Edward Brown--Introduction to Business Management

7/28/2019 Edward Brown--Introduction to Business Management

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3SMANIA UNIVERSITY LIBRARYnN.

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INTRODUCTION TOBUSINESS MANAGEMENT


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OFFICE ORGANIZATIONAND MANAGEMENTIncluding Secretarial Work.By the late LAWRENCE R. DICKSEE, and SIR H. E.BLAIN. Twelfth Edition by STANLEY W. ROWLAND,LL.B., F.C.A.In demy 8vo, cloth gilt, 326 pp. 7s. 6d. net.OFFICE ADMINISTRATIONFOR MANUFACTURERSThe Principles of Organization and Their Practical

Application in the Case of Manufacturing Companies.By R. A. MILLS, A.M.I.E.E., A.M.I.Mech.E.In demy 8vo, cloth, 408 pp. 10s. 6d. net.MODERNOFFICE MANAGEMENTGeneral Principles of Office Organization and Adminis-tration and Their Practical Application.By H. W. SIMPSON.In dorny 8vo, cloth, 312 pp., illustrated. 7s. 6d. not.Third Edition.GUIDE FOR THECOMPANY SECRETARYA Practical Manual and Work of Reference for theCompany Secretary.By ARTHUR COLES. Fifth Edition by W. CECIL WOOD,A.C.I.S.In demy 8vo, cloth gilt, 518 pp. 6s. net.

PRACTICALSECRETARIAL WORKA Treatise on Secretarial Routine for the Examinee andCompany Secretary.By HENRY I. LEE, A.C.I.S., and WILLIAM N. BARU.In demy 8vo, cloth silt, 406 pp. 7s. 6d. net.PITMAN


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INTRODUCTION TOBUSINESS MANAGEMENTA HANDBOOK ADDRESSED PARTICULARLY TO

SECRETARIES OF INDUSTRIAL CONCERNS, ANDCOMMERCIAL STUDENTS

BYEDWARD BROWN, F.C.I.S.VICE-PRESIDENT OF THE'^mRMINGHAM BRANCH OF THECHARTERED INSTITUTE OF SECRETARIES

LECTURER IN SECRETARIAL WORK AND PRACTICE,CITY OF BIRMINGHAM COMMERCIAL COLLEGE

LONDONSIR ISAAC PITMAN & SONS, LTD.

1930


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SIR ISAAC PITMAN & SONS, LTD.PITMAN HOUSE, PARKER STREET, KINGSWAY, LONDON, W.C.2THE PITMAN PRESS, BATHPITMAN HOUHF, LITTLE COLLINS STREET, MELBOURNEASSOCIATED COMPANIES

PITMAN PUBLISHING CORPORATION2 WKST 45TH STREET, NEW YORK2O5 WEST MONKOE STREET, CHICAGO

SIR ISAAC PITMAN & SONS (CANADA), LTD.(INCORPORATING THE COMMERCIAL TEXT BOOK COMPANY)PITMAN HOUSE, .^Sl-jSj CHURCH STREET, TORONTO

MADE IN GREAT BRITAIN AT THE PITMAN PRESS, BATHC9 (B.342)


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PREFACETHIS book has been written in an endeavour todeal from a practical standpoint with the day-to-day problems which arise in the life of the manwho is called upon to organize and control thecommercial side of an industrial company ofmedium size not so large, on the one hand, asto require a highly skilled specialist in charge ofeach department, nor so small, on the other hand,as to be capable of management by personal andvisual methods without any formal or writtensystems worth mentioning. In writing it I havehad in mind primarily the secretary who is calledupon to act more or less officially as commercialmanager of his company, and there are verymany in medium-size concerns; but I hope thatit will be found equally helpful by businessmanagers of other types, and also by students,many of whom have little opportunity of obtainingpractical knowledge of commercial office routine.

It may perhaps be thought that some of thequestions dealt with are of a somewhat elementarycharacter ; but in my experience it is just theneglect of detail of this description which oftenspoils the effective working of an otherwise soundscheme, and I have consequently tried to coverthe minor points which are so frequently over-looked when drawing up a general outline of officecontrol.

In order to concentrate on the practical aspect


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6 PREFACEof the matter I have drawn most of the illustra-tions from my own experience and from theindustry in which I have been engaged for manyyears; but the principles involved are equallyapplicable to most industrial concerns, and themethods indicated can be easily adapted to therequirements of any particular business.

E. B.


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CONTENTSCHAP. rAOFPREFACE ..... 5

I. THE SECRETARY AS ORGANIZER . , 9II. CORRESPONDENCE . . . -13

III. ORGANIZATION OF CORRESPONDENCE . l8IV. CORRESPONDENCE SECRETARIAL ANDESTIMATING DEPARTMENTS . . 22

V. FOLLOWING UP .... 33VI. FILING ...... 38VII. THE ORDER DEPARTMENT . . - 45VIII. DISPATCHING AND INVOICING . . 51IX. THE ACCOUNTS DEPARTMENT . . 58

X. THE BUYING DEPARTMENT . . 72XI. OUTSIDE REPRESENTATION . . 79XII. ADVERTISING . . . . .89XIII. WAGES AND COSTING . . .96XIV. INSURANCE ..... 107XV. LABOUR-SAVING DEVICES . . . Il6XVI. STAFF RELATIONS .... 128XVII. BOARD MEETINGS .... 138XVIII. GENERAL MEETINGS.... 145INDEX ...... 153


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10 INTRODUCTION TO BUSINESS MANAGEMENTthese different executives to be carried out by theproprietor or managing director without anydivision into departments at all. There are a verylarge number of companies of this type, wherethe secretary acts practically as commercialmanager or assistant to the managing director,and is responsible, more or less officially, for theorganization and management of the greater partof the commercial side of the undertaking, some-times holding rather more than a watching briefin respect of the works as well. In such cases theorganizing capacity and general business ability ofthe secretary are likely to be called upon to a veryconsiderable extent, and he has to cope withproblems and difficulties which are rarely touchedupon in the ordinary secretarial textbooks.His difficulties are increased by the fact thatmany of the matters with which he has to dealconcern technical questions with which in manycases he has only a general acquaintance. Thesecretary of an engineering company, for instance,is not likely to be a trained engineer, nor to becapable of deciding points involving an up-to-dateknowledge of engineering standards and practice.In the course of his experience he will probablyhave picked up a good deal of general engineeringknowledge, and may be familiar with the practiceof his own company in regard to questions whicharise fairly frequently in the ordinary run of thebusiness ; but he is seldom equipped with know-ledge of the formulae for calculating strains andstresses, for example, or the expansion and con-traction of metals, not to speak of the numerousfar more abstruse

pointswhich are everydaymatters to the trained mechanical or electrical


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THE SECRETARY AS ORGANIZER IIengineer. In such cases he is bound to leave thedecision of the question to technical advisers ofthe company, and confine his energies as far aspossible to the general matters of organization andmanagement which are his special function.

It is hardly necessary to point out, in this con-nexion, that the secretary is, or should be, primarilyan organizer. The most brilliant individual with-out organizing capacity is of very little use atthe head of the staff of a concern of any con-siderable size. The limit of capacity of any oneman, however clever and industrious, is soonreached ; and unless he can work with others, andimpel them to work together for him, the burdenwill eventually prove too heavy for his shoulders.This is an essential point to bear in mind. It is toooften overlooked that it is not so much what aman can do himself, but what he can arrange forothers to do, which counts in administration.

