PROBLEMS OF COOPERATIVE MARKETING ASSOCIATIONS 31 



A recent study by the United States Department of Agriculture 

 of the causes of failure among cooperative associations indicates 

 that of 927 associations reported as failing or suspending operations 

 in the 11-year period, 1913-1923, 114 or 12.3 per cent gave " inade- 

 quate accounting system " as the sole or one of the causes of their 

 troubles, and 103 or 11.1 per cent, attributed all or part of their dis- 

 tress to " lack of proper audit." It would probably be more accurate 

 to attribute the difficulties of these associations to poor management, 

 or other causes, which an " inadequate accounting system," or " lack 

 of a proper audit," kept hidden from the directors and members. 

 But this only emphasizes the need of improvement in bookkeeping 

 and accounting methods. 



Efficient bookkeeping and accounting systems furnish the manager, 

 and through him the board of directors, with accurate, detailed 

 information regarding the operation of the association from a busi- 

 ness standpoint. Likewise efficient accounting systems minimize 

 errors and omissions, speed up transactions of business, provide 

 records for future reference, and instill confidence among the mem- 

 bers and the trade by promptness and accuracy in all transactions. 

 Furthermore, with carefully kept records and frequent audits, the 

 possibilities of actual dishonesty on the part of persons connected 

 with the association are greatly minimized. The preparation of 

 proper income-tax reports, cost statements of both production and 

 marketing services, wage scales, and, in fact, the whole operation of 

 the business demand accurate records. Such records uniformly 

 kept from year to year furnish comparable material for judging the 

 progress of the association. 



Among fruit and vegetable associations considerable improvement 

 in bookkeeping and accounting has occurred in the past few years. 

 Increased volume of business has made possible the employment of 

 more capable managers who have realized the necessity of accurate 

 records, and the hiring of more capable employees. 



ESSENTIAL KECOEDS 



Systems and forms of records in use by fruit and vegetable organ- 

 izations differ in methods, elaborateness, and scope, with the size 

 of the organization, the products handled, and the special needs and 

 ideas of both the manager and the personnel in charge of the work. 

 There are several so-called " standard " systems offered but most 

 of these require changes, especially in the forms used, to render 

 them adaptable to the needs of particular organizations. For that 

 reason it is not proposed to offer any particular system, but rather 

 to point out the essentials of any adequate system of accounting for 

 fruit and vegetable cooperatives. 



The general requirements of any organization may be divided into 

 the following groups: Commodity records, general records, and 

 statistical reports. These will be briefly described as to nature and 

 sequence of use. 



COMMODITY RECORDS AND FORMS 



Commodity records and forms follow the product from receipt 

 at the packing-house door to payment of the grower by check. 



