The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1914-03-05
FARMER GRAIN DEALERS

SAAStS Ih6I wall particularly 1lC LNS
needs Of every, elevator. It is not
only necessary to have a good sys-
tenn but it is also necessary that this
| system be properly kept in order that
1t be Of any value in keeping the
records Of account.
Il am familiar with the systems of
accounts advised under the supervi-
sion Of the state railway commission
and 1t is a system that is worthy Of
praise and, no doubt, admirably ans
Werst the purposes Of a complete set
OF records in some of the larger ele-
vators where it Is possible to keep
expert bookkeepers or where the man
aged Is an accountant, but it is not
being universally used because it will
not answer the needs of every farm
ers' elevator in the state, taking the
conditions as they now exist. It
would be impossible for some OF your
managers to- properly keep this set
or records and your business is not
sufficient to employ a bookkeeper who
would spend all his time in keep
ing the records. Others do not keep
it because it entails more work than
the small business requires. If all the
elevators of the state were doing a
sufficiently large business to employ
nookkeepers to keep this set of rec
ords there would probably be- no diff
hculty in securing the adoption Of
this system throughout the state. It
Is impossible to secure good managers
for all the elevators Of this state, who
are also good accountants. The posi-
ton OF manager, in q farmers ele-
vator, is one that must be filled by
a man who has had considerable ex-
perlence In buying and selling grain
and 1t Is better to keep a smaller sys-
tenn, which may be more or less loose
but a be kept by a who
can handle the buying and selling in
a business-like way, than to have an
admirable set of records kept by a
manager who is an accountant but
who knows very little of the grain
business from the standpoint of brv-
ing n selling. Your association has
adopted a system prepared by a Min
neapolis man. How many Of you are
using 1t?" This system Is fairly
simple is a person will spend some
time in studying it out, why Is it not
more generally used Because each
manager, who knows the accounting
BUSINESS has worked out a system
OF his oWn and prefers to keep such
system. Managers who are not good
accountants are using the simplest
methods that they can find to ans
Wer their purposes az best they can
win as few records as possible, but in
most cases keeping those records,
which they do keep, in good shape.
Some OF u elevator companies have
secretaries who are keeping the books
from daily reports made by the man
ayers. This system is to be COM
mended as it generally puts the larg-
er problems Of accounting and the
responsibility Of keeping a complete
set of records upon a person fully
CaD4DIA or knnninCr thASNo l.. kI.- $500
the manager merely keeps a, record in
MS office OF the purchases and stor-
ages n sales, making daily reports
10 the secretary who properly records
them. This method also has. an adj
vantage in that it places a check be-
tween two persons upon all trans
actions. $3.50
You will notice that We have vari-
Gus conditions to deal with. We have
no; as yet found a system that is
potn simple enough and completes
enough for all, in short, one system
mat, Will adequately answer the needs
Oh all the elevators of the state, Now.
as long as this diversity of conditions
exists, lis it not better to have indi-
V1dual and distinctive systems adapted
especially to each type of elevator,
IaIher IMAM to try and adapt the eIe-
Yators to neSstereotSped system of
accounting records 2? My idea would
pe%to give each elevator .systenn, hest
suited to 1t. How this can be done
Will come up.ing the point. II am going
10, make later on about auditing, but
before going further, 1 want to make
lnyseif clear on one point. I do not
Say that n system, for example the
railway system, is not ADAPTABLE tn
a great many elevators, but / do say
ina any n system will not serve,
Ihe pest purposes of all the elevators
~nsiderln conditions as they now ex-
1st- OF course, If we are going to dis
charge all our managers and hire
oookkeepers in