A debit and credit ticket and an advice of payment are pre pared for each item handled. The carbon of the letter of advice is filed. The debit ticket is filed alphabetically as to the names of the correspondents to which the items are sent. The credit ticket is filed alphabetically according to the name of the owner of the item. It is, therefore, easy to tell at a glance how much business is being held by a collecting bank, or, when the book keepers come around with their overdraft slips, to tell how much money is in process of collection for any customer and when re turns therefrom may reasonably be expected. When an advice of payment and credit or a remittance to cover is received from the collecting bank, the tickets are taken from the files and sent to the general bookkeeper and the advice of payment sent to the customer. The collection charge is either deducted from the amount of the credit, or charged to the customer either in his account or in a book kept in the note teller's department for payment over the counter.
Discounts handled for the discount department are credited to the Bills Discounted account on the day they fall due and charged to the account of the collecting bank. Discounts re quire special care in the handling. Notes discounted for a cor respondent are in practically all cases sent to that correspondent for collection. Some banks object to having their rediscounts either numbered or indorsed by the bank to which they discount; in such cases the country collection department puts the collection number on a sticker attached to the item.
The Analysis of Accounts The work of the analysis desk or department is primarily cost-accounting, to determine the profitableness of the various accounts. It concerns itself, therefore, with the income and outgo from collection charges arising from the account, the average size of the balance, the interest paid on the balance, etc. For pur poses of explanation, the work may be divided into four heads: i. Accounting the exchange charges.
2. Analyzing the accounts.
3. Watching the balances of accounts.
4. Marking the mail.
I. Accounting the Exchange Charges. Checks received from the various tellers by the transit department go first to the analysis desk so that they may determine what items require an exchange charge upon them. The development of par collec tions has greatly reduced, if not entirely eliminated, this work. Each check is carefully examined and where an exchange charge is necessary, the item is entered upon a sheet provided for the purpose (Figure 24).
If a correspondent forwarded the following checks for collection $3,000 check on the First National Bank of Albuquerque, New Mexico $2,000 check on the American Exchange Bank of Superior, Wisconsin $4,000 check on the First National Bank of Kalamazoo, Michigan $i,000 check on the Market National Bank of Cincinnati, Ohio $3,000 check on the Security Trust Company of Strouds burg, Pennsylvania and the rates of the New York Clearing House as of August 12, IgIS (see Chapter XXXV, page 670), were used, the date on which the charge is made would be entered in the Date column; the city domiciling the drawee (paying) bank, in the second column; the charge, if any, on the Stroudsburg check, in the Discretionary Charge column; the calculated minimum charges, in the next column; the amount of the Cincinnati check in the "I/40" column, of the Kalamazoo check in the "1/2o" column, of the Superior check in the "t/To" column, and of the Albuquerque check in the "1/8 " column; and the check is entered in the proper column according to the number of days required for collection.
The exchange on this batch of checks would be 1/4o per cent of $1,000, 1/2o per cent of $4,000, i/ro per cent of $2,000, 1/8 per cent of $3,000, if the minimum rates were charged.
Monthly footings arc made of the Minimum Charge column, and the amount represents the exchange charge to the customer for that period. A statement of the daily charges is made up and serves as the voucher from which the charge is made to the customer's account, such statements being either mailed to the customer or filed with the canceled checks. When a customer wishes to pay the exchange in cash, an entry of the amount is made in a book kept by the note teller, and he receives the payment for it.
2. Analyzing the Accounts. Cost accounting is fast attaining a scientific basis in most lines of business, but in banking it has made relatively little headway with respect to determining the profitableness of accounts. The common objections to adopting a complete and exact system for banks are: (a) Its cost is not an economical expenditure.
(b) Accounts are likely to grow into profitable ones, or ac counts which are unprofitable so far as direct financial returns are concerned may be profitable because of their influence in getting or keeping other profitable accounts and because of their advertising value.
(c) A bank is so highly complex that it is impossible to al locate, with any degree of exactness, the overhead and general expenses among the departments and the customers.