Goods on Approval.—With regard to goods sent out on these should not be passed through the triplicate clay-book, but should be recorded in a special book ruled to show 1. Date of the transaction ; 2. Name and address of customer ; 3. By whom sent ; 4. Details ; and provision should be made for the particulars relating to the return of the goods as 5. Date returned ; 6. By whom received ; 7. Date charged to customer ; 8. Number of slip ; 9. General remarks.
Where the goods are returned within the time specified the entry in the approval book would be cleared by the insertion of the particulars of the return, but in those cases where the customer decides to retain the goods they should then form the medium of an entry in the triplicate day-book, and be charged to the customer's account, the entry being cleared in the approval book as indicated, and the number of the triplicate invoice placed for reference purposes in the column provided. • • Where the customer decides to pay cash for the goods which are so retained, the entry in the approval book needs to be cleared by a slip being made out, the cash being accounted for by the till record, or the central cash office, in the usual way, in order to carry out the system of not permitting. goods to leave the establishment without they have been passed through the triplicate system.
Where entries of this nature are very numerous, a memorandum ledger should be kept on the same lines as the approval book outlined above, so that a quick reference to the goods held on approval by any particular customer may be facilitated.
Small Accounts.—Where there is a large number of customers' accounts to be handled, which do not warrant the opening of separate ledger accounts, one or other of the following methods might, with advantage, be adopted.
2. A self-indexing arrangement, where a copy of the actual invoice is filed until payment is made, when it is removed.
Under this system the sales are treated as cash transactions, the filing method being merely a matter of memoranda, except at balancing periods, when the accounts remaining on the file unpaid would be added to the sales for the period, and carried to the balance sheet on the "assets" side as amounts due from sundry debtors.
Alternately, the file may be used exactly as an ordinary ledger on the loose-leaf principle (see ACCOUNTING SYSTEMS), the items being folioed from the day or charge book, and settled accounts removed to a binder if necessary.
3. Duplicate forms of customers' invoices are placed in large-sized envelopes, the front of which bears the ordinary ledger ruling, and to which the details are posted. Each envelope represents one customer, and by
means of a card-index is available for easy reference.
• 4. A pass-book, with duplicate leaves, is provided for each customer, and entry is made ni the pass-book at the time of the transaction. Top copy next transaction until payment is made. Unpaid accounts are journalised at the end of every month, and carried to accounts opened in the personal ledger. Accounts paid during any month are treated as cash transactions.
5. Each customer purchases a book of coupons which arc intended to be used in payment of subsequent purchases, thus reducing all transactions to the level of cash sales.
6. A running account with each customer is kept in the form of a long bill-head, debits being derived from duplicate sale slips, or whatever the charging source may be. Unpaid accounts are journalised monthly, being debited to an account called "January sales," or whatever month is under review, and credited to " sales" account in the nominal ledger. Cash received during the month would be treated as cash sales, and if received after the journalising already referred to, would be credited to "January sales" account.
Nos. 3, 4, 5, and 6 are American in origin, and there are many obvious objections to each of them, but as they are not likely to be generally adopted in this country any criticism which might be offered would probably be con sidered superfluous.
No. 2 is undoubtedly the best for all practical purposes.
Returns.—After considering the question of sales, the most natural subject upon which to touch in consecutive order is the que:ition of returns made by customers, and allowances made to them in connection with their accounts. All returns should be recorded in a separate book showing the date, name and address of customer, particulars of goods, and the value, which should be posted to the credit of the customer's account in the personal ledger, the totals being carried weekly, monthly, quarterly, or half yearly, to the debit of "returns account" in the nominal ledger. These entries are, of course, really deductions from sales, and might be debited to that account, but they are usually, and preferably, recorded in a separate account so that the gross turnover may be kept fairly distinct. Allowances may be similarly treated, but some responsible person should be detailed to pass such items and be responsible for their accuracy.