against the Store account in the ledger, this being for articles returned to the store by our customers; the total of column 4 is posted as a credit to the store account, being for articles sold from same, etc. These sheets, constituting Form 7 are 11 × 14 inches, and cost $1.75 per hundred without printed headings; a sectional post binder to fit them can be bought for $3.75. The sheet is the same on both sides and will, therefore, take care of seven departments if we use the whole width of the open book. This will be found ample in most cases. It is useless expense to have the headings, etc., printed on the sheets, because a single sheet with neatly written headings can be made to serve as a sort of index for a great many sheets, provided they are mounted above it and are trimmed off just below the headings “DR.” “CR.”, and also trimmed on the outside margin so that the date figures on the lowermost sheet will serve as an index to the lines of the upper sheets. This labor and money saving point will be more fully discussed later.

Recording Charge Sales Slips.

After these slips have been checked against the clerks’ reports, they must be sorted out and filed according to the names of the purchasers. For this work, have two card index drawers, each fitted with a set of guide cards marked on the tabs with the names of our charge customers. As each slip is found, file it behind the proper name. We first take all the “Store” slips and file them in this manner; we then go through this “sorting drawer” and total the slips belonging to each customer and enter these totals in the column representing that date on Form 9, (see Fig. 7) opposite the names of the respective customers. At the same time, we insert the sales slips diagonally in their proper places in the other or permanent filing drawer. The total of these entries on Form 9 should equal the total charge sales credited that date to the Store on Form 7. If it does, the slips that have been placed diagonally can be shoved down into the proper places as we are through with them; if it does not, they can easily be removed for further examination. This daily check should invariably be made for each department. We proceed in like manner with respect to the other departments, each department having its own sheet or sheets like Form 9. It is evident that this form gives us a summary of all the charge sales made each day from each department, showing the amounts sold to each of our customers. At the end of the month, each line is added across and the total entered. The “Total” column is then added up and compared with the total obtained by adding together the figures (representing the daily totals) on the bottom line. If these two totals check against each other and against the total shown on Form 7, the account may be considered correct and is a record of the daily transactions between our customers and the department considered.

Figure 7. (Reduced in size)

The book in which we bind our Form 9 is known as the “Charge Book”, and it may be well to explain here the physical make-up of this important book of record. It is, of course, on the loose-leaf principle, being of the type known as a “sectional post binder”. It costs $2.50 and the ruled sheets (without special printing) cost $1.00 per hundred. It is, however, to the manner of handling the sheets of the book that attention is especially invited. The old fashioned way would be to enter the names of our customers down the left hand margin of each sheet until all were entered, put the name of the department and the month and year at the top of the sheet and the days of the month at the tops of the successive columns with the heading “Total” at the right of the sheet. Thus, if we had five departments and enough credit customers to require six sheets for the list, we should have to prepare thirty sheets in this manner every month. Now, to show how we can eliminate unnecessary work by the exercise of a little forethought, let us assume that we have started our record in this manner. Now take six copies of Form 9, trim them along the heavy broken lines shown in Fig. 7, and bind one of these sheets in front of each of those we have previously prepared. It is obvious that the book is now ready for another month’s entries without any preparatory writing or numbering whatever other than labelling each new sheet in some convenient place with the month and department to which it pertains. Of course, to care for the five departments, we should have to do this for all five sets of sheets that we originally prepared. It follows that, provided our list of customers does not change, this same operation of inserting trimmed sheets would constitute the only labor necessary to continue this record for an indefinite period.

After considerable experimenting and actual trial in service, the following described scheme has been evolved for handling this record in an efficient manner. While no claim is made that it is perfect, it is believed that it will give thorough satisfaction wherever it is given a fair trial and will save many hours of labor in keeping the books.

1. Take a sheet, Form 9, and enter the names of your charge customers in alphabetical order, commencing on a left hand page. To allow for future changes, leave a blank line before each name and one or two blank lines at the bottom of the page for sub-totals, etc. For clearness and permanence, these names should be put in from a black “record” typewriter ribbon. Write in the headings of the various columns as shown on Form 9. The object in placing the “total” column near the outside margin is to have it next the customer’s name, thus minimizing the chances of error in taking out the wrong total when we make our postings at the end of the month.

2. If our list of charge customers will require more than one sheet, take another Form 9 which we shall call Sheet No. 2 and proceed in a like manner, using the same side of the sheet as before. This should be repeated until all our charge customers are entered. Several blank lines are left at the bottom of the last sheet. Thus, when we have finished and have inserted the sheets in our book, we shall have a complete list of our charge customers all recorded on the left hand pages of our book, that side of each sheet that forms the right hand pages of our book being blank.

3. Now, in order to utilize these blank pages, thus avoiding unnecessary waste, we proceed as follows:—Open your book between Sheets 1 and 2; page 1 will then be on the left and page 2 on the right. This page 2 should now be prepared in a manner exactly similar to that used in preparing page 1, except that the customers’ names are on the right hand margin with the total column next inside. This is clearly shown in Fig. 7.

4. Prepare the blank sides of the other sheets in a similar manner and we shall then have two complete lists of our charge customers, one occupying the left and the other the right hand pages of our book, the confronting pages being practically symmetrical.

5. Let us assume that the Exchange has five separate departments in which charge sales can occur. We cut five sheets along the heavy broken lines shown in Fig. 7 and insert them between pages 1 and 2. Five more trimmed sheets are inserted between sheets (whole sheets) 2 and 3, and so on for the rest of the book. In order to identify these sheets if accidentally removed from the binder and to facilitate the making of entries, we print on each of them in large letters, the name of the department and the month to which they refer. This is best done lightly with red ink as shown (in black) in Fig. 7 where the sheet is marked STORE—AUG. This red ink lettering will not obscure the black ink figures subsequently made.

6. Let us agree to use the left hand pages for the first month’s account and the right hand pages for the next month’s account. Let us take the first trimmed sheet and mark it “STORE—JAN” on one side, and “STORE—FEB” on the other. Do similarly for the sheets reserved for the “market”, “lunch room”, and other accounts. The sheets containing the typewritten headings are not used for recording sales, but are used for guide sheets, for reasons to be set forth later.