For this reason it is always desirable for thesecretary to keep himself free from the burden ofmatters of detail ; to pass on to others all items ofroutine as far as possible, and to devote his timeto the far more important task of seeing thatthings are done promptly and efficiently, andthinking out ways and means of doing them better.It is often hard to overcome the feeling that onecan do a particular thing more efficiently thananyone else available for the job ; but to yieldto this idea often a perfectly correct one usuallymeans that while the task in question may per-haps be done better, many other things willcertainly be done worse, simply because there is notime to look after them. In these days of indus-trial complication and rush, efficient organization


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12 INTRODUCTION TO BUSINESS MANAGEMENTis imperative. The competent secretary is theman who can go away for a holiday and find thatduring his absence everything has gone on prac-tically the same as when he is in daily attendance ;the machine is well oiled and equipped, and canbe left for a reasonable period without personalsupervision.In the following pages an effort will be made tooutline methods of organizing the commercial sideof an industrial concern which will give this result.Needless to say, it is impossible to lay down anyhard-and-fast rules which will apply to allbusinesses. The enormous variety in size andtype of industries and factories would in itselfsuffice to render any such attempt worse thanuseless, in addition to which it must be borne inmind that efficiency in organization often resultsfrom the adoption of methods peculiar to the men-tal equipment and faculties of the individual con-cerned, and that one man's meat is another man'spoison in this respect as in so many others. Forthis reason it is the aim of the author to dwellupon principles rather than details upon ends tobe attained rather than upon the means adoptedto attain them. Illustrations of means will begiven, but they should be considered purely asillustrations and not as essential to the main pur-pose, viz. the attainment of an organization whichshall be adequate and efficient for the needs of amanufacturing concern of medium size and averageequipment.


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CHAPTER IICORRESPONDENCE

THE handling of correspondence is in practicallyall companies the primary duty of the secretary.This does not mean that he should personally dealwith the bulk of the letters, although many secre-taries interpret their duty in this way, to theinjury of other sections. In accordance withthe principle already laid down, the secretaryshould keep himself free from the burden of pettycorrespondence as far as ever possible ; the fewerletters he writes himself, the better the work asa whole is likely to be carried out. The respon-sibility for the correspondence, however, is cer-tainly his; and this is a sufficiently heavy one,when it is borne in mind that most of the peoplewith whom his company deals will know it onlythrough letters, and will judge it by that test justas an individual judges a man at a personal inter-view. The tone, appearance, and general qualityof a business letter all make their due impressionon the mind of the recipient ; and it is for thesecretary to see that his company's correspondenceis such as will do it credit and maintain or increaseits business.

Before dealing with the points to be observedin the composition and typing of letters it may beas well to touch upon the method of handlingcorrespondence in general ; and we may commencewith the receipt of the morning mail, which usuallycomprises the bulk of the incoming correspondence.The first task in this connexion is the opening13


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14 INTRODUCTION TO BUSINESS MANAGEMENTand sorting of the post ; and in arranging for thiswork it should be borne in mind that unless theletters are in the hands of the various departmentalheads promptly on their arrival, time will be lostwhich will result in a serious wastage in the earlypart of the day, with probably an equivalent rushin the late afternoon. It is therefore desirable forsome members of the staff to arrive before theusual office hours to open and sort the letters, sothat this part of the work may be finished by thetime of arrival of the staff generally. This can bedone by appointing certain people to come earlyfor the purpose, giving them either extra paymentor some time allowance at other periods of theday ; or, as an alternative often adopted, arrangingfor members of the staff to take it in turns tocome early, so that all share equally in this duty.The latter course has the advantage of obviatingspecial financial arrangements or invidious dis-tinctions ; on the other hand, this task, like mostothers, is done best by people who do it regularlyand become thoroughly familiar with it, and thesorting in particular will probably be done morequickly and efficiently if generally carried out bythe same persons. Whichever method is adopted,the principle of early post-handling should beadhered to, as the saving of time effected by it isvery considerable.The actual opening of the letters, like most otherthings in business, can be done mechanically ifdesired, as there are several machines on themarket which will open envelopes very rapidlyand efficiently. It is doubtful, however, whethertheir use is justified in such cases as we have inmind, where the number of envelopes may be


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CORRESPONDENCE 15two to three hundred per day, of which probablyone-third will be open. In any case it will benecessary for a senior clerk to run through themail to pick out any private correspondence, andthe remainder can then be dealt with eithermechanically or by hand as the case may be.The number of divisions into which the lettersare sorted will depend upon the size and characterof the business and the number of departmentsinvolved. The following may be suggested as abasis: (i) Managerial and secretarial; (2) Ac-counts; (3) Buying; (4) Estimating (probablysubdivided into two or three sections) ; (5) In-voicing and Dispatch; (6) Works; (7) Orders.This will probably mean about ten divisions in all.It is easy to obtain sorting racks of either wood ormetal which will enable the letters to be handledin a comparatively small space within easy reachof those concerned ; and with clerks who are usedto the work it should be possible to open and sortan average mail in twenty to thirty minutes.The sorting completed, it is for the secretary to

decide whether the letters shall go direct to thedepartments concerned or be subjected to a pre-liminary examination. The latter course is pre-ferable, at all events as far as the more importantsections are concerned.The works letters will probably contain anumber of complaints, most of them minor ones

dealing usually with questions of delivery, butsome perhaps important enough to justify thepersonal attention of the managing director or thesecretary. To pick out anything of this naturetakes only a minute or two ; and such letters canbe transferred to the secretarial division and the


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l6 INTRODUCTION TO BUSINESS MANAGEMENTrest sent through to the works in the ordinarycourse. It is advisable to have the order numbersmarked on all letters relating to orders already inhand before they are sent to the works, as thelatter are not usually in a position to tracfe themdirect from the customer's reference.

It is also worth while to run through the ordersreceived so as to get an idea of their contents, tosee that any of special or urgent importance receiveprompt attention, and to note any points relatingto onerous conditions or questions of credit whichmay arise.A glance at the inquiries for the various esti-mating sections is informative as to the generaldemand for the company's products and alsogives an opportunity of dealing specially with anyparticularly important matter ; and the travellers'reports and letters from customers in regard tooutstanding quotations also merit examination, sothat the estimates may be got out and investigatedand revised figures submitted by wire or telephoneif necessary. The buying department's letters arethe last to receive attention; the whole of thecorrespondence can then be sent round to itsrespective recipients, and the routine work of theday begun.

It is often suggested in textbooks that a letterregister should be kept, in which every com-munication received should be entered, and bywhich its progress can be traced until it is finallydisposed of. Such a practice may be justified incases where neither time nor money is of anygreat moment ; but in a busy commercial office,where speed is essential and overhead costs anever-present burden, it is hardly possible to carry


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CORRESPONDENCE 17it out. Theoretically such a record may be bothdesirable and useful ; in practice it is an additionto the morning's work which is not justified byresults. In the writer's experience it is veryseldom that a letter fails to receive attention oris lost, although isolated cases do occur at in-frequent intervals; and the time and labour in-volved in entering every letter in a register wouldbe out of all proportion to the value of the checkit would afford.The letters should of course be marked with a

date stamp, either when opened or when receivedin their particular department ; this is important,as questions involving this point arise fairly often,and it is as well to have definite evidence available.The secretary is now in a position to go throughthe comparatively small amount of correspondence

requiring his personal attention, and to get to-gether any information necessary for decidingpoints in question or discussing matters of policywith the managing director or other executive;and here we may leave him for the moment toconsider the general correspondence organizationof the office.

2 (.342)


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CHAPTER IIIORGANIZATION OF CORRESPONDENCE

THE first point to consider in this connexion iswhether there shall be a central correspondencedepartment dealing with all letters sent out, orwhether each departmental head shall handle hisown letters. There is much to be said for bothmethods. A central correspondence section undera capable head correspondent should be highlyefficient, as it deals only with this branch of workand specializes in it accordingly; it should avoidany overlapping, and prevent different lettersfrom being sent out on the same day about thesame matter ; it should preserve a uniform methodand style of correspondence and carry it throughquickly and without gaps and rushes. On the otherhand, the departmental head feels much moreresponsibility for his actions if he carries themright through to the end ; he knows all the detailsof the matters he deals with, and can dictate theletters in full in very little more time than it takesto make notes of them for the use of the corre-spondence department ; and where complicatedtechnical questions are concerned, it is almostimperative that the executive writes about thempersonally. On the whole, the writer's opinion isthat in an engineering or industrial concerndepartmental correspondence is preferable, if notessential.Another question of importance is that ofmechanical handling of dictation by means of oneor other of the various dictating machines which18


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ORGANIZATION OF CORRESPONDENCE 19are on the market. These differ in detail, but areall based on the same principle, viz. that of afford-ing a means of dictation on to a wax cylinderwhich can be passed to the typist, who "listens-in" to the cylinder and types the letter directfrom it without the necessity for shorthand notes.For the sake of those who have had no experienceof dictating machines, the procedure may beoutlined briefly as followsThe letters and other material should begathered together and gone through beforehandso that dictation, once started, can proceed con-tinuously. A circular wax cylinder, tapered inside,is pushed on a metal mandrel shaped to receive it.A numbered scale parallel with the cylinderenables any point on it to be readily identified,and a printed pad similarly numbered provides ameans of noting where letters begin and end,where corrections are made, and any other com-ments which may be necessary. The machine isrun by a small electric motor, and can be con-nected either to a special plug or to the ordinarylighting system. A thumb-piece attached to thespeaking tube enables the motor to be started andstopped at will. The dictator speaks into a glassmouthpiece fitted with a removable sanitaryfilter. As each letter is finished the papers areturned over in order and a line drawn on the padat the number shown on the scale, so that thetypist may know the length of the communication.Each cylinder as finished is put back into its casewith the leaf from the pad relating to it ; and thewhole of the correspondence, with the cylinders,is passed out to the typist when complete.So much for the dictator's part of the work.


