Surveys and disorgani GENERAL STOCK-TAKING. 117 subsequent additions and subtractions in respect of materials received or issued during the period of stock-taking. Disorganization generally zation. reigns during this period, and to such an extent is this the case that it is often found necessary and convenient to suspend business while the process is going on. While pointing out the inconveniences attending periodical and simultaneous surveys of all properties, we do not wish to detract from their importance upon occasions of general audit, or change of partnership, or at any other periods when the verification of the balances of the Stores and Stock Ledgers may be required. degrees. The existence of the Stock and Stores Ledgers enables surveys to be taken by degrees, and at times when the Surveys by state of business is such as to minimise the disorganization and attendant loss of profit. There is reason to believe that storekeepers and warehousemen would be more vigilant if they knew that, instead of a periodical survey, an inventory of any of their stores or stock might be called for at any time and without warning, and that they would be required to explain any differences between the Survey and the Ledger accounts. A further advantage of the Stores and Stock Ledgers is, that by their means any excess or deficiency of commodities shown by the surveys can be localised and easily traced. efficiency. It is to be regretted that there does not seem to be Standard of in practice any in practice any absolute standard of efficiency in regard to stock-taking, and that the term is often applied to a superficial review of the articles, and to an estimate of what is, or, worse still, to a guess at what should be, the value. In an efficient survey every record should be based on "handling," and nothing should be estimated or taken for granted, while the pricing of the articles should be based on the principles which will be hereafter referred to. The results of the survey should be epitomised on survey sheets, of which Specimen No. 50 shows a ruling that will be applicable to most trades. These sheets should be so arranged as to admit of comparison with the corresponding accounts in the Ledgers. Agreement results. If the system suggested in these pages be adopted, the result of the surveys would show an agreement between the number and weights or measureof survey ments of the articles according to the inventories and those standing as balances in the Ledger, and also between the aggregate money value of the articles and the balances of the respective accounts in the Commercial Ledger. According to this system the surveys would theoretically be divided between three SURVEY DIVISIONS. 119 Stores. Stock. Plant. main departments. The storekeeper would be responsible for the store of raw and old material and such articles, other than manufactured commodities and plant, as may for the time be in his charge. The next division would be that of the warehouseman, who would have the custody of the stock of manufactured goods; and the third division would only exist where the system of registration of plant described in the chapter on Fixed Capital was adopted, and would comprise all fixed and loose plant and tools. As has already been pointed out, however, there is no objection in principle to the two departments of Stores and Stock being amalgamated, so far as the situation and custody of the same are concerned, provided the important distinction in the book-keeping explained in previous chapters is preserved. When this is done there will be no necessity to draw for the purpose of surveys any fundamental distinction between these two departments beyond such mechanical divisions as may in particular cases suggest themselves with the view of facilitating the preparation of the inventory. If that method is properly carried out, it will be found to be purely a matter of convenience in any business what divisions are made in the arrangement and disposition of the various articles. In the same way as the books, when properly kept, will bring out the correct quantity and value of the plant wherever the machines and tools constituting the plant may be located, so they will also show the value of the stores and stock, no matter where these may be distributed. It is quite evident, however, that the quantity of stores and stocks on hand may be of such a magnitude as to render the division of responsibility a matter of absolute necessity. It will then Mechanical divisions and aids. probably be found advisable, in addition to carrying out the three main divisions before suggested, to give distinctive names, numbers, or letters to the different subdivisions of the stores and warehouses, and to identify those distinguishing signs with the headings of the corresponding accounts in the Ledgers. Each floor, room, or section could be under the charge of one man, who should be responsible for the accuracy of the records of the articles in that place, and who should have a place for everything, and have everything in its place. He would save himself much trouble, and avoid confusion, by placing on all large articles, and on the lockers or partitions containing the smaller ones, labels describing the articles, and giving in the case of raw materials the name of the supplier, and in the case of manufactured articles the number of the stock or manufacturing order, the date of receipt, and, if thought advisable, the price of the article marked either in cyphers or in plain figures. The utility of indicating the price is not confined to surveys, but enables the issuer of material or stock to immediately mark on the Stores Warrant or Stock Requisition the price of the article he has issued without referring to the Ledger. The conditio sine quâ non of the stores and satisfactory working of a stores or stock system stock system. is that articles should not be issued without the issuer receiving a formal requisition for them from some authorised person. The articles he has in charge should be to the storekeeper or warehouseman what cash is to a cashier. No one expects a cashier to part with money save as against a cheque or receipt, and no one, not even excepting the principal, should expect a warehouseman or storekeeper to part with goods save Essential of CUSTODY OF STORES AND STOCK. 121 Should as against a written requisition or receipt. either the storekeeper or warehouseman feel that he has not a sufficient control over articles in his charge, owing to their not being in the magazine or warehouse, or for any other reason, the articles may be chained, padlocked, sealed, or otherwise distinguished in such a manner as to show that they are still either "stores" or "stock." In this connection it may be well to point out that in establishments where large numbers of workpeople and others pass through the gate, the watchman or gatekeeper should have instructions not to allow any raw material or manufactured goods to be taken outside the factory without the necessary permit from the storekeeper or warehouseman. Although the distinction between Stores and Stock is fundamental, and is not likely to be lost sight of by the reader, it is well to point out the desirability of the storekeeper having a general knowledge of what kind and quantity of stock is in the warehouse, and of the warehouseman being equally well informed of what material is in store. When parts of an article are both used in manufacture and sold, there will be a supply both in the warehouse and in the store, and any sudden or abnormal demand on either of the departments can be met by the Excess one department transferring its surplus to the Supply. other, in order to meet the emergency. An idle or excessive supply is not wanted in either branch, and although the articles common to both are not likely to be numerous, the rise or growth of such excess could be easily checked by the warehouseman being supplied at intervals with a schedule of the articles in store, which could, if necessity arose, be transferred to him as stock, and by the storekeeper being provided with |