It is easy to see from the preceding description that our charge book is a running account, and being always up to date, can be closed at short notice. When two months’ records have been entered, the trimmed sheets are lifted and filed, as will be described hereafter. Fresh trimmed sheets are again inserted in the proper places and the record proceeds as before.

Consolidating Charge Sales Monthly.

The form in which we have placed our daily records of credit sales lends itself very readily to a process of summation or consolidation. The manner of doing this is as follows:—

1. Prepare a second double list of our credit customers exactly as described above, except that the columns, instead of being headed with the days of the month, are labelled with the names of the various departments, as shown in Fig. 8. Let us call this Form 6. Blank sheets trimmed along the heavy broken lines, shown in Fig. 7, are inserted as before, no recording being done on the typewritten sheets—they are simply guides or indices to the various lines and columns.

Figure 8. (Reduced in size)

2. All these sheets are bound in a separate book to facilitate the work of posting at the end of the month. Experiment seems to prove that this is better than binding these records in the same book with the charge sheets just described. This, for the reason that a clerk is apt to waste too much time in continually turning pages back and forth and is also more liable to make errors in posting.

3. Immediately after the end of the month, Form 7, is checked against Form 9 as previously described. We then take, say, the “store” charge sheets (Form 7) and enter on Form 6 the total that each customer owes the store. We do the same for every other department, also entering the balance remaining unpaid from last month in the column provided for the purpose. We also record in the proper column any credit we have given our customers during the month for goods returned, overcharges, etc.

4. By using the adding machine, we find the total of each department’s column on Form 6; it should equal the total charge sales for that department reported on Forms 7 and 9. If it does not, the error must be found and corrected before proceeding further. These totals, when correct, are entered at the foot of their proper columns on the last sheet of the record. Now add these column-totals on the machine and enter the result in pencil at the foot of the “Total” column on the same last sheet of this Form 6 record; it should check against the grand total of the charge sales for the month reported on Forms 7 and 9.

Figure 9. Actual size

5. When all postings to our Form 6 are complete, we station one clerk at the adding machine and one is prepared to make out our monthly bills or statements of account, using Form 1, shown in Fig. 9. Some person reads off Form 6 the name of each customer and the total charges against him by each department. These items are added on the machine and simultaneously entered by the bill clerk on Form 1. The adding machine operator reads the total of the items he has added, which total is entered by the bill clerk on his Form 1 and by us in the column headed, “Total” on our Form 6.

6. Any credit due the customer is read off to and entered by the bill clerk on the statement. He then figures the balance due the Post Exchange, which balance should agree with that figured independently by the person reading from Form 6.

7. When the last bill has been made out, take the printed strip from the adding machine and find the sum of all the totals that have been read off by the operator. This sum should equal the pencil total described in Par. 4 above and checks the correctness of the account. If a “Duplex” adding machine is used, this does not require extra work. If the accounts do not “jibe” and the error cannot be found, take in rotation the charge slips that you have filed against each customer and add them on the machine, making a separate total for each customer. This should locate the error. If the accounts check, however, (and they should if the previous checks have been made properly) this laborious operation is unnecessary.

All our bills are now ready for mailing, and they are made out correctly. In order to obtain the full benefit of this method, our bill forms should require the minimum amount of writing. The form shown in Fig. 9 gives satisfaction. It is a 3 × 5 inch card and therefore fits standard size card index drawers; it is easily handled and will go into a note size penalty envelope without folding. The appropriate month can be stamped in and the name of the customer entered during spare moments throughout the month, so that the only work necessary at this time is to write in the figures. If the lines of Form 1 are “typewriter spaced”, that is, six to the inch, and the form is not too heavy, it can be placed directly in the adding machine and the various amounts printed on the card. The names of the various departments should be printed on this card in the same order in which they occur on Form 6. In fact, much work will be saved if some specific scheme of sequence or relative order among the different departments is invariably followed.

The writer does not know of a more economical or efficient system of handling the bug-a-boo of “getting out our monthly bills” than that just described. Sometimes, a “duplicating bill-book” is used, but it is a wasteful and inefficient method when compared to this. One of the principal advantages of the system lies in the fact that it is unnecessary to keep a private ledger account for any of our charge customers. If we were to do so, we should simply repeat information that we already have. It will be remembered that we have filed away our triplicate record of each day’s charge sales, which record describes in detail the particulars of every sale made on that day. From this, should the necessity arise, we can reconstruct our whole charge sales record for the month. We have also on file (until the bill is paid) another copy of each charge sales slip, filed according to the names of customers, which, in itself, constitutes one side of the ledger account that would be kept under the old system. These, together with the records previously described, amply warrant the abolition of customers’ private ledger accounts. Another great advantage of this system lies in the ease and rapidity with which the books can be closed at any time.

Attention is invited to the note at the bottom of Form 1. This is a labor saving item that is in accord with the practice of many up-to-date houses—to regard a canceled and endorsed check as the best form of receipt. Hence, if a customer pays his bill by check, it is unnecessary to receipt the bill and return it to him, our endorsement on his check constitutes his receipt. This same procedure can be made to apply to companies, etc.; also, if the company commander will use the sales slips as his sub-vouchers for the expenditure.

Credit Transactions.

We shall now take up the procedure to be followed in recording any and all credit which we allow to customers for overcharges, goods returned, etc. It is apparent that such transaction must occur in any business. Accurate track should be kept of them and they should be handled in the most efficient and time-saving manner possible. Each such transaction results in a credit against our Bills Receivable and a charge or debit against the particular department involved.

As before stated, the clerk who receives the goods that are returned to us makes out a charge sales slip, marks it “CREDIT” and keeps the duplicate, giving the original to the customer. It is usually the rule that nobody other than the Steward or the Exchange Officer himself has authority to give customers credit in this way. In the evening, the clerk hands in these credit slips with his report. When the Steward makes up his report on Form 4, after verifying the clerks’ reports, he simply enters these credits in the last column on his Form 4, totals them and describes each separate credit transaction on the back of his report. All the data relating to the charge sales (and credits given) during the day that are shown on the face of Form 4 are abstracted to the appropriate line of Form 7, which latter sheet gives us in concise form all the data we need concerning our charge sales for the month. The credit slips are gathered up and placed with the filed charge sales slips relating to the person who returned the goods to us. At the end of the month, preparatory to making out our bills, all credits are entered in the column headed “Credit” on Form 6, and are checked against the totals shown on Form 7. This avoids the necessity of entering each credit transaction on a separate line of Form 7 as such transaction occurs. Even if the credit slip were lost, no error should result, because we check the total credits entered on Form 6 against the total credits on Form 7 before we start making out our bills. If these do not agree, we must check both Forms 6 and 7 against the credits shown daily by the various Forms 4. We also have another check in the triplicate copy of the credit slips that has been filed away.