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20 INTRODUCTION TO BUSINESS MANAGEMENTThe typist's part is fairly simple. The cylinder isplaced on a similar metal mandrel on the tran-scribing machine, to which a pair of earphonesare connected. The machine is run electrically,and the pace can be adjusted by setting a knurleddisk, so that the dictation is reproduced at anydesired speed. Further, a foot-button enables themachine to be stopped and started at will. Thecorrespondence and dictation pad are placed so asto be easily visible, and the typist listens-in to asentence and then types it, and so on to the endof the letter, keeping a sharp eye on correctionsand notes on the pad.Another question calling for decision is whethercertain typists shall be allotted to certain dic-tators, or whether the work shall be pooled andhandled by any girl who is at liberty. The writerprefers the first method as a general principle, asthere is no doubt that a typist becomes accus-tomed to an individual's manner and phraseology,and in an engineering works especially differentdepartments have their own technical terms whichmust be mastered if the work is to be done in-telligently. At the same time, an unduly strictadherence to this practice results in an unevendistribution of work, as some girls may be prac-tically idle while others are overwhelmed withletters. To overcome this, it should be clearlylaid down that while one particular girl may begiven a particular man's correspondence in thefirst instance, subsequent work coming in whileshe is busy shall be taken over by one of the others,so that the strain may be equalized as far aspossible. With a little give and take in thisdirection it is fairly easy to organize the work so


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CHAPTER IVCORRESPONDENCE SECRETARIAL AND

ESTIMATING DEPARTMENTSTHE two principal correspondence departments arethe Secretarial and the Estimating; and thehandling of correspondence by these two sectionsmay now be dealt with.SECRETARIAL CORRESPONDENCE

If we take the secretary's own correspondencefirst, the primary essential to bear in mind is thatit should be as small as possible. All routine lettersshould be dealt with by the departments to whichtheir contents relate, and the secretary himselfshould transact only correspondence appertainingto questions of policy, private matters affectingthe appointment, salary, or duties of members ofthe staff, agents, travellers, etc., legal questions,overdue accounts, financial matters, or complaintsof a serious nature. There will also be a certainamount of correspondence affecting trade organiza-tion and important questions of principle emanat-ing in the first instance from the Board or themanaging director which it will be necessary to keepin his own hands, besides letters relating to sharematters, transfers, dividends, etc. Advertisingmatters, too, will probably fall to his lot. Speakinggenerally, however, his personal mail should notbe heavy, as it is imperative to keep himself asfree of detail work as possible if proper attention isto be given to the organization and supervision ofthe commercial side of the business as a whole.


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24 INTRODUCTION TO BUSINESS MANAGEMENTSome firms avoid any trouble in these matters

by adopting the maxim "The customer is alwaysright," and giving in to every claim made againstthem on the ground that it is good business to doso. This is carrying matters to the other extreme,and is liable to prove very expensive, especiallywith unscrupulous buyers ; and the golden mean,though more difficult to decide, is a safer and moreeconomical course to adopt. For these reasons itis often advisable for the secretary to deal per-sonally with such questions, as having no respon-sibility for technical details of production on theone hand, and knowing the value and relation ofthe customer to his firm on the other, he is in aposition to decide upon the best policy to adoptin the interests of his employers.The investigation of complaints has also itsother side, which is often equally important. Re-peated grumbles from customers regarding oneparticular point are generally a fairly good indica-tion that something is wrong in that direction;and a quiet and tactful conversation with theperson responsible will frequently lead to anamendment of practice which may obviate suchcomplaints in future. The gradual weeding out ofweak points in that way is often of great benefitto the company; and the secretary should keepa sharp look-out for recurring complaints, andendeavour to strengthen the general organizationdirectly or indirectly so as to remove the cause.THE ESTIMATING DEPARTMENTThe principal correspondence department inmany ways is that devoted to estimating and

quoting. It is usually the largest, and is foremost


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26 INTRODUCTION TO BUSINESS MANAGEMENThad some drawing-office experience, and be ableto read drawings accurately and rapidly ; he musthave considerable engineering knowledge, both ofa general type and with reference to his firm'sparticular products ; he must be quick and reliableat figures ; and he must be able to dictate fluentlyand clearly, and to draw up his quotations in sucha way as to make them attractive to the eye andcomplete in detail and description.The usual method is to extract the detailed itemsfrom the drawings and schedule them on what isknown as estimating paper feint-ruled singlesheets, slightly larger than foolscap size, ruledvertically in red with columns for weights andcash. Each item is set down and priced, usuallyby weight or measurement. Items regularly pro-duced by the firm will probably be priced fromexisting cards or schedules ; special items will bemade up by combining figures of operations orproducts, or obtaining figures from the cost depart-ment or works where necessary. Items not madeby the firm at all and there are usually many suchin a large tender of any kind will be based onreplies to inquiries sent out to the actual makers.Only the quantities and prices need be inserted

in the department ; the working-out of all figures,including addition, can be done by one of themany calculating machines on the market. Whenthe total has been obtained, the actual figure tobe quoted has to be decided; and while in theordinary course it will be somewhere about thetotal arrived at on the above basis, there are manycases in which special considerations have to betaken into account. The amount or keenness ofcompetition in any particular line; the quantity


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CORRESPONDENCE: SECRETARIAL, ESTIMATING 27of work in the shops at the time, or likely to begoing through when the order is received; thevalue of the class of business to the firm, and themargin of profit obtainable on it; the firm'srelations with the customer, and the possibility ofgetting a chance to revise if necessary all thesemay affect the final figure. And then only toooften, after hours of labour have been spent on acomplicated estimate, a fresh set of drawings willbe received with an intimation that " slight' 1alterations have been made and a revised price isdesired; and the whole sequence of operationsmay have to be gone through again, perhaps tofind that the whole arrangement has been altered,perhaps that it is so nearly the same as not tojustify the time and trouble involved in the secondanalysis. Nothing, however, can be taken forgranted. Pitfalls occur in the most unexpectedplaces, and a small figure unnoticed may mean aheavy loss. In this connexion reference may bemade to a practice some firms adopt of sendingdrawings containing several alterations and callingattention to only one or two of them. The unluckyestimator deals with the alterations mentionedand presumes that the other details remain thesame. When the order is received and the workput into the drawing office the other alterationsare found, perhaps involving a heavy increase incost. Application to the customer invariablyelicits the reply that revised drawings were sentand that the tender should have been based uponthem. Verb, sap.!One point to watch in connexion with pricingestimates is where and how the essential recordsare kept. Definite arrangements should be made


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28 INTRODUCTION TO BUSINESS MANAGEMENTfor all important figures to be scheduled on cardsor sheets and kept up to date, so that in theabsence of any of the staff through illness or onholidays the work can be carried on withoutundue difficulty or loss of time. Estimatingclerks frequently carry a great deal of inform-ation in their heads, and this practice is renderedmore common by the fact that this class ofwork automatically trains the memory, and agood man will often price a complete estimatewithout referring to any figures at all. Thereis consequently a tendency to rely on memoryunduly, and not to "waste time" in makingrecords a practice which may work quite wellwhen the regular estimator is there, but isliable to cause catastrophic results in his ab-sence. The writer has known of cases whereit has been impossible to send in quotationsfor certain goods during the absence throughserious illness of a senior estimator ; and holidaysin this department are often a bugbear simplybecause essential facts and figures are not syste-matically recorded.The necessary figure work having been com-pleted, the next step is the compilation of thetender. Many points require consideration in thistask. The quotation should be well set out andparagraphed, so as to be attractive in appearanceand easy to read. Nothing is more formidableand unprepossessing than pages of closely typedtechnical matter without a break of any kind, thefacts and figures all being confounded in a mentallyindigestible mass. On the other hand, it is wellto avoid the practice of making a different para-graph of every sentence an absurdity sometimes


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CORRESPONDENCE: SECRETARIAL, ESTIMATING 29heightened by a number being placed before eachsuch division.

