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OPINIONS FROM OTHERS.

14th February 1922
Page 29
Page 29, 14th February 1922 — OPINIONS FROM OTHERS.
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Which of the following most accurately describes the problem?

Keywords : Butler, Domestic Work

The Editor invites correspondence on alZ subjects connected with the use of commercial 4110tOTS. Letters should be on one Side of the paper may and"typewritten by preference The right of abbreviation is reserved, and no responsibility for views expres.ed is accepted.

Simple Road Transport Accountancy.

The Editor, THE COMMERCIAL MOTOR.

• [1,906] Sir,—I am obliged to Mr. F. C. Butler for his kindly notice of my article in which I made a few minor criticisms of his system of accountancy, and with your permission I wilt reply to the points which he raises in his letter, published in your last issue.

I certainly did lose sight of the fact that his account book was devoted to an individual machine, but I:did so in this way. I am a haulier, and my knowledge of accountancy is elementary. I decided, in considering this system, to forget, temporarily, even that elementary knowledge. Consequently, when I came to the term 'Capital Expenditure" I thought to myself "Let me see ; what did it cost me to set up in this business? I bought a couple of lorries, £1,9S0; a War Department shed as a garage and workshop, 2340 ; a Drummond lathes £95; several second-hand. tools and fittings, 120 "—and so on. "Is that the

Capital Expenditure' on which I must reckon interest, or must I consider only the lorry ? " That was my dilemma, as a haulier.

Air. Butler, in his letter, has answered the question satisfactorily,. for my benefit, and for countless other hauliers who read this paper, and who, as I know well, will also be perplexed. criticism is that that matter has already, therefore, served its purpose. If Mr. Butler will, in, future editions of his book, preface it by a few simple instructions, dealing with such matters as the above, and some of those below, we shall all be so much the better off.

The question as to the advisability of regarding administration charges as a running cost may appear to Mr. Butler as one turning on personal opinion only. I cannot agree with him there. I have been in the commercial motor industry all its life, and its greatest bugbear' in the beginning, and now, is the lack of definite knowledge, on the part of the user himself, of the real operating cost of his vehicle: This lack of knowledge is a heritage from the days of horse transport. It was, and is, the result, if Mr! Butler will pardon plain speaking, of the standard methods of accountancy which, quite naturally, as must be adputted, aim at producing figures which illustrate the progress of a business as a whole, and in which the segregation of special seetions is not necessarily made a prime consideration. I regard it as essential that the actual operating costs of the vehicle itself should appear automatically, and should be regularly available for purposes of comparison and check. This also answers Mr. Butler's remarks about advertising.

I was just as vague about insurance as I was about interest on capital expenditure. I had to take out fire insurances for my garage, etc., as well as insurance under employers' liability, and I did not, as a haulier, know whether IVIr. Butler meant one to enter these with that of the vehicle or without it.

The proper -recording of depreciation has always been a thorny 'problem. From the point of view of a haulier who buys a machine to use, and not to look at, the mileagebasis is the only satisfactory one. That the mileage run plays an important part in any iransactionaconcerning a second-hand motor vehicle none will deny.

I am with him in believing it to be unwise to place in the hands of an owner any statement "to compile. which he could say, Well, I need not really allow for that_ " I do not, however, understand wherein any words of mine should have called forth this argument.

I do not think that it is possible, or even necessary, te divide the administration charges in such a way that each individual member of a fleet will get its own precise allocation. The best way is to regard this class of expenditure as a Whole, and deal with it in the same way as any works would do ; that is to say, consider it as "overhead." In reply to the last paragraph of his letter I should like to refer to a previous one. He concluded by stating that he has endeavoured to eliminate unnecessary headings, and seems to-think that I am suggesting that he should make two heads grow where but one grew before. Yet earlier on he has himself suggested the separation of garage and cleaning charges, so that the owner might have, indenendently, knowledge of the cost of cleaning. Surely it is more important that he should, regularly, know the working cost of his lorry, and then, if that cost proves high, apply himself to investigation of the various items which go to make up that cost. That Mr. Butler has achieved his aim "that of showing a user what his total outgoings will be " I quite agree, and I hope he appreciates that my• criticisms are put forward in a helpful and constructive spirit I repeat that his book is likely to meet with a welcome from a large class of motor vehicle users, and that it fills a long-felt want.—Yours faith

fully, TEE SKOTC11..

Taxation on Provincial Buses.

• The Editor, TEE COMMERCIAL MOTOR.

[1,907] Sir,—I was very pleased .to read the article in The Commercial Afotopof January 17th, on "How Taxation HAS the Provincial Bus Owner." This matter certainly does require revision. At the present time my concern runs a bus twice per week, with a gross mileage of -24, and we have to pay 260 per annum in taxation. This shows a tax cost at about 12s. 6d. per journey. Of course fares have to be charged accordingly, and now that earnings, etc., are on the down grade, a reduction is being demanded by the travelling public. Ultimately it looks like stopping altogether so far as we are concerned, for there is only one end when the receipts cannot he brought up to meet the outgoings. Thanking you for taking this matter up.—Yours faithfully,

Notts. H. S. WATSON.

Tags

Organisations: War Department
People: F. C. Butler

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