22 



The Florists^ Review 



Jdlt 16, 1920 



carried on, the profit on the contract — 

 which is the difference between the cost 

 of the operation (whether in material, 

 labor or other expenses) and the price 

 charged the customer — is credited on 

 the ledger sheet on the right-hand side 

 and placed under this income section. 



"Interest on bank balances" (Ac- 

 count No. 22). — This is the amount 

 which your bank allows for average 

 cash balances. It is placed on a ledger 

 sheet and credited on the right-hand 

 side under this section, from your check 

 book. 



"Discount on merchandise purchased" 

 (Account No. 23). — This item is self- 

 explanatory. Rarely does a merchant 

 who discounts his bills find his way into 

 financial trouble. The bills discounted 

 are carefully noted in the check book 

 and the amount of discount is credited 

 on the right-hand side of the ledger 

 sheet and filed in this classification. 



"Items of income not classified" 

 (Account No. 24. — All income that the 

 business may produce which could not 

 properly be placed in the other income 

 classifications, should be entered in this 

 section on the right-hand, or credit, side 

 of the ledger sheet. 



The Exi>en8e8. 



We are now up to the fourth and last 

 section in the books of entry or ledger, 

 known as the expense section. 



In this division, accounts or ledger 

 sheets are opened for items of expense 

 suitable to the business in which the 

 merchant is engaged. These expenses 

 are generally outlined in the 'second 

 table (accounts 30 and upward). 



At the time when bills are entered 

 for expenses incurred or bills are paid, 

 they are marked for posting under any 

 one of these accounts, as will be re- 

 ferred to under another paragraph. 



The expenses, when deducted from in- 

 come at any time, give the net profit 

 for the period, and when books are 

 closed for the period, this net profit is 

 transferred to "capital," account No. 

 15. 



The Journal Section. 



Another section of the book is the 

 journal section. In this section on one 

 sheet, for instance, there will be entered 

 bills received for goods purchased, after 

 they have been corrected as to price and 

 quantity. 



The name of each concern, date of 

 bill, amount thereof, is entered. Each 

 such creditor's bill is entered from this 

 journal sheet to his account in the lia- 

 bilities section of the record book on 

 the right or credit side. The total of all 

 the merchandise bought is charged or 

 entered monthly, on the left-hand side, 

 or debit side of merchandise account 

 No. 2. 



The Check Book. 



We will explain briefly the use of the 

 check book, with which all men in busi- 

 ness are familiar. This book may be 

 as simple or as elaborate as your busi- 

 ness will justify. 



We will assume that the merchant 

 has a check book. 



It is extremely important that every 

 dollar actually received from any source 

 whatever be deposited in the bank to 

 the credit of the business and that the 

 deposits be made daily, writing the 

 name of the maker of the check, the 

 amount and bill or item being paid, on 

 the back of the stub. 



Another principle, quite as important, 

 is, that all items, no matter how small, 

 be paid by check, and all information 

 about the check issued should be re- 

 (iorded on the stub. 



If the merchant follows the method 

 Inscribed in the two preceding para- 

 graphs, his bank really helps to prove 

 ins account in so far as his cash is con- 

 cerned. Have your bank book balanced 

 monthly. 



Cash received from customers must 

 not be used for expenses. It should be 

 deposited. When cash is needed for 

 petty expenses, such as postage, car- 

 far?, etc., a check for the exact amount 

 needed should be drawn from the bank 

 by check. 



Crediting Items. 



From the back of the stub of the 

 check book — the deposit side — items re- 

 ceived are credited to the right side or 

 credit side in the account book. 



If a customer pays his bill, the amount 

 is to be credited to that customer un- 

 der the asset section. 



If money is borrowed from the bank, 



Every Florist 



Has hit upon Ideas 



that have made Money 



for Him. The Spread 



of such Ideas through 



the Trade makes Progress. 



P^. 



^3/J^ 



Is the medium for spreading those 

 money-making ideas. Tell the trade 

 about yours. Contributions on any 

 subject relating to the trade are 

 always welcomed by the Editor. 