Clear description should be the aim, giving fulldetail without unnecessary verbiage. Figures, andparticularly prices, should stand out boldly. It isa good plan to show the price in a line by itself, andin red ink if possible. The essential feature of anyquotation is the price ; and if the customer has tohunt for it amongst a conglomeration of words andfigures it does not create a favourable impression.

Exaggerated or inflated claims should be avoided,and reasonable times stated for delivery. Howoften a careless or over-sanguine estimator in-volves the works in serious difficulties throughpromising deliveries which cannot possibly becarried out ! Minor points such as accuracy innames and addresses, references, dates, etc., shouldreceive careful attention. It should never be over-looked that a new customer will judge the firmlargely by the quotation ; and, other things beingequal, a well-compiled and attractive tender willgo far toward securing the business.The above remarks apply particularly to quota-tions for "specials" ; ordinary standard goods canusually be quoted for on printed forms with aminimum of wording, and quotations for factoredarticles are often merely copies of the tender sentin by the actual makers slightly altered or"touched-up."The organization of the department should besuch as to ensure that all inquiries are answeredwith the minimum of delay. Wherever possible,quotations should be sent by return of post, butthis can be done only in the case of standardarticles or simple special inquiries. It is a good


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30 INTRODUCTION TO BUSINESS MANAGEMENTpractice to keep a quotation register (see specimenruling), in which brief particulars of every inquiryare entered daily under a serial number, a columnbeing provided in which to insert the date andvalue of the actual quotation. A glance throughthis register will reveal at once how many inquiriesare outstanding at any particular time; and acloser examination will show how long is usuallytaken to quote and will afford an opportunity

QUOTATION REGISTER

of strengthening any weak sections. If furthercolumns are provided for the date and value oforders received against quotations, it will makethe register a fairly complete epitome of theamount and value of the work of the department,and afford a basis for the compilation of a sum-mary, say monthly, showing the proportion of thevalue of orders received to quotations sent out forvarious classes of work, thus giving the manage-ment useful information as to the sections inwhich they are doing well or losing business, asthe case may be.Where it is impossible to send a detailed replyto an inquiry for a few days, a card should be sentacknowledging its receipt and promising prompt


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CORRESPONDENCE: SECRETARIAL, ESTIMATING 31attention. Nothing annoys a prospective customermore than to feel that his inquiry has been ignored,unless it is to receive a favourable price the dayafter he has placed his order elsewhere at a higherfigure !

Close co-operation should always be maintainedbetween the estimating department and the works,so as to ensure that deliveries are promised whichcan be reasonably maintained, that special effortsare made to obtain orders for classes of goodswhich may be particularly desirable for reasons ofslackness or otherwise, and that suitable methodsof manufacture are put forward. How often theestimating side go on daily quoting impossibledeliveries when the works are already so con-gested that they do not know which way to turn,while in other departments they may be crying outfor work! Price, too, is an important factor inthis connexion. Every firm has its own basis uponwhich it quotes in the ordinary way; but somemeasure of elasticity is often advisable, and aslight reduction will frequently help to fill a slackdepartment, while, conversely, higher figures maywell be quoted for articles to be made in sectionswhich are already over-full, or which require agreat deal of drawing-office work or special shopsupervision.

Regular conferences on such matters with theworks management are very desirable, or at allevents some form of liaison which will keep bothsides in constant touch. Too often works views areentirely ignored by the estimating side, with theresult that friction arises, and each side endeavoursto throw the responsibility on the other when theinevitable trouble comes. The writer has known


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32 INTRODUCTION TO BUSINESS MANAGEMENTof cases in which the works have absolutely refusedto deal with letters from customers about deliveryon the ground that promises had been given bythe estimating department without consultationwith them, and consequently they would acceptno responsibility in the matter. Such a state ofaffairs can only be harmful to the business as awhole, and can be easily avoided by a littlefriendly collaboration and interchange of views.


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CHAPTER VFOLLOWING UP

To send the quotation is one thing; to get theorder is quite another. Some method of followingup is essential ; the particular course adopted willdepend largely on the class of customer and thegeneral organization of the business. Some firmsdepend chiefly on correspondence methods, someon travellers or agents, some on branch offices,some on a combination of all these means. Thelast is perhaps the most usual, and will be takenas the basis of the following remarks.To begin with, it is essential that copies of all

quotations should be promptly sent to any outsideparties concerned. In most cases the country isdivided into areas, each worked by a traveller oragent ; and it is a fairly simple matter for thetypist to insert the representative's name on hiscopy, so that it may be included in his daily mailand received by him at the same time as it reachesthe prospective buyer. To ensure this, definitearrangements should be made for every travellerto inform his firm in advance of his probable move-ments for the ensuing week, so that an envelopemay be addressed each day to reach him thefollowing morning. Frequently some kind of colourscheme is adopted for such copies, particularly inthe case of branch offices or district agencies ; andthis method is very useful so long as it is confinedto a few primary colours. If unduly extended itbecomes so complicated as to be unwieldy anddifficult to work.

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34 INTRODUCTION TO BUSINESS MANAGEMENTOnly too often the dispatch of the copy to the

representative is the beginning and end of thefollow-up arrangements ; but this is simply leavingthings to chance. However capable and energeticthe outside men may be, it is essential to keep acheck on quotations and see that every possibleeffort is made to turn them into orders. This canconveniently be done by opening a card for eachcustomer, on which is entered daily brief detailsof the quotations sent out merely the date, shortdescription of goods, and value. The cards can bekept in alphabetical order, divided up as desiredinto areas, towns, countries, etc. each sectionbeing marked off by a guide card. Spaces can beprovided in which to enter whether the order isreceived or lost, and also a space for remarks inwhich can be noted the dates of the representa-tive's calls and their results, or the reason for theloss of order price too high, delivery too long, orwhatever it may be.The top of the card may be divided into thirty-one small divisions representing the days of themonth, and small clip-on metallic tabs affixed atany date desired. These can be made in assortedcolours to denote quotations from different sectionsor for different types of goods. Such a tab can beaffixed at a point, say seven days, ahead of thedate of quotation, and will provide an automaticreminder to follow the matter up if nothing hasbeen heard of it in the interim. If the order isreceived or lost, the requisite entry can be madeon the card and the tab removed ; if an indefinitereport is received, it can be put forward for afurther period. Looking along the tops of thecards, the tabs signifying any particular date will


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FOLLOWING UP 35be seen all in a row, and it is a simple matter fora girl to take out all the cards so tabbed and passthem to the person in charge for attention. Therepresentative can then be written to or the cus-tomer communicated with direct as desired ; or ifit is thought advisable the tab can be put forwardfor another week or so.Such a system, if regularly and efficiently

worked, should ensure that every quotation isfollowed up in one way or another. The cards willalso show what quotations have been sent and theproportion of orders received or lost, with thereasons for the latter, and will thus furnish avaluable guide to the business relations with eachcustomer, and reveal any weaknesses that mayexist. Further use can be made of them by insert-ing particulars of the customer's financial standing,and also a quarterly summary showing the totalbusiness done over a period of years.A periodical review of the cards by the secretaryor a responsible deputy will often result in stepsbeing taken to regain customers who have fallenaway, or investigate cases where business is beinglost regularly; and time so spent will be wellrepaid. The case comes to mind of a large firmwhere such a system of card entries was in force,entailing the use of a special room, many cardsand cabinets, and the services of two or three girls,without the cards ever being used for following-uppurposes or consulted by any one in authoritya waste of time and money which could not pos-sibly be justified. Unfortunately such cases occuronly too often. Systems are started, used regularlyfor a time, and then drop into disuse; but theexpense still goes on, perhaps indefinitely.


