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19th January 1926
Page 26
Page 27
Page 26, 19th January 1926 — PROBLEMS OF THE HAULIER AND CARRIER.
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Which of the following most accurately describes the problem?

The Division of Expenditure. Filing Accounts without Fuss. The Subsequent Extraction of the Information on Costs.

AMEDLEY of bills and chits crammed into a box or a drawer of the desk is often the sole record of operating costs existing in cases of small businesses. Whilst it is obviously better to keep receipts, unpaid bills and such documents than to consign them to the waste-paper basket or fire, they serve very little good purpose lying in a confused mass. From time to time• one or twO bills fall on to the floor and find a home in the dust-pan next morning,

In such circumstances, the owner of the business cannot tell what his real expenses are, neither can he keep a proper check of the separate classes of cost so as to enable him to alter his methods, vary his price, or buy from other sources in order to make better profits. Note, I do not say making a living, fiut make a profit ; there is a distinct difference between them, and the fact should be realized. The phrase "make a living" indicates gathering just sufficient money to pay one's way, whereas making a profit infers putting money by and having a sound sufficiency at the same time.

However, to return to the question of the division of expenditure; by this I mean sorting out the bills and chits into their special sections so as to enable proper cost accounts to be written up.

Time is an important matter, especially to a man in a small way of business who probably drives one of his own vehicles, and, therefore, cannot sit clown and enter up every item as it comes along. He must be on the road earning part of the concern's income and has to devote his time to book-keeping later. Even -though a boy or junior clerk be employed, owing to the wide scope of his job, he cannot be on the spot every time a bill arrives or a post comes in.

In such cases, what is needed is a simple home-made filing system by means of which papers can be sectionized in a moment and kept in readiness for entering up In the proper books as and when opportunity occurs.

There are two types of expenditUre to be deat with-payments by cheque or cash almost daily and those which only occur periodically. In the former class are bills for fuel, lubricants, maintenance and wages; in the second or " irregular " category are the following items: Tyres, depreciation, licences, rent and rates, insurance and interest.

Although costs will ultimately be divided Into two main groups, running costs and standing charges, I have ignored these two sections at the moment and considered the frequency of the receipt of bills under various headings. Petrol bills will, obviously, be far more common than insurance premium invoices, and will call for arrangements to he made to deal with them on the grounds of simple and quick handling by persons not well versed in book-keeping or figures generally.

Separating the Regular from the Irregular Expenditure.

Every haulier and carrier must decide which items are in the "regular" and " irregular " classes so far as he is concerned ; anything occurring less often than once a month can be regarded as in the " irregular" class. I described rent and rates above as "irregular," but in those cases where weekly or monthly settlements are made with the landlord this item should be transferred to the "regular " section. Before adopting this system, any individual must think of his method of settling accounts and decide which items are to be classed as of frequent or infrequent occurrence. The filing system mentioned can be adapted to suit almost any type of requirement, and has the advantage that generally it costs nothing, involving only a little time to make the apparatus and scrap material.

• A " regular " file can be made out of a wooden box, the best shape probably being that in which a vehicle spring is often packed. In the box a number of nails are driven to form a spike file according to the number of headings. Many people keep a plain spike file on their office walls, but it has not the protection for the bills which the box affords. The reason why I suggest a box is that when the lid is closed, being hinged for preference, wind cannot blow the bills off the nails and dirt is kept out. In those cases where the file is hung up in the vehicle office a degree of privacy is ensured ; many people come into the office from time to time, and it is not desirable that they should see how much each member of the staff is drawing in wages and so on.

Now we come to the method of use of this " regular " file. Mark with the name or number of the vehicle each bill as it comes in; this prevents confusion and ensures that each vehicle is debited with its respective costs. In the case of petrol and oil the driver's record is used in conjunction with the bills to allot the correct proportion of fuel, etc., to each vehicle, as, obviously, it is not fair to divide, say, 60 gallons of petrol among five lorries and state they each consumed 12 gallons apiece unless this was actually so.

In the " regular" box described above will be filed the majority of accounts as they are sent in, and this should, therefore, be kept in an accessible position, so that the party responsible can look at a bill, mark it properly, and file it straight away without loss of time.

Now there are the " irregular " items, which should be accommodated in a separate file, again consisting of a box of suitable shape, which can generally be found in most lumber rooms. As the number of bills it contains is so small, there is really no need to bother aUout sectionizing the documents ; they can all be put in there and marked with the name and number of the vehicle to which they refer—the sorting-out can easily be done when the accounts are made out, weekly or monthly. An important part of the " irregular " file is what we may term the guide card which is kept in the box. • This guide-card consists merely of a sheet of paper or cardboard, upon which are stated the proper allowances per mile or per week for use when compiling running costs or standing charges in the case of those items for which no bills will be present in the file. For instance, depreciation can only be represented by some record showing the amount which will be lost on the value of the vehicle concerned per mile of running ; there are no bills which refer to this item. The allowance per mile must be calculated and entered' on the guide bard.

• Receipts are not usually obtained for vehicle licences, therefore an entry on the guide card must be made showing their cost per week or per month in accordance with the system of compiling standing charges. Rent and rates, of course, should be represented by receipts, but the guide card must show the method of division of • the total for the vehicles comprising the fleet. Insurance premiums will be represented by receipts, but the distribution and cost per week should be entered on the guide card, also the amount for loss of interest per week or per month.

All bills which are rightly classified as " irregular " are marked with the name or the number of the vehicle concerned and placed in the box. Now we come to the method of compiling the costs from " regular " and " irregular " files.

By means of these filing boxes the bills are kept in readiness for entering up in the books. Dealing first with the running costs, there is the item of fuel ; all the statements or receipts taken off the nail in the " regular " box which is labelled "fuel" are entered up against the respective vehicles, using the drivers' records as checking media ; lubricants and maintenance are tackled similarly, tyre costs are ascertained from the guide card in the " irregular " box, as is depreciation. These five items comprise running costs ; therefore, the amounts must be added up and the cost per mile can be definitely ascertained.

Turning now to standing charges, licences, rent and rates, insurance and interest are all detailed in the " irregular " box on the guide card, and the only extra item which must be added is that of wages from the " regular " file, and one may then add up the standing charges figure per week or per month as the case may be.

Reverting to the question of filing accounts, there are some payments which may be made In cash or by Cheque, for which no receipt is available for possibly one or two weeks. This naturally leads to the disorganization of the records to a certain extent, and the most simple method of keeping absolutely up to date in this direction is to have a little note-pad in readiness by the " regular " file, so that any money going out may be recorded on a slip, which is put on the nail of the proper section, and takes the place of a formal bill. So soon as the formal bill is returned, the slip is destroyed and the proper docket substituted for it.

By use of this system there is no necessity for constant attention to the books; it is but the work of a few moments to sort out the day's mail, mark up the accounts-in pencil as to which vehicle they concern, and then to impale them on the various nails, all of which have labels, indicating the type of account which they keep, in readiness for the entering up in the books when the owner or the clerk has time to attend to the job.



Organisations: Division of Expenditure

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