Below is a graphic chart which shows how to handle this system of charge accounts. It shows how the various records experience a continuous process of summation until they finally reach the ledger and the customer’s bill, and how the accounts can be checked as we go along, thus avoiding errors. Solid lines show posting operations, broken lines show possible checking operations.

Settling Charge Accounts.

When any of our charge customers pays his bill, we make an entry in our cash book, giving to each such payment a separate line. We enter the amount of the payment in the column headed “Net Cash” and also in the column headed “Customers”. We do not enter any of this amount in the columns referring to the various departments because they have already been credited for their proper shares through the charge sales records and to do so again in the cash book would manifestly give them double credit for each charge sale. We also stamp “Paid” in the “Cash” column of Form 6, using a dating stamp that will fit neatly into this column. One using red ink is preferable. If only a part of the bill is paid, we enter in this column the amount received, extend the balance to the proper column and, at the proper time, carry it forward to next month’s account. Some book-keepers of the old school will keep a “blotter” or some such book wherein these payments are first noted, copying them at their leisure into the Cash Book. As the Cash Book is a book of original record, this is not only wrong, but is incidentally unnecessary labor and hence to be avoided. When payments like these come in, they should be taken directly to the book-keeper, who should immediately enter them in the Cash Book.

Figure 10.

All such payments occurring on any one day are entered in a lump sum under “Collections,” on the Form 4 for that day. In fact, all cash received, whether from paymasters’ collections on payrolls or any source other than cash sales by any of our departments, is taken up on Form 4 as “Collections”. If a bill is paid before the end of the month, it is treated exactly the same as if it were paid afterward, except that the date is stamped in a different colored ink. It does not confuse our accounts, because the amount paid is entered in the “Customers’” column of the Cash Book and the total of this column is posted at the end of the month to the credit side of Bills Receivable, Customers, in the ledger. The “Customers’” column in the Cash Book is solely for receipts from our charge customers and for nothing else.

If, at any time, we wish to find the total charge sales, we simply find the total of the amounts shown on Form 7, subtracting credits, if any. We also use the total sales credited to the various departments on Form 7 in making up our monthly statement for the auditing officer and for the Inspector. To find out at the end of the month the amount due us on account, we turn to Bills Receivable, Customers, in the ledger, where the balance should show the correct amount. This amount should check with the “Total” column on Form 6 reduced by credits allowed and payments received prior to the end of the month.

Dead and Live Records.

It will be remembered that all our Forms 9 were placed in one book and our Forms 6 in another, and that each Form 9 was to be used for two months, that is, used on both sides. After both sides have been used these forms are transferred bodily to the book containing our Forms 6, and placed between the Forms 6 referring to these months. Fresh Forms 9 take the place of those transferred, thus keeping our book “alive” and placing our dead records where they will be less in the way. The logic of this is evident when we remember that we use our Charge Book (Form 6) only at the end of the month, whereas, we use our Form 9 book every day.

As regards Form 8 (charge sales slip) our rolls of triplicate sales slips for the month should be marked on the outside of each roll with the date and the name of the department to which each pertains and kept in a convenient place until the auditing officer has finished his work for that month, when they should be stored together in some place where they can be consulted if desired. They should be preserved for such length of time as may be required by regulations or local laws, depending upon which is the greater. The original slips may be treated in one of two ways; they may be sent to the customer with his bill at the end of the month, or they may be sent to him after he pays his bill. It is felt that the first method is by far the better.

Forms 5 for the month should be preserved until the auditor has finished with them, and it is perhaps advisable to keep them until after the next visit of the inspector. Our Forms 4 are very important and should be kept until after the inspector has inspected the accounts of the Exchange, if not indefinitely. Forms 6, 7 and 9 are a part of the permanent records of the Exchange and should be preserved indefinitely.

The foregoing description of this system of handling charge accounts may sound formidable to the layman, but in reality, it is not so. As shown in the graphic chart (Fig. 10) it is a logical system, proceeding in a simple, orderly way from the charge sales slip to the ledger and the customer’s bill. It belongs to the class of book-keeping called “controlled accounts”—each part of the system knits evenly into the others, and there is a continual process of summation going on throughout the records. There is no duplicated work and every step is one of definite progress towards the goal. It will be found to fulfil the requirements we imposed at the beginning of this essay. It has actually proved its worth wherever installed. It is equally adapted to the large and to the small Exchange. Due to the many available opportunities for checking the correctness of results, mistakes are easily located and corrected. However, if the checks described are applied, especially those relating to Form 4, there should be little excuse for a mistake to appear in any of the higher accounts.

CASH SALES.

In the light of the preceding discussion of charge sales, our methods of handling cash sales can be disposed of in a few words. In all cases of such sales, the clerk simply gives the customer his goods, receiving the money therefor, makes change if necessary, rings up the amount of the sale on the cash register and places the cash therein. The most important part of this transaction, insofar as our system is concerned, is described in the next-to-last clause. If the salesman once rings up the correct amount on the cash register, the store is sure that the transaction is closed, and closed properly. Means to this end will be discussed under the heading of “Cash Registers”.

It is customary to loan, secured by various kinds of receipts, a suitable sum to the heads of the various departments of the Exchange for the purpose of making change. In some cases, it may be advisable to require them to make a cash deposit to cover these amounts. When the Cashier or Steward is under bond, it is feasible to turn the “change money” of the whole Exchange over to him, taking his note for it.

After closing at night, each clerk enters his cash sales on his sales report (Form 5, Fig. 4) and hands it, together with the cash receipts, to the Steward or other authorized recipient. The latter counts the cash immediately, checks it on the clerk’s report and places it one side until the total cash is checked. He then transfers the item to his own Form 4, (Fig. 5) and compares the totals for each department with the cash register readings for those departments, entering the latter, if they are shown separately for each clerk, on each clerk’s report in the spaces provided for that purpose. Discrepancies are handled as previously explained under Charge Sales.