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36 INTRODUCTION TO BUSINESS MANAGEMENTIf, as is usually the case, the representatives are

paid partly by commission on orders secured, itmay be thought that it should not be necessaryto work a system of this kind ; but this is by nomeans the case. Frequently they are unmethodicalpeople who will overlook or forget quotations un-less reminded from headquarters; and they areoften liable to avoid difficult places and difficultpeople so long as they can secure business in otherand easier directions; while the mere knowledgethat such a system exists is often a spur to action.It must not be forgotten that representatives areoften in a position to obtain valuable informationas to other prices quoted or alternatives offered,which may help a good deal in obtaining orders ;and they should be encouraged to report fully inrespect of unsuccessful quotations, giving thereason for failure and if possible the name of thesuccessful competitor, so that the trend of pricesand trade generally can be carefully watched.Often more is learnt from failures than fromsuccesses; and the representative who merelyreports that an order has "gone by" is not ofmuch assistance to his principals.

It is a useful practice to keep unsettled quota-tions in the department for a limited period, saythree months, so that they may be readily avail-able if a report comes to hand or a telegram ortelephone message is received. A cabinet can bereserved for this temporary purpose, and thequotations transferred at the end of every monthto their permanent quarters in the central filingroom.

Other departments have their own correspond-ence and following-up problems, but none of them


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FILING 39it is of course necessary to provide some kind ofindex to the numbers, as correspondents arealways identified by their names in the first in-stance. Here lies the chief drawback to the numeri-cal system. While the basis may be numerical,an alphabetical index is absolutely essential ; andthis means double work, firstly in numbering thefolders and compiling an index as well, andsecondly in numbering the letters from the indexbefore they can be passed away. The index is usuallycompiled on loose cards kept in trays or boxes, ormade up on one of the many visible or semi-visiblesystems now on the market ; and it must be kept upto date and in legible condition, or delays and errorsin numbering letters will inevitably occur.With the alphabetical system, on the otherhand, no index is necessary, and the labour ofcompiling it and of numbering the letters is saved.Against this, the name must be written in full onevery folder, and in addition it is usual to enterit again on the guide cards which are inserted atfrequent intervals in the cabinets to separate thesections of the alphabet. Names are not so easyto follow as numbers, and errors in passing theletters away are more likely to occur. Again, thenumerous guide cards required in a large installa-tion tend to fill up the cabinets and make thesystem very unwieldy in practice.Combinations of the two systems are also invogue, i.e. alphabetical systems with numberedindividual folders, the index to the latter beinginserted on the guide card for the section. Thisobviates the necessity of reference to a separateindex, but is just as bulky and unwieldy as thepurely alphabetical arrangement.


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FILING 41could be fully opened only when the typists sittingopposite were away at dictation ; and every timea typist came by, the cabinet had to be closedwhile she passed. Such an arrangement or lackof arrangement renders good work impossible.The cabinets should be raised a few inches fromthe floor, so that the lower drawers are easilyaccessible. This may seem a small point, but any-one who has tried to handle heavy drawers full ofletters at the floor level will appreciate itsimportance.The indexes, if any, should be clearly typed.Too often they are made out in ink or pencil, andrendered indistinct by careless writing or longusage. It is well worth while to have any cardre-typed as soon as it becomes finger-marked orworn, as correct numbering of letters is all-important. A letter filed under a wrong number islost for all practical purposes; and if importantits loss may mean going through every drawer andfolder a proceeding entailing many hours, per-haps days, of work and delay. Strong guide cards,well subdivided, save a great deal of time, especiallywhen a new filer is handling the work, and they arequite inexpensive.Every folder should be clearly named or num-bered ; and it should be the invariable rule for the

filer to see that the letters already in the folderare from the same correspondent, or on the samesubject, as those to be inserted. This is a valuablecheck on the filing; and while it may entail alittle more time at the moment, it ensuresaccuracy, which is the great essential in filing.A rather vexed question is whether the lettersshould be fastened or left loose in the folders.


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42 INTRODUCTION TO BUSINESS MANAGEMENTTheoretically there is no doubt that they shouldbe fastened in ; practically this has its difficulties.Letters take much more time to pass away ifevery one has to be fastened in ; they frequentlydo not come to the filing room in date order, andto unfasten several letters and insert one somedistance back is a troublesome process. If anyform of fastening is to be used, it should be easyto undo and take up little space. A bulldog clippassed through a hole in the back of the folderpossesses the first requirement, but is rather bulky.Many firms take the line of least resistance, andsimply place the letters loose in the folders thequickest and cheapest way, but very unsatisfactoryin many respects.No letters should ever be placed loose in thecabinets, between the folders. Some filers have ahabit of doing this if a file is out ; but it is a verydangerous practice, as they are liable to be over-looked when the file is returned, and crushed atthe bottom of the drawer. In all cases of absentfiles the letters should be put in a special basketfor the time being, and put away later in the usualway.A note of files given out should always be kept.In many offices files are issued only against signeddockets; and these dockets are either placed inthe drawers under the file numbers, inserted inthe index cabinet, or kept in a clip. Sometimes thefiles are signed for in a book. The method adoptedis immaterial so long as it is strictly adhered toand the files promptly hunted up ; but some systemof the kind is essential, as it is otherwise frequentlyimpossible to trace missing folders.

It should always be clearly understood that no


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44 INTRODUCTION TO BUSINESS MANAGEMENTyears to learn; and a spirit of restlessness is en-gendered which leads to carelessness and dis-satisfaction. The ideal filer is a woman of fairlymature years who, under the stimulus of a reason-ably good salary, will settle down to a routine joband stick to it, and, moreover, will be able tohold her own with any members of the staff whomay wish to break the regulations. Stinginess inthe filing department invariably means moreexpense elsewhere ; and the truest economy is topay more in this direction and save the troubleand time of the more highly paid members of thestaff.

It is assumed in the above remarks that thefiling is centralized in one room. In some officeseach department retains and files its own letters ;but this entails much duplication and overlapping,and renders it difficult to obtain the completecorrespondence with any client. It is often neces-sary for letters to be kept by departments tem-porarily, until some question at issue has beencleared up ; but it should be understood that thepermanent home of all ordinary correspondence isin the central filing room. The secretary will haveto keep a certain amount of private correspondenceunder his own control, and there will have to bespecial provisions for keeping deeds, agreements,insurance policies, and similar documents ; butthese are only the exceptions which serve to provethe rule.


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CHAPTER VIITHE ORDER DEPARTMENT

THE next department to be dealt with in order ofsequence is the order department, which, as itsname implies, deals with the orders received dayby day.In most offices it is the practice to keep somemore or less formal register of orders in chrono-logical sequence, usually provided with dissectioncolumns for the different sections of the business

ORDER REGISTER

and totalled daily and monthly, so as to providea current record of the amount of work cominginto the various departments. If the orders arevery numerous a card summary may be made upinstead of every individual order being entered.Such a record will be a valuable guide to produc-tion, and if compared with the records of goodsdispatched will show approximately the quantityof work in hand and whether it is increasing orfalling. A specimen ruling of an Order Register isshown.

