Some accountants advocate placing in stock all goods received for whatever purpose and then charg ing them as they are issued. This is unnecessary. Where goods are ordered for special purposes it is much more direct to charge them at once according to those purposes. The order should specify for what they are to be used and where, so that the receiving clerk may be able to forward them to the proper de partment at once with a minimum amount of handling and delkt.
5. Receipting for goods.—There are two methods of issuing receipts for goods received. One is to give a formal receipt to the person making the delivery. This receipt gives the order number, the date when the article was received and a description. A carbon copy is sent to the purchasing department. The sec ond method is to O. K. and return the stock room copy of the original purchasing order. The second method would appear the better, especially in small concerns, in that it reduces the clerical worry in regard to both receiving and checking bills. The practice is, how ever, divided. One company, for instance, uses the original order in its electrical department, but inde pendent receipts for its general purchasing.
The second source of supply is the manufacture of goods for stock. The production order should cover this class without any additional formalities. The third source is unused materials returned by work men. Credit memoranda should be issued for this class of receipts. They should be distinguished from requisitions by the color of the paper or of the print ing. A common custom is to use red ink for all credit items so as to prevent confusion.
6. Issuing supplies.—Tools, as a rule, are easily distinguishable from materials ; but they run together in such articles as brushes, files and rubber boots. Altho generally considered as tools, these articles are worn out so quickly that many managers invariably classify•them as materials and charge them out as such. Each of these three classes of goods—mate rials, tools, consumable tools—should be distinguished and issued accordingly.
7. Haze) to use requisitions.—There are two princi pal systems of issuing materials. The first corre sponds with banking practice. If a depositor wishes cash at a bank he must issue a "counter check" on the paying teller. This is the requisition system. The storekeeper issues stores on the presentation of a regu lar order or requisition signed by any responsible per son (Figure 23). In office stockkeeping it is often
advisable to combine the requisition with the stock ledger by providing columns in the ledger for the name of the person authorizing issue and for the sig nature of the receiver. This lessens the clerical work and since all office supplies are charged to expense there is no object in charging the items separately.
8. Bill-of-materials.—The second method is to issue the materials called for by a bill-of-materials prepared by the designing or the production department. This has the advantage of more closely meeting the actual requirements and so conserving material. It assists the storekeeper in keeping up his. stock and preparing for future requirements. It lessens the accounting because it eliminates the listing and totaling of many small individual requisitions.
9. Combination systems.—Other systems, however, use a combination of these two methods. The bill-of material should generally be used, with the requi sition as the flexible element to meet emergencies and to offset clerical errors in bills. Some managers think it is better policy to issue material when it is called for by a responsible department foreman, and to adjust later any discrepancies between bills-of-material or other specifications and the foreman's statement as to his requirements. Under no circumstances should production be stopped pending ad justment of tech nicalities as to quantity of material.' If a foreman is to be held responsible for results he must be given a certain amount of freedom. Under either method the man actually receiving the materials should be re quired to sign for them so that he may be expected to explain any overissue which may occur.
To secure a new consumable tool the workman must return the worn-out tool that he has. To get a new brush, for instance, he must return the old one ; to get a new pair of boots he must return the worn-out pair. This plan prevents the workman's being able to get new tools from the storeroom any time that he loses his old ones, and also gives the purchasing department a basis for judging the wearing quality of the goods. Replacement of defective materials and issuance of materials on account of spoiled work should be made by this method.