Cash Book.

When the cash is checked and the Steward’s report is correct, he copies the amounts of cash sales for each department into the Cash Book, putting each amount in its proper column. All the cash receipts from all the departments for any one day go on the same line in the Cash Book. On the other hand, credit nothing in the Cash Book to a department except a cash sale. Every other receipt of cash from whatever source is recorded in the Cash Book, also, a separate line being given to each transaction. For instance, as before explained, whenever one of our charge customers pays his bill, we give him a separate line in the Cash Book, entering this amount in two columns, first under “Net Cash” and also under “Customers”.

The Cash Book should have on the “Received” or debit side (the left side) columns for the following items:—Date, Explanation, Vou., Net Cash, a column for each department of the Exchange, Customers, Creditors, Interest and Discount, and at least two spare columns for entering the pay-day collections, etc. The books should not be too bulky as many cash books are, and should, of course, be built on the loose leaf plan. A cash book cannot be designed to suit all cases because of the varying number and kind of departments pertaining to different Exchanges. However, it is easy to secure uniformity of principle and method, which is the main thing. The only point that need vary between different Exchanges is the number of columns in the book and the headings to same.

Figure 11. (Reduced in size)

A cash book will be rather expensive if we have it made precisely as we want it, especially if we have the column headings printed in. There is no doubt that printed headings make a neater book, but in many cases, the advisability of incurring the extra expense is open to doubt. Considering the great variety of stock pages published by various manufacturers, there is rarely an excuse for ordering specially ruled and printed sheets. Special ruling are very expensive, especially when we can order but a small supply. It is found that the sheets shown in Fig. 11 give perfect satisfaction. The lower sample, having 20 columns, will take care of almost any Exchange, and by trimming off the two outer columns of the right hand page, we can secure a capacity of 36 columns. This would prevent us from keeping Cash Received and Cash Disbursed on pages that confront each other, but as the number of pages used for the former usually exceeds greatly those necessary for the latter, this objection has little weight. If convenience so dictated, there is no reason why the two sides of the Cash Book or Cash Account could not be kept in different parts of the book or even in separate books. This would lead to economy of pages.

The upper of the two forms shown in Fig. 11 would be suitable for small Exchanges where a large number of columns are not required, as the left hand side could be used for cash received and the right for cash disbursed. Several of the right hand pages would have to be wasted each month on account of the greater number of entries on the debit side. Some Exchanges use a form similar to the upper one of Fig. 11 except that it is printed and ruled to order and contains a greater number of columns than that shown in the cut. The writer knows of one Exchange that has as many as twenty columns on each side of its Cash Book. Such forms, however, are exceedingly expensive and should be considered more or less of a luxury. The forms shown in Fig. 11 cost $1.75 per hundred retail (without printed headings) and measure 11 × 14 inches, being 11 inches on the binding side. A sectional post binder to fit any number of these sheets can be obtained for $3.25 retail.

The Cash Book is used to give a detailed record of all cash transactions. On the left hand or debit side is entered all cash received and on the right hand or credit side is entered all cash paid out; the difference in the sum totals of the respective sides showing at any time the amount of cash on hand. All items on the credit side of the Cash Book are posted to the debit side of some account in the Ledger and vice versa. (Bank drafts, sight drafts and checks belong in the cash account; notes and time drafts belong to Bills Receivable and Bills Payable accounts.) Our posting is done only when the books are closed, at the end of the month or when necessity arises, thus saving an enormous amount of work. As we keep no private ledger account for each of our creditors or customers, it follows that the totals of each column in our Cash Book are posted as lump sums to the credit of or as a debit against the ledger accounts of Bills Receivable, Bills Payable, or one of the Exchange’s departments, etc. All miscellaneous receipts that do not properly belong to one of the departments, customers, etc., are taken up under “Interest and Discounts”.

An important advantage of this method of handling our cash sales is that we are preparing, as we go along, all the data that will be required by the Inspector. A discussion of the Credit side of the Cash Book is postponed until the subject of Purchase Records is taken up. The above described operations are shown graphically in Fig. 12, where the heavy lines represent operations of recording or posting and the dotted lines show possible checking operations. The item of “Other Cash” is, of course, checked against Form 25, Form 6, or elsewhere, depending upon circumstances.

Fig. 12.

COUPON SALES.

In General.

Figure 13, Cover (Reduced in size)

Figure 13, Coupons Actual size

Coupons, as it may be superfluous to explain, are credit slips sold to enlisted men by the Exchange. They are sold on credit, being secured by notes signed by the purchasers; these notes constituting a lawful lien on the drawer’s pay are supposed to be redeemed at the next pay day. The credit slips can be used at any time for purchasing articles at the Exchange. Exchanges formerly used metal coins or “checks” for this purpose, but it was considered inadvisable to permit credit to be so easily counterfeited, transferred, etc., hence the use of paper coupons has become universal, being covered by mandatory orders in certain circumstances.

Kinds of Coupons.

There are two classes of coupons, the first being the well known “Coupon Book” shown in Fig. 13. These books are made in various denominations ranging from one to five dollars. They are composed of a cover and several interior pages, the latter being divided by perforations into five coupons each, representing values of five, ten or twenty-five cents, depending upon the value of the book. For instance, a $1.00 book contains three sheets, two composed of five 5c coupons each and one composed of five 10c coupons. On the cover of each book is printed the serial number of the book, its value and blank lines for the insertion of the signature of the person to whom issued, the signature of the Exchange Officer and the date of issue. It is also customary to have printed on the cover the words “Not Transferable”. In some cases, on the back cover of each book is printed a promissory note which, after being signed by the soldier, is torn off and kept by the Exchange authorities until the value of the book is collected in cash from the soldier. A variation of this scheme is to have a separate sheet in each book so printed that it will perform a like function. In either case, it is expected that when the book is depleted, the clerk making the last sale shall take up the cover of the book in order that it may be filed in the Exchange for such period as the Exchange Officer shall determine. This, for the reason that sometimes a man will claim that, although he signed up for certain coupons at a certain time, he failed actually to receive the coupons. The possession and production by the Exchange of these used-up covers are conclusive evidence to the contrary.