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46 INTRODUCTION TO BUSINESS MANAGEMENTBefore any order is passed for execution the

financial status of the customer should be verified,so as to ensure that no goods are supplied on creditto buyers of doubtful standing. In the case offirms already on the books this is a fairly simplematter. If a steady business is being conductedwith regular customers probably most of the orderscan be passed at a glance, their names being wellknown to the secretary or clerk in charge. Wherethis is not the case the matter should be referredto the ledger department so that previoustransactions can be looked up. In the case of firmsdoing business with a very large number of smallcustomers it will probably be impossible to relyupon memory at all, and all orders will have tobe passed to the ledger clerks to be approved.If a statistical card containing financial details iskept for each customer, the orders may be passedfrom this. If there have been no previous trans-actions financial books of reference may be con-sulted, or an inquiry put through some agency.For a fixed subscription most inquiry agenciessupply a weekly journal giving details of bank-ruptcies, bills of sale, company liquidations, etc.,and also books of forms on which to make in-dividual inquiries. Many customers object to beingasked directly for trade references, and bankers'references are of very little practical use, so thatthe inquiry agency provides the best means ofobtaining fairly reliable information.The next point is to see that the order containsno conditions which are not acceptable or arecontrary to the terms of the quotation. This is avery important matter, as many firms seek toimpose conditions of their own, frequently printed


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THE ORDER DEPARTMENT 47in very small type on the back of the order, whichmight involve the supplier in risks and obligationswhich were neither expected nor intended. Mosttrades have their own general conditions of salewhich are recognized throughout the industry,and usually no conditions conflicting with thesewill be accepted. Penalty clauses and guaranteeddeliveries in particular should be avoided when-ever possible, and also options to cancel speciallymade goods at the wish of the buyer. No generalrules can be laid down, as conditions differ widelyin different industries; but the principle is asimple one, and should be kept well in mind.In this connexion suppliers should always ensurethat the last word in regard to the acceptance ofan order rests with them and not with the buyer.It must be borne in mind that if a quotation is soworded as to constitute a definite offer of thegoods without any condition as to acceptance, andthe order is sent in proper course by the buyer,the contract is complete even if the order doesnot reach the supplier. It is thus possible for thelatter to be legally bound by an acceptance ofwhich he knows nothing, and which may involvehim in a heavy responsibility. To avoid this, mostfirms word their quotations so as to form a mereintimation of the price of the goods in question,with a definite intimation that no order is bindinguntil accepted by them, thus pushing the wholetransaction one stage further forward and makingthe order the legal offer and their confirmation thelegal acceptance. Such a practice is only a reason-able precaution and should be generally adopted,except in the case of formal tenders to Govern-ments and many municipal departments, which


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5O INTRODUCTION TO BUSINESS MANAGEMENTcopies are perfectly clear, in both contents andtyping. It is fatal to send blurred carbon copiesof figures into the works, as they quickly becomedirty in most cases and are often worked fromunder bad conditions or in a poor light, so that itis essential that everything should be plain andstraightforward to start with.Where orders are very simple and can be dis-patched in one lot from stock or at short notice,arrangements are often made to type the adviceand invoice at the same time as the original, andthus save time and labour at a later stage. This,however, is possible only in comparatively fewcases, as where orders are at all complicated orare sent off in several consignments it is impossibleto use duplicates in this way.


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CHAPTER VIIIDISPATCHING AND INVOICING

THE progressing of the order in the works is amatter which is invariably under the control ofthe works manager, and is not the direct concernof the secretary. There should be such an organiza-tion as will enable the order to be readily identifiedand its position ascertained without delay, so asto ensure delivery to time as far as possible, andto enable prompt and accurate replies to be sentto inquiries as to delivery dates or complaintsregarding delay. Letters of this kind should bemarked by the order department with the worksorder number for easy identification. In somecases they are answered by the works department ;in others the material for the reply is sent to theorder department, which transacts all correspond-ence on the subject. If the works department isproperly equipped to deal with correspondence itis perhaps best for it to handle routine matters ofthis kind, as being best acquainted with the facts ;otherwise it is preferable to relieve it of all respon-sibility for letters, and for the office staff to collatethe necessary information and send the replies.In this connexion it might be well to outline asimple system of keeping a progress record in theoffice as a check on both the works and the buyingorganization. This can be done without muchlabour by making a rough entry of each order asreceived on foolscap sheets ruled as on page 52. Theentries need be made only in the very briefest form,and ruled through as the orders are dispatched;

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54 INTRODUCTION TO BUSINESS MANAGEMENTcarriers have lorries running regularly on certainroutes, and are only too glad to get other loadswhich they can fit in ; and lists of such firms andtheir programmes should be compiled and con-sulted before special lorries are booked. A gooddispatch department will save considerable sumsin this way, besides quickening up delivery inmany cases, road traffic being often much quickerthan rail, and having the additional advantagethat dispatch can be made at practically any hourof the day or night, thus rendering it possible tospread the packing and forwarding over the wholeof the twenty-four hours. On the other hand,there are many destinations to which rail carriageis much cheaper than road transport, and quiteas speedy; so the ideal dispatch clerk will care-fully weigh up the merits of the respective systemsin each individual case no easy task where manyconsignments to all parts of the country, or indeedof the world, are involved.A collateral duty of the dispatch clerk is thatof checking the railway companies' freight ac-counts, which is a task of no little complexity,in view of the many classifications and specialrates in use. Money can easily be saved or lostin this direction ; and a good knowledge of railwaysystems and methods is invaluable.

Arrangements should be made for a daily returnfrom the warehouse of orders dispatched on theprevious day, which should be checked with theduplicate consignment notes or delivery .ticketsprior to the dispatches being marked off in theorder books and the invoices made out. Under nocircumstances should any goods be sent out fromthe works without an order number being first


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DISPATCHING AND INVOICING 55issued from the office. Advice notes should beposted on the day of dispatch of the goodswherever possible, but frequently this is im-practicable, as the necessary details cannot becollated in time, especially where large orders withmany individual items are concerned. In suchcases a general advice should be sent, followednext day by a further advice or invoice giving fulldetails. Some firms do not send advice notes at all,but make a practice of posting the invoice on thedate of dispatch; but this is not a practicalproposition in the case of most engineering sup-plies, and is also subject to objection at thereceiver's end, as many firms do not care for apriced invoice to be treated as an advice note.INVOICING

Invoicing is chiefly a matter of careful organiza-tion to secure the two essentials of promptitudeand accuracy. Usually the prices are entered onthe order copy sent up from the works, and theextension calculations carried out mechanically,forming a rough copy from which the actual in-voice can be typed. If the invoices are largely onthe same forms considerable time can be savedby the adoption of one of the many kinds of con-tinuous stationery on the market; and anotherdevice for speeding up the work is to type theinvoices entirely in capital letters by the use ofa special keyboard, so as to save the continualchanges of key which are unavoidable when thisclass of work is typed in the ordinary way. Thereare also several kinds of special machines fortyping invoices which can be adopted where theoutput is sufficient to justify their purchase, and


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56 INTRODUCTION TO BUSINESS MANAGEMENTmany will furnish a self-checking total which willobviate errors in addition and give a daily totalvalue of all invoices typed. It is now an almostuniversal practice to use the bound copies of in-voices as a sales day book and post direct fromthem, thus doing away with any intermediateentries.Where a foreign trade is done an entirely fresh

set of considerations is involved in the invoicingwork. For one thing, special forms have to beused for many countries, usually with certificatesprinted or typed on the back, and often separatecertificates of origin must be furnished, signed byconsuls or Chambers of Commerce. Again, tariffvariations often necessitate special finishing orpacking in order to comply with the rules in forcein particular countries. The all-important questionof payment, too, must be carefully watched.Where monthly or other periodical terms of pay-ment are given, as is often the case in dealing withregular and well-established foreign customers, theshipping documents can be sent direct ; but wherepayment is to be made against the documentsspecial arrangements are necessary.

Frequently the whole of the papers, i.e. invoices,shipping specifications, insurance policies, and billsof lading, in such numbers as may be specified,are handed to the senders' bankers and forwardedby them to their agents at the port of arrival, tobe handed over to the consignee against paymentfor the goods. Sometimes a bill of exchange issent with the documents for acceptance or pay-ment by the buyer, either at sight or at some pre-arranged term. In cases of shipment to nearEuropean ports, where transit is only a matter of


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62 INTRODUCTION TO BUSINESS MANAGEMENTA useful form of rubber stamp to be impressedon invoices is shown below

INVOICE STAMPGoods received}as invoiced j

Goods os ordered \and prices checked)Calculations checkedCharged toPassed for paymentDirector's Signature .