The way they nre written is not so 

 lni|K)rtant as the Ideas they convey. 

 Write as yon would talk. 



the amount must be credited to liabili- 

 ties, under "Borrowed from banks." 



On the other side of the check book, 

 all payments that are made must be 

 posted on the left-hand side, or debit 

 side of the ledger, under proper heading 

 or account. 



If a bill is paid for merchandise pur- 

 chased, it must be charged to that cred- 

 itor and not to merchandise, because it 

 has previously been charged to mer- 

 chandise in the journal. 



At the end of any desired time, when 

 a balance of the ledger is taken — it 

 should be on the last of every month 

 — the total cash received, as it appears 

 in the check book, should be posted in 

 the ledger under "Cash Account No. 

 19," on the left-hand side. 



Tho total payments, as determined 

 from the check book, should be posted 

 in the same account on the right-hand, 

 or credit side. The balances in the ac- 

 counts will then agree with the balances 

 in the check book. 



Any merchant, we feel reasonably 

 sure, can understand the nature of the 

 books we have suggested and described, 

 and the uses to which they are to be put. 



Tho entire bookkeeping system is 

 comprised within the ledger under four 



divisions. These divisions and the ac- 

 counts they contain, when grouped to- 

 gether on the expiration of a given 

 period, will show where the business 

 enterprise is heading, whether or not it 

 is making a profit and whether the net 

 worth or capital is increasing or de- 

 creasing. 



Using Files. 



Letter-size files should be used, such 

 as the following: 



File No. 1 — Amount owing for 

 merchandise. 



File No. 2 — Merchandise bills 

 paid. 



File No. 3 — General correspond- 

 ence. 

 The use of the folders in which to 

 place all correspondence with one firm 

 is suggested. 



All unpaid bills for merchandise 

 bought from Blank & Co. are placed in 

 one folder, and all unpaid bills for 

 merchandise bought from John Doe ft 

 Co. are placed in another folder, and 

 these folders are filed alphabetically in 

 File No. 1. 



When these bills are paid, they are 

 to be filed alphabetically in one folder 

 in File No. 2. 



All correspondence from or to any 

 particular customer, individual, credi- 

 tor, etc., is filed in file No. 3, so that if 

 the correspondence of Blank ft Co. is 

 desired, it will be found in one folder — 

 letters to them, from tnem, etc. 



Files are increased as the number of 

 folders multiply. 



Benderlng Bills. 



Bills rendered to customers for goods 

 purchased, or jobs completed, are al- 

 ways to be written or typewritten in 

 duplicate. The original goes to the cus- 

 tomer and the duplicates should be filed 

 according to date in a loose-leaf binder, 

 which can be purchased from any sta- 

 tioner. 



From the loose-leaf binder, the cus- 

 tomer is charged with the amount of 

 the sale under account No. 3, "Ac- 

 counts owing from customers," by plac- 

 ing the amount on the left-hand side of 

 the customer's ledger sheet. 



Each bill should be given a number, 

 and that number is always recorded in 

 the ledger in order to furnish an easy 

 reference to any particular bill with 

 which the customer may be charged. 



Watch Credits. 



You will want to exercise the greatest 

 of care in extending credit and in giv- 

 ing goods to your customers on credit. 



The books will tell you how much 

 each man owes you, and it is easy to 

 call a halt when too much is owed by 

 any particular customer. 



Collections are helped, because the 

 accounts are always up-to-date and the 

 amount of overdue is easily ascertain- 

 able, and one is pressed to get in the 

 caah to keep things moving. 



The system outlined above, if adopted, 

 will, it is conscientiously believed, se- 

 cure the accuracy needed in conducting 

 your business. 



GOIJ)EN RULE IN PRACTICE. 



"I heartily agree with George Haas, 

 of Meadville, Pa.," said F. H. DeWitt, 

 of F. H. DeWitt & Co., Wooster, O., "in 

 his opinion as expressed in The Review, 

 touching the subject of the golden 

 rule, as applied to its practice among 