These coupon books have certain inherent defects that are more or less serious. In the first place, it is found that they can be used as stakes in gambling games and can also be sold or otherwise transferred by the original drawer. This is objectionable, not merely because it is against regulations, but also because the person who so receives the coupons is not apt to draw coupons of his own, thus tending to curtail the amount of coupon sales transacted by the Exchange. This transferring of coupons can be accomplished in several ways. In large garrisons it will take a little time before the clerks will know each man by sight, especially when there is an influx of recruits. If a customer is not known to the clerks, he might be able to use another soldier’s coupon book unless the clerk should require him to write his name and compare it with the signature on the book presented. This would be impracticable at certain times of the month when the coupon sales were heavy, as it would consume too much time, thus preventing the clerks from waiting upon other customers as promptly as they should. It is evident that this kind of a transfer could be effected with any kind of coupons, and there is no preventive except to have the clerks become acquainted with every man in the garrison at the earliest practicable moment. When there is time, the clerks should, in doubtful cases, require the customer to write his name and then compare it with the name signed on the book. All clerks should understand that when any person presents a coupon book not his own the book is forfeited to the Exchange and the occurrence is to be reported to the Exchange Officer.

Another way in which coupons can be transferred (unless each coupon is numbered to correspond to the cover) is as follows:—Private A borrows from Private B fifty cents in cash and gives him a dollar coupon book in exchange. Private B removes the staple which binds this book together, takes the book apart and throws away the cover. He then loosens the staple in a book which he himself has drawn at the Exchange and carefully inserts enough of the loose coupon sheets from A’s book to fill it up again, and bends the staple back into its original position. This scheme is of wider prevalence than most Exchange Officers would imagine, and it is very hard to detect.

Another fault to be found with the coupon book lies in the possibility of there being a wrong number of sheets of coupons in it. Printers are but human and it sometimes happens that there are too few or too many coupons in a book. Unless this is detected before issue, it causes an error in our statement of coupons outstanding. To prevent this, it is necessary to examine each book before issuing it, (even before handing them over to the coupon clerk), a tedious operation, one which consumes unnecessary time and labor.

In most Exchanges, the conviction sooner or later arises that there are coupons outstanding of which the Exchange has no record. This may occur through the suspicion that some person has acquired coupons in some unauthorized manner. When such cases arise, it is customary to place the Exchange Officer’s signature on the backs of the coupons or to employ some secret mark. This is a laborious and expensive operation and should not be resorted to unless necessary. In justice to our printers, be it said that they use every endeavor to prevent coupons from falling into unauthorized hands, but Exchange Officers, if inexperienced, do not always appreciate the importance of taking like precautions. All coupon books should be kept in a place that is absolutely secure, and nobody should have access to same, except the Exchange Officer himself. He should use every effort to prevent a single book from reaching his customers except in the regular way. He should take from the coupon vault only enough books to supply the demand, and they should be carefully accounted for by the clerk who issues them to the men.

Some Exchange Officers use a fac-simile stamp instead of countersigning each book in person. If this is done, the stamp should be most carefully guarded, and kept in the personal possession of the Exchange Officer. When the stamp is made, there should be incorporated in it, some secret mark, otherwise, any person could secure another similar stamp, to the possible loss of the Exchange. This secret mark should be in the nature of a double instead of a single period or some other inconspicuous mark that would probably not “take” well should any person attempt to produce a second fac-simile from an impression of the genuine stamp.

The second type of coupon, shown in Fig. 14, corrects some of the faults of the coupon book. In the first place, it is much cheaper, the first order being about one-half and subsequent orders costing about one-third of the price of the coupon books. This is an important saving because the cost of coupons is a dead loss to the Exchange, and if a satisfactory coupon can be obtained at a low cost, it should be used as a matter of course, and the overhead charges correspondingly reduced.

Figure 14.

As will be noted, these coupons consist of a single sheet of stamps or coupons, separated by slot perforations, the whole sheet containing twenty 5c coupons. Considerable experience in this line prompts the statement that no real advantage is gained by having coupon books of denominations higher than one dollar. The style of coupon here illustrated makes a virtue of this fact and all slips are ordinarily made in the one dollar denomination only. In counting up the coupons after the day’s work, we know that, regardless of colors, each coupon represents 5c. Another beauty of the scheme is that it is practically impossible to have strips containing a wrong number of coupons, the method of manufacture almost precluding such a possibility, thus obviating the laborious checking process. Still another advantage is that the whole dollar’s worth of coupons is printed on a single piece of paper, thus preventing any addition to its value, as is possible with the book when partially depleted. One might think that the smaller size of these coupons would make them hard to handle and count, but an officer of considerable experience in this line of work states that by using the rubber end of a pencil they can be counted with more facility than can the other style of coupons. Some Exchanges would probably require each strip to have attached to it a detachable stub on which the soldier would be required to receipt for the coupons and also promise to pay for them at next pay day. In this case, as in the case of the coupon books, such practice merely adds unnecessary work and serves no useful purpose. On pay-day, we should have to handle one such stub for every dollar’s worth of coupons that each soldier had drawn; each of these stubs or cards would then have to be stamped “Paid” and returned to the soldier. This is not an efficient method.

Whichever style of coupon is decided upon for use should be printed on stock of various colors and coupons of one color only should be issued until it is desirable to have a check on our outstanding coupons. (Of course, if the books are used, it will be necessary to have the 5c and the 10c coupons of different colors.) The color should then be shifted and when coupons of the old color cease appearing, we can arrive at an approximate check on our outstanding coupon account. We say “approximate” because it sometimes happens that a man puts away a whole or a partially used book in a garment and thus inadvertently retires it from circulation for a space of time that may stretch into months. Of course, this could be prevented by issuing a notice that all coupons must be presented before a certain time, and that after that time, no coupons of the old colors would be accepted. This would give us a fresh starting point as regards our outstanding coupons, but such a proceeding should be resorted to only under the most serious circumstances, because it savours somewhat of a person refusing payment on a draft. When, however, there is good reason to believe that our Coupons Outstanding account is incorrect, such a step should be taken immediately, as it is about the only practical way in which we can correct the account—a very important one.

Regulations Concerning Coupons.