The above points having been cleared, theinvoice should be certified by a responsible officialand sent forward to the secretary to be finallypassed for payment. This done, opinions differ asto whether the invoices should be posted indi-vidually, or whether they should be retained untilthe statement comes in and then attached thereto,only the total of the statement being posted tothe credit of the supplier's account in the boughtledger. The latter method has the great advantageof reducing the number of postings very consider-ably, and enabling each month's total purchasesfrom any supplier to be shown in a single entry.Some measure of dissection is necessary, of course,and this can be effected by entering the totalmonthly purchases in a bought day book furnishedwith as many analysis columns as are thoughtnecessary, and posting the amount of each state-ment from there to the credit of the supplier, andthe total of each dissection column to its properaccount in the impersonal ledger. If subsequentreference to any particular invoice is required it


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THE ACCOUNTS DEPARTMENT 67balanced before the staff leave at night. It isconsidered by some firms that if the frankingsystem is used there is no necessity to keep apostage record; but the writer does not agreewith this view. With a franking machine thedanger of loss by theft or carelessness is ad-mittedly reduced to the minimum ; but the recordserves other purposes which are not affected bythis fact. It may at any time be necessary toprove in a court of law the posting of a par-ticular document, and without some form of recordthis cannot be done ; and postal staffs, if un-checked, have a habit of stamping every envelopeas it comes along, regardless of the fact that theremay be four or five communications for the samefirm. Waste from this cause can be fairly heavy,and without a record is quite untraceable ; whereasthe writer has found that if the entry of duplicatesin the postage book is marked and the attentionof the staff regularly called to them this troublecan be almost entirely eliminated.

Postal work, to be properly done, should alwaysbe in charge of a senior, who should be heldresponsible for it. To leave the task of stampingand entering a large number of letters in thehands of juniors without supervision and afterordinary staff hours is to court inaccuracy andtrouble. The senior(s) can be recompensed insome way, either by extra pay or by time off atother parts of the day ; and any little expenditurein either direction is well repaid in the long run.PAYMENT OF SALARIES AND WAGESThe payment of salaries and wages is usuallyhandled by the cashier, the principle generally


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THE ACCOUNTS DEPARTMENT 69into this system. If the amount of the employer'scontribution to the National Insurance is addedto the total amount of the salaries it can be used,together with the deduction for the employee'scontribution, to purchase the stamps each week,and will thus obviate the necessity of drawing aseparate cheque or buying them through the pettycash, besides furnishing an automatic check onthe amount so expended. The money can behanded to the staff either by being taken roundto them at their desks or by fixing a definite timefor them to come to the cash office for it. Bothmethods have their advantages, and individualconditions will decide which is the more suitablein any particular case.Wages payments are rather more difficult tohandle. The sheet giving the total figures for theweek is usually certified for payment and passedto the cashier for the cheque to be drawn sometime on the morning of pay-day generally Friday.The cashier should be accompanied on his visitto the bank by one or more of his assistantspreferably young and active; and it is desirableto use either a works car or a hired vehicle of aprivate type in preference to a public conveyance,such as a tram or a bus. While cash is usuallycovered against theft or robbery from the time itis handed over by the bank it is not worth whileto run unnecessary risks, especially where fairlylarge amounts are involved.The money is then counted out, checked, andput into pay-tins or envelopes by the cashier'sstaff. Usually the wages department will havemade out some form of slip or ticket to be placedwith the money, showing how the amount is made


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70 INTRODUCTION TO BUSINESS MANAGEMENTup ; and it is a useful practice to have this donein duplicate, say with a red carbon, and have thecopies in red distributed by the time-keeper sometime before the wages are paid. This enables eachman to see what he is going to pick up; and ifthe money, with the original slip, is handed overonly in return for the one in red there can belittle danger of its getting into the hands of anyunauthorized person. Other methods can of coursebe adopted to attain this end; but there shouldalways be some definite means of identification ofthe recipients, especially where there are largenumbers of men to be paid and personal knowledgeof individuals is difficult.Payment should be made from a pay office with

several windows, the men being paid from par-ticular windows according to their clock numbers ;and if the money has been properly prepared it ispossible to pay a large number of men very rapidlyon these lines.Stamping the insurance cards is a subsidiary

task to that of paying salaries and wages. Asalready suggested in the case of salaries, the valueof the employer's contribution should be added tothe wages cheque, and stamps purchased for theexact amount represented. A small number ofstamps for use in case of emergency can be boughtout of petty cash and replaced when the weeklyquantities are obtained.COMMISSION ACCOUNTS

Lastly, where travellers or agents are paid bycommission, there are the monthly or quarterlycommission accounts to be dealt with. Measuresshould be taken to ensure that every order bears


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THE ACCOUNTS DEPARTMENT 7!the requisite number or other indication of therepresentative to whom it is to be credited; andthe commission terms should also be perfectlyclear. Some firms pay commission on all ordersreceived from a certain area; some pay only onorders sent by the representative personally;some on the value of invoices during a period;some on actual cash received. In many casesvarying rates of commission are paid on differentclasses of goods; and frequently there is a basisamount of turnover which is taken as being coveredby the salary paid, and commission is allowed onlyon business done in excess of this figure. Theaccounts department should be fully and clearlyadvised in regard to such points, which often varynot only between firms but between differentrepresentatives, and are productive of endlessworry and disputes if the paying officer is notcompletely equipped with the essential details.


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CHAPTER XTHE BUYING DEPARTMENT

THIS department is one over which the secretarycan exercise only organizing control, as the workis largely technical and calls for special knowledgeand experience. The buyer himself should be aman with some engineering training, added to awide commercial experience and a general acquaint-ance with markets for all classes of goods, therequirements of most firms ranging, if not from apin to an elephant, at least from a rubber band toa boiler or an engine. The amount of responsibilityentrusted to him varies a good deal ; but in mostcases large contracts or important purchases will bedecided by the directors, while the ordinary day-to-day buying is left largely to his own discretion.The first principle to be observed is that everypurchase, large or small, should be based on arequisition issued by the department requiringthe supplies, signed by some authorized person onbehalf of that department, and giving full detailsof the order or purpose for which it is to be used.The usual practice is to furnish the various depart-ments with pads of requisition forms, seriallynumbered, and to issue orders only against theauthority so expressed. No other departmentshould be allowed to buy any goods whatever, norshould instructions to purchase be carried outexcept when put forward on the proper form. Itis difficult to over-emphasize the importance ofthis point ; any laxity in this direction is likelyto involve the firm in heavy leakages and, in the72


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THE BUYING DEPARTMENT 73most favourable cases, to cause considerabletrouble and confusion owing to the proper informa-tion not having been furnished to those who haveto deal with the matter at a later stage.In many cases, of course, the order can beplaced immediately on receipt of the requisition ;but it is frequently necessary to issue inquiriesfor prices and delivery, particularly in the caseof special goods. If the supplies are required fora customer's order for which an estimate has beensubmitted, prices will probably have been obtainedat that stage; and these should be passed on tothe buyer when the order is received, so as toavoid the delay and trouble involved in sendingout further inquiries unless he considers it neces-sary. Every buyer worth his salt knows the bestsuppliers of all goods in regular demand by hisfirm ; and it is a simple matter to send out dupli-cated inquiries to a number of people, attachingreplies as received to the back of the carbon copyuntil they are all in.The question of which particular offer shouldbe accepted is for the buyer to decide, bearing inmind the all-important factors of quality and

delivery, as well as price. In this as in othermatters an advantage in price may be more thanoffset by poor quality or long delivery. In thefirst case, if the goods are for works manipulationany defect in quality may well cause far moreexpense in wages than the saving in the initialcost ; and in the second, delay in manufacture orannoyance caused to valuable customers havevery much the same effect. The buyer for a verylarge firm once told the writer that his chief objectin purchasing was to ensure that not one of the


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THE BUYING DEPARTMENT 75Just as all orders should be issued on the proper

forms, so all alterations should be made on similarforms headed "Alteration to Order No. " andidentical in size and shape with the original order.Copies of these alteration sheets should be boundup with the order and circulated to all the personsreceiving copies of the order in the first instance,so that everyone handling the matter will havecomplete information regarding it.RECORDSThe question of delivery then demands attention.The progress copies should be sorted and diarized,

BUYING DEPARTMENT CARDJob No :

and efforts made by telephone or post to get thematerials in by the required dates. This work canbe effectively done by a smart junior, the buyerhimself intervening only in urgent cases. Wheregoods are required in connexion with definite worksorders, it is a good plan to have a card headedwith the works order number and containing briefparticulars of the articles ordered for it, giving thename of the supplier and date of order and datesadvised and delivered, so that it is easy to see atany moment what is holding up any particularorder and to concentrate on the various items


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78 INTRODUCTION TO BUSINESS MANAGEMENTCO-ORDINATION WITH OTHERDEPARTMENTS

Close co-ordination with the works and technicaldepartments is essential if the buying departmentis to function efficiently. Every works has its ownpreferences in regard to materials, and it is aswell for the buyer to observe them so far as theydo not tend to restrict competition or increaseexpense. Frequently there is little in them beyondthe conservatism of the user ; and in such casesit is for the buyer to insist as tactfully as possibleon his freedom of action. Again, technical depart-ments are very apt to issue specifications or draw-ings which involve rigidity as to tolerances orspecial dimensions, compliance with which oftenentails considerable extra expense, restriction ofsources of supply, or delay in delivery. Very oftenthe nearest standard article would serve the pur-pose equally well ; and the buyer should bring hiscommercial knowledge to bear and try to get suchspecial requirements waived where it can be donewith no technical disadvantage. In these days ofmass production and large units many works willnot depart from their recognized standards if itcan possibly be avoided; and in the writer'sexperience the great majority of special require-ments in regard to qualities, tests, etc., are of verylittle practical use in comparison with the delayand expense they entail.


