spirit between these departments can often work wonders in handling a difficult situation. By stretching a point the credit department can sometimes materially assist in helping move a surplus stock at a time when prices, shipping facilities, etc., are favorable. This service can be reciprocated by the other departments sometimes putting the brakes on prices, or orders, or shipments, while the credit department is getting some overdue money, or by the transportation department putting a little exra effort in catching a car enroute to a customer whose promise has not been kept.

Inter-Departmental Communication.-In order to have the best coordination of effort between all departments of a business organization there must be a constant line of communication between departments on transactions where two or more departments are concerned. This may be done in person, by telephone, or by the use of letters and forms. As a matter of record, it is often advisable to have these communications in writing, and therefore, as a matter of simplifying the work and keeping costs down, various printed forms are usually found to be the most efficient and inexpensive means of contacting with other departments on details. Some of these forms are shown in another chapter in connection with actual procedure.

REFERENCES

Beebe, Dwight E. Retail Credits and Collections, Chaps. V, VII-IX. Hallman, J. W. Organizing the Credit Department, Chaps. I-II. Kavanaugh, Thomas J. Bank Credit Methods and Practice, Chap. XI. McAdow, Finley H. Mercantile Credits, Chap. IV.

Walter, Frederick W., Ed., The Retail Charge Account, Chaps.

XI-XII.

L

CHAPTER XVI

CREDIT DEPARTMENT PROCEDURE

Outline of a Typical Case.-Perhaps the best way to describe the procedure of work in a credit department is to take a hypothetical problem and follow it through the department to show the methods employed, the equipment and system used, and the department's contact with other departments. The scope and purpose of this book would not permit going into the many different types of cases that come to a credit department for solution. So we shall try to make this imaginary case cover as many points to be encountered in an ordinary day's work as possible. The deductions, however, are not intended to be exhaustive, nor are they applicable to every case. Forms and details, differ in various lines of business, according to usage and custom. Equipment and system also vary greatly in different kinds of business, as to size, type, location, business policies, etc. A large house selling quantities of small articles to thousands of jobbers and retailers will employ methods quite different from those of a house selling some large equipment to a select trade. But, whether it be a large business employing a number of employees in the credit department, or whether it be a small business with a one-man department, the same principles and similar routine methods apply.

Routine of an Order. The following chart (Figure 28) will perhaps help us to visualize the routine of an order from the time it is received until the money for it is collected or the account is charged into profit and loss account:

As a departmental background for our illustration we shall take the credit department charted in Chapter XV, Figure 23.

Among other orders sent by salesmen is an order for one carload of material from the Evans Packing Company, Inc.,

manufacturers of metallic and fibrous packing boxes. With the order is a "Salesman's Report on New Customer," similar to the one shown in Figure 29, on which he gives name and

address, kind of business, three trade references, (The Smith Supply Company, St. Louis; Blank Coal Company; and Good Machinery Company) the customer's bank (The Sixth Street National), the approximate amount of the first order ($500.00), and estimated requirements as two cars per month, or $1,000, terms sold 1% cash 10 days, 30 days net.

SALESMAN'S REPORT

ON NEW CUSTOMERS

NAME

STREET ADDRESS.

P. O. ADDRESS.

STATE

If other than an individual, give names of partners, officers or proprietor

From the executive offices, where all mail is opened, come letters, mercantile reports, checks, notes, trade acceptances, salesman's reports, legal documents, copies of orders shipped from warehouses, branch office reports on credit matters, etc.

NAME
ADDRESS

LEDGER FOLIO.

Cash

Total
Deduct

Dict
Total Cr.

REMITTANCE Memo.

REMARKS

Figure 30. Remittance Memorandum

These all go to the desk of the assistant as shown in Chapter XV to be stamped with a receiving stamp, and all mail, except checks, after stamping is placed on the credit manager's desk. The assistant takes the envelope in which the check is received,