Before explaining at length the system of handling coupon sales advocated herein, it may be well to examine the regulations with which we must comply. First, comes par. 15, G. O. 176, W. D., 1909, which reads as follows:—

“15. Sales on Credit. When the commanding officer and council are agreed that it is to the true interest of the command, the former may authorize a credit at the exchange to any soldier in good standing to an amount not exceeding in any one month one-third of his monthly pay. This will be given upon the request of the soldier, in writing, approved by his company commander, and these credit checks will be carried on the accounts of the exchange as “bills receivable” until paid. Soldiers granted credit will be distinctly informed that they must make prompt and unsolicited payment to the exchange officer on next pay day. Defaulters will be debarred the privileges of the exchange and are liable to trial and punishment. It is the duty of the soldier who has been given credit to pay the amount as soon as he receives his pay, and the exchange officer will be present at the place of payment to receive the money or make such arrangements as will facilitate the payment. Credit will not ordinarily be extended to a soldier between the date of last payment on rolls before discharge and the date of discharge. When the debt has remained unpaid one pay day on which the soldier was paid a balance sufficient to discharge such debt and no other means of collection is practicable, the exchange officer will notify the company or detachment commander, who will note the amount on the next pay rolls as “Due Post Exchange —— ——” and on succeeding rolls until the debt has been collected, or until it is apparent that it can not be collected, when the credit check will be turned over to the company or detachment in lieu of so much cash at the next distribution of profits as provided in paragraph 17.”

In the opinion of many, it is unfortunate that an arbitrary limitation of credit has been fixed as shown in the first sentence of the above quoted paragraph, as it tends to work a hardship upon some of our most valuable soldiers. Most of our older non-commissioned officers and N. C. staff officers are married and spend most of their pay for articles that are carried in stock by well equipped Exchanges, such as meats, groceries, etc. It is not always convenient or even possible for them to pay cash for purchases, and there is no doubt that they would do a much larger business with the Exchange if greater credit were allowed them. It is a well established custom to extend reasonable credit to all commissioned officers; it would seem but just to extend a proportionate amount of credit to such N.C.O.’s as might be vouched for by their respective organization commanders. It is hoped that this limitation may be modified, but until that occurs, the Exchange Officer has no discretion in the matter and should be careful to avoid any infraction of the general rule.

The second sentence of par. 15 also merits more than a passing glance. It requires a previous request “in writing” by the soldier before credit coupons can be issued him, and the request must be approved by his company commander. It is not specifically stated that this request must be renewed every month, nor is the writer aware that this point has ever been decided. We may, therefore, assume, when any man has once made this written request, that credit to the amount of one-third of his monthly pay be extended to him, that he need not formally renew this request monthly. Should this interpretation prove fallacious, we must have the consolidated request (Form 25, to be described hereafter) signed by the men monthly. If this is done, the list should be signed at the same time as the pay rolls, to save trouble for the men. It is found that when there is an unnecessary amount of “red tape” connected with the operation of securing credit coupons, the men will (perhaps unconsciously) tend to shun the process, with consequent loss of business to the Exchange. There is every reason why we should make it as easy as possible for everybody to transact business with the Exchange and any unnecessary stumbling blocks should be carefully searched out and removed. The Exchange should be run on the same general principles which govern a civilian store, and if the latter subjected its customers to petty annoyances of any kind, it would soon be driven out of business by lack of trade.

Returning to paragraph 15, it might be remarked that perhaps the best way in which the men can be “distinctly informed that they must make prompt and unsolicited payment”, is by incorporating this statement on the receipt which they sign when the coupons are issued to them. Beside the other matter contained in par. 15, we should note par. 13 and par. 14 (c) and (e) of the same order. They read as follows:—

“13. Checks or Coupons. The use of checks or coupons representing values, and exchangeable for merchandise or other charges at the exchange, is encouraged merely; but care should be taken that these checks are not disposed of to unauthorized persons, and to provide against this, they should never be redeemed in cash. When permitted by the commanding officer, they should be sold by the exchange officer and regarded as a liability until redeemed.

“The coupon-book system of extending credit to enlisted men will be used by all exchanges conducted at posts where more than two organizations are stationed, except at temporary stations and at places where conditions of service have made it impracticable to procure the coupon books.

“These coupon books will bear the name of the enlisted man to whom issued and will be honored at the exchange only when presented by the enlisted man whose name appears on the book.”

“14 (c). Bills Receivable (Enlisted Men).—To show the value of checks issued to enlisted men, and the amount of cash received from them in payment of their due bills. When checks are issued, the entry will be ‘Cash, Dr. to Bills Receivable.’ The difference between the two sides of the account will show the amount of due bills on hand unpaid.” (Par. II, G. O. 201/09.)

“14 (e). Check Account.—To show the amount of checks outstanding. When the checks are issued, this account will be credited as above, thus, ‘Bills Receivable, Dr. to Checks.’ The amount of checks received each day for merchandise will be charged to the account, thus, ‘Checks, Dr. to Merchandise.’ The difference between the two sides will show the amount of checks outstanding.”

Note that the outstanding coupons are a liability, as they may be presented as a claim against the Exchange at any time. Of course, the receipts which the men have given us for these coupons, in other words, their notes promising to pay us for the coupons, are an asset and should be carried under Bills Receivable. Some Exchanges call such assets “Bills Receivable, Credit Coupons”, thus differentiating them from such as Bills Receivable, Charge Accounts or Bills Receivable, Laundry Coupons.

Paragraph 14 (c) and (e) translated into non-technical language simply means that when we issue coupon books of a certain value to the men, we must enter this amount on the left hand or debit side of our “Bills Receivable” account in the Ledger, thus charging up “Mr. Bills Receivable”, as it is sometimes explained, with a certain amount for which he must account. Now, as the Ledger is to be kept according to the double entry system, we must obey the fundamental principle of this system, which is, “for every account that is charged (debited) a certain amount we must credit some other account with the same amount”, hence the name, double entry. In view of these facts, therefore, we turn to our Check Account—or Outstanding Coupons, if you prefer to call it so, and credit this account with the same amount that we charged against Bills Receivable. When we receive the cash for the men’s notes at pay day, we credit “Mr. Bills Receivable” with the amount taken in, thus clearing him of this amount and making him no longer responsible for it. We have previously, of course, entered this amount on the debit side of the Cash Book, for the same reason noted above. When the coupons are presented by the men in payment for articles purchased by them, we credit “Merchandise” (or the proper department of the Exchange, if departments are used) with the amount taken in. This, for the reason that said department is no longer accountable for that amount of merchandise; we must, therefore credit that department with the proper amount and charge or debit it against the outstanding coupon or Check account. It must be remembered that outstanding coupons are a liability against us and are in the nature of bills payable—except that they are payable only in merchandise. Hence, if we consider this account as a living person—one of our creditors—it will appear more logical when we place to his credit everything we owe him, i. e., the coupons we have given him, and to charge him the value of the merchandise he has obtained from us in return.