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OUTSIDE REPRESENTATION 83definitely stated that the traveller will have noclaim to commission on orders received from theterritory after he has ceased to work it, or quiteunexpected claims for substantial amounts mayarise. It is also advisable to include a clausepreventing him from going to a competitor orstarting a similar business within a certain area or fora certain time after the termination of his agree-ment ; but such clauses are not regarded withmuchfavour by the Courts and are difficult to enforce.

Journey sheets, showing the towns to be visitedduring the next week, should be sent in regularlyin advance, giving a postal address for each night,so that communications may be forwarded regu-larly and reach the representative the followingmorning. Daily reports as to customers visited,quotations followed up, prospects of new business,etc., should be sent into the head office ; and theseshould be made out on forms designed to necessitatethe minimum of writing and be as brief as possible,so long as the essential information is furnished.The traveller will naturally be sent copies of all

quotations and any correspondence relating there-to ; but opinions differ as to the advisability ofsending him copies of other documents, such asadvices, invoices, letters dealing with deliveryquestions, complaints, or payment of accounts.The writer's own opinion is that it is best to sendhim copies of practically everything ; he can alwaysdestroy what he does not want, and it is advisablefor him to be fully informed on all matters whencalling on a customer. Cases have been knownof representatives being very harshly receivedwhen calling on people with whom their principalshave had heated disputes of which theyhave known


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88 INTRODUCTION TO BUSINESS MANAGEMENTeverything he can to make the visit a pleasant one.The personal contacts so formed, with bothagents and buyers, will go far towards establishinglasting and fruitful connexions, and if there issufficient scope permanent and substantial businessmay result.


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90 INTRODUCTION TO BUSINESS MANAGEMENTof getting into touch with likely buyers and ofbringing to their notice outstanding features ornew developments. Such journals are usuallycarefully read by those interested in the particularbranch of industry in question, and consequentlythe advertisements can safely be fairly detailed,and often contain a good deal of highly technicalmatter.The selection of the particular journal is oftena difficult question. It is not easy to get figures of

circulation, while the class of reader is also im-portant. In every trade some journal selects itselfas being the outstanding medium ; but the othersmust usually be chosen chiefly by experiment, whichis both a costly and a lengthy process. To traceactual results it is always advisable to "key" theadvertisement in some way, i.e. to have someparticular feature in address or description whichshould be quoted by the replier and so enable theadvertiser to identify the announcement. Eventhis is not always sufficient, as it is only actualorders which count in the end, and often a journalwhich yields the greatest number of replies doesnot produce the most purchasers. Careful recordsshowing the actual amount of business traceableto each publication are very useful, and maysave a good deal of money from being wasted onunsuitable journals.The amount of money to be spent on advertisingis often a vexed question. Some firms allot aspecified lump sum per annum ; some fix a certainpercentage of their turnover, or of the price perunit; some leave it to be decided by circum-stances, increasing it when they are slack anddecreasing it when they are busy. Most engineering


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ADVERTISING 91firms, however, advertise on fairly conservativelines, keeping generally to a regular space in thesame publications, and varying it only when theyhave some new feature or development to an-nounce. Productive advertising costs nothing, asit should increase the turnover sufficiently toreduce overheads per unit by at least the amountspent; if it does not, there is something wrongwith the advertising, the product, or the works.The size and position of advertisements arefactors which greatly affect their "pull." Smalladvertisements are practically useless ; it is usuallyfound far better to have a full or half-page at fairintervals than a number of (say) one-sixteenthpages every week. Again, a position facing readingmatter, or a front or back cover, is far more effec-tive than one hidden away in a crowd of similaradvertisements at the beginning or end of thepublication. This may not apply entirely toadvertisements in technical journals, as the readersof these publications are usually keenly interestedin technical details, at all events so far as their owntype of product is concerned, and often readsteadily through the advertisement pages on thechance of finding something new or interesting.The design and form of advertisement will ofcourse vary with the branch of industry and theproduct. Some kind of illustration is usuallydesirable an actual photograph if possible, asthese are usually more impressive than drawings.The wording should be clear and bold, and theidea expressed in simple language. Complicatedtechnical descriptions can follow afterwards ifnecessary ; the purpose of an advertisement is tocatch the attention of the reader and get him


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92 INTRODUCTION TO BUSINESS MANAGEMENTinterested. It is often possible to get an advertise-ment supplemented at intervals by an editorialarticle or comment usually without extra pay-ment, provided that the order for the advertise-ment is considered to justify it and this is veryuseful publicity, apart from its value in reprints,which will usually be supplied very cheaply by thepublishers of the journal in question.DIRECT MAILMany firms spend large sums of money in " direct-mail" advertising, either in place of or in addition

to journal announcements. In fact, it is estimatedthat considerably more money is spent on printedmatter, catalogues, postage, etc., than on Pressadvertising. Most firms keep lists of regular buyersto whom they send periodical circulars; othershave envelopes specially addressed from direc-tories or other sources as time permits; othersget sets of typed or printed gummed labels fromcircularizing firms and put them on their ownenvelopes; others still place the whole of thedistribution in the hands of a direct-mail house,and merely supply them with the necessary printedmatter. This form of advertising has the advan-tage of entailing very little waste ; if the lists ofrecipients are properly made up the circulars goonly to people who are likely to be interested, andthe proportion of replies should be far higher thanin journal advertising.General circularizing of this kind is often supple-mented by personal or semi-personal communica-tions to people who are shown by the technicaljournals to be likely buyers for particular reasons,such as contracts placed, extensions, developments,


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94 INTRODUCTION TO BUSINESS MANAGEMENTconcerned ; and it is advisable to circulate pulls ofthe same sheets among half a dozen people, sothat their corrections may be pooled in the hopeof eliminating errors. However much care is taken,it is seldom that a complete catalogue can beproduced without any mistakes ; but every effortshould be made to reduce them to a minimum.One point which should receive special attention

is that of the storage and record of blocks. Theyshould be kept in drawers or racks where theycan be easily identified and are not likely to bedamaged, and an index should be kept, so thatany one can be readily found ; and every block sentout for printing purposes or on loan to customersshould be recorded, so that it can be traced andmeasures taken to secure its return after use. Con-dition is also an important point, as it is impossibleto get good printing from worn or defaced blocks.

It is also advisable to keep a file containing acopy of every leaflet or circular issued, with thedate, number sent out, and to whom sent. Thetwo former points are often indicated by a codenumber on the literature itself, and this is a veryuseful practice. Such a file serves the purpose ofa compendium of advertising matter over a seriesof years, and is very serviceable in indicating thetype of appeal made to customers from time totime, and also forms a record of illustrations usedand blocks in existence. Such a file will of courseinclude only sheet matter; catalogues must bekept separately.PREPARATION FOR RESULTSOne last point may be worth mentioning, and that

is to be prepared for the results of an advertising


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ADVERTISING 95campaign, or the efforts and expense may beentirely wasted, and the effect detrimental ratherthan advantageous. The necessary prepara-tions should be made to ensure that replies canbe promptly and effici

Documents

Edward Brown--Introduction to Business Management