The above prolix explanation will sound puerile to an experienced accountant; it is not written for him, but for the inexperienced man with little or no knowledge of scientific book-keeping, who is trying to work this system or one like it. The writer knows from bitter experience how hard it is to avoid some of the unexpected pit-falls of double entry.

Now we are in a position to describe the manner of handling our coupon sales, starting from the very beginning.

Issuing Coupons.

Figure 15. (Reduced in size)

The first thing to be done is to have the various organizations submit their lists of men who are entitled to credit at the Exchange. This is usually done a few days after pay day, it being the excellent custom in most Exchanges to issue no coupons until about five days after, in order to attract some of the cash that is apt to be plentiful for only a few days. One of the best forms for such a list known to the writer is Form 25, shown in Fig. 15. It measures 9 × 20 inches and may be punched to fit a loose leaf file. It is faint ruled horizontally six lines to the inch in order to fit typewriter spacing. The length of this form enables a whole company of 110 men to be entered on its face, without resorting to the necessity of turning a page. In garrisons where the organizations are uniformly smaller, the length of the form can be correspondingly reduced. Each organization fills out one of these sheets on a typewriter, entering the names of the men in pay roll order in column 3. In column 2 is entered the rank of each man, and in column 4 is entered the amount of credit he desires, which must not exceed one-third of his pay. The men sign their names in column 1 and in space A is printed the statement to which they subscribe—that they request credit to the amount of one-third of their pay and that they promise to pay for their coupons on the pay day after drawing same, etc. This list is then sent to the Exchange at the regular time, preferably a day or two before coupons are to be issued.

There is a point in this connection that sometimes causes trouble, due to the fact that pay day never comes on the first of the month. There are two ways of handling the situation. The first is to have the companies submit their lists to the Exchange on the first of the month and the Exchange issue coupons on this authority until the last of the same month with the exception of the five days after pay day, during which time, no coupons are issued. The men pay for the coupons on the pay day which occurs in the succeeding month. The principal objection to this method is that if a man draws his full allowance of coupons on or near the first of every month, he would, if he deserted a few days before pay day, cause the Exchange a loss of twice his monthly allowance. The second way of proceeding obviates this defect: it consists in having the companies submit their lists a few days after each pay day. The Exchange issues coupons on this authority and all of these coupons are supposed to be paid on the pay day which winds up this period. Therefore, it is seen that the Exchange runs a smaller chance of loss, or rather, the chances are that the loss will be smaller.

Figure 16, Actual size

Upon receiving these lists, the coupon clerk at the Exchange takes a supply of Form 19, shown in Fig. 16, and enters the names of the men at the top of these cards, one card for each man who is entitled to credit. This work can be done at odd moments during the month. It is also a good plan to enter the amount of credit to which the man is entitled. This data should be entered at the very top of the card where it will catch the eye. These cards are 3 × 5 inches, specially printed; they fit into the filing cabinet, to be described later. One standard drawer 15½ inches long will hold enough cards to take care of a six company post. The cards should be of fairly good writing stock, but no thicker than is necessary to insure ease of handling. They can be obtained from any job printer, but care should be exercised that they measure precisely 3 × 5 inches, otherwise, they will prove very troublesome to run over rapidly in the drawer, because some will be larger than others. Plain cards of this size can be bought at $1.50 per thousand from regular dealers. All cards pertaining to any one company are behind an index card bearing on its tab the designation of that company. It is also a convenience to have a set of alphabetical guides for each company, as they facilitate finding and filing the cards. After any of these cards receives a record, it is highly important that it not be lost or stolen, so the drawer containing them should be locked except when actually in use. When any man applies for coupon books at the Exchange, he signs his name in the space provided on the card, the clerk adds his own initials as witness, stamps in the date and enters in ink or indelible pencil (or preferably by means of a rubber stamp) the amount of the coupons issued. If the clerk does not recognize the man, he compares his signature with the same man’s signature on Form 25, which he should have near him for this purpose and to see that the man does not overdraw his allowance. He also requires the man to sign his name on the stub of the coupon slip or the cover of the coupon book issued. In addition, the clerk should have at hand a strip of paper on which he has entered in rotation along the left hand margin the serial numbers of the coupons he has on hand. Such a strip can be struck off on the adding machine. As coupons are issued, the clerk should enter opposite each number, the name of the man to whom it was issued. He can do this while the man is signing the coupons, so no time is wasted. In the evening, this strip is given to the Steward or cashier and the total value of coupons issued is entered in the proper place on the Steward’s daily report (Form 4, Fig. 5). The record of this strip is checked by comparison with the number of coupons left in the possession of the coupon clerk.

It is found in practice that Form 19 contains sufficient space for noting the transactions of any month, for very few men will draw coupons as many as six times during the month. It will be noted that this scheme does not contemplate restricting the men to but one drawing during the month, as is the practice in some places. The Exchange loses trade by such methods, and much better results are obtained by permitting the men to draw when they please.

When the end of the month arrives, the coupon clerk disregards it by continuing to use the same set of cards right along until 24 hours before pay day occurs. (It should be understood by the whole garrison that no coupons will be issued during this time, in order to allow the coupon clerk to work up his pay table collection sheets). By means of an assistant, the coupon clerk transfers the total of the coupons shown on each Form 19 to column 10 on Form 25 opposite the name of the man to whom that particular Form 19 refers. As fractional parts of a dollar are not issued, $5.00 can be abbreviated to “5”. At the same time, the coupon clerk reads off the totals of any unpaid cards that have been carried from the preceding month, these figures being entered in the same manner in columns 5, 6 or 7, as the case may be. It will be noted that these cards have no place for “brought forward” entries. This is unnecessary labor and is therefore omitted. It is no argument against such a practice to ask what would happen if one of the old unpaid cards became lost, because we might ask the same question concerning the current cards. The answer lies in the fact that the checking system will take care of such cases. In this instance, columns 5, 6 and 7 are checked back to the Forms 25 pertaining to the preceding month.

It will be noted that our Form 25 makes provision for entering Laundry charges and has in addition a spare blank column for such miscellaneous collections as may be found desirable. The particulars of the Laundry entries will be dilated upon later. When the amounts that the various men of any organization owe to the Exchange have been entered in their proper columns, each line is added across and the totals due from each man entered in the proper column. Each column is then totaled on the adding machine and the footings checked by comparing the total of the total column with the sum of the totals of the other columns. If they agree, that sheet is ready for payment, and a like process is instituted with the other sheets. These sheets and the Forms 19 are the only papers that need be taken to the pay table.

Pay Table Procedure.

It may be just as well to discuss this point here, because it is related to our coupon sales more closely than to anything else.

The first thing to do is to make sure there is available a plentiful supply of change. Where there is no bank convenient to the post and the men receive their money from a paymaster, he will sometimes agree to bring with him an amount of change sufficient for the needs of the Post Exchange, but if there is a bank available, we should hesitate before imposing upon the good nature of the paymaster to this extent. It is a great convenience to the men to have their ten dollar bills “changed”, and no Post Exchange should demur when the men offer such bills in payment of their debts. We must always remember that the principal reason why the Exchange exists is to be a convenience to the enlisted man.

There should be three persons at the Exchange table on pay days; the Exchange Officer to personally receive the cash and make change, the Steward or book-keeper to read from Forms 25 the amount each man owes, and a clerk to check this reading with the men’s notes (Form 19), cancel them and deliver same to the men. A non-commissioned officer of the organization being paid is stationed beside the Steward to identify the men. He calls to the Steward the names of the men as they come up, the Steward calls off the amount that each man owes, the latter gives the money to the Exchange Officer. The clerk has meanwhile checked the total amount covered by Form 19 with the amount read off by the Steward, stamped the card “Paid” and placed it in front of the Exchange Officer for his inspection. The latter then gives the card to the man with his change and the incident is closed. It is usually found advisable to have a selected non-commissioned officer detailed to see that all men report at the Exchange table.

After payment is finished, the clerk should total the value of the cards he still holds for each organization and subtract it from the total shown by the proper Form 25. The sum of all these remainders should equal the amount of cash actually taken in at the Exchange table. This check should always be made, and at the earliest possible moment.

It sometimes happens that a man pays for his coupons before pay day; he may have been discharged or transferred, etc. In such a case this fact should be stamped on Form 25 and the total of such amounts deducted at the bottom of the sheet before going to the pay table. The amount of such payments should also be entered on the debit side of the Cash Book as “Pvt. Jones, Co. A, ... $3.00 ... $3.00”, the sums coming under the net cash and the credit coupons columns respectively. If he also paid $1.40 for laundry work done, this entry would be “Pvt. Jones, Co. A, ... $4.40 ... $3.00 ... $1.40”, the sums coming under net cash, credit coupons and laundry coupons respectively. The amounts collected at the pay table are entered in the Cash Book in the same way, all on one line. At the end of the month or when the books are closed, the total of the credit coupons column is posted as a lump sum to the credit of the Bills Receivable. Credit Coupons account in the Ledger and the Laundry collections are handled in the same way.

Having traced this branch of the coupon business to its end, let us retrace our steps and follow another branch until we come to the same goal, the Ledger.

Coupon Sales.

When the men receive their coupons, they use them for purchasing articles from the Exchange. The clerk making a coupon sale should identify the man making the purchase and make sure he is using his own coupons. He should also satisfy himself that there is no fraud, forgery, etc., connected with the coupons. These two operations are ordinarily instantaneous, requiring no waste of time whatever. The clerk then gives the purchaser the desired articles, tears off a corresponding value in coupons and drops them in his private drawer or compartment, meanwhile ringing up the sale on the cash register and giving the purchaser the receipt printed by the register.

Figure 17, (Reduced in size)

After the day’s work is over, each clerk handles his coupon sales in the same manner as previously described for charge sales, and they are checked by the Steward as before. The latter enters on his Form 4, (Fig. 5) the amount of coupon sales made by each clerk, also, the total amount of coupons issued during the day. All these coupon transactions for any one day are then entered on a single line of Form 26 (Fig. 17) which is the same as that used for Form 7. As will be noted from an inspection of the cut, the coupons issued are entered in column A and the total receipts from all departments are entered in column B. These receipts are distributed among the department as shown, the value carried in column B equalling the sum of the amounts carried in the columns to the right.

Each Form 26 refers solely to one month’s transactions, there are no “brought forward” items. At the end of the month or whenever the books are closed, all of the columns on this form are footed up and the totals checked across. The total of column A should agree with the strip record which the coupon clerk has been keeping as previously described. The detailed process of checking this account will be described later, but it is evident that if the Steward has made out his daily reports (Form 4) correctly, and correctly copied the coupon records to Form 26, there can be no error in the latter statement. After successfully withstanding the checking process, the total of column A is posted as a lump sum to the debit side of “Bills Receivable, Credit Accounts” in the Ledger, writing the entry thus:—“Aug. 31 Credit Coupons $54.00”. It will be remembered that we must also credit this amount to the Outstanding Coupon account. We now transfer the total of the Store column to the Store Account in our Ledger, entering on the right hand or credit side, “Aug. 31 Coupon sales $8.15”. We proceed in like manner with our other departments. The total of column B must, of course, be charged (debited) against the Outstanding Coupon account in the Ledger.

A summary of all these operations is shown graphically in Fig. 18. The solid lines show how a record is carried through the books until it arrives at the Ledger. The dotted lines show the various checking operations that are possible. Attention is especially invited to checking Forms 25 and 26 against each other.

Figure 18.

In leaving the subject, it is deemed proper to state that the Exchange Officer should keep a single entry record of all unused coupons on hand. When they are first received from the printer, he should carefully check them in person and see that they are safely stored. His record of them should show the numbers and colors of the coupons and exactly how many of the various colors he has on hand at any time.

Coupons should be issued at a fixed time daily, and the Exchange Officer should see to it that the men are never disappointed, but are always able to secure their coupons at the specified time.

STOCK RECORDS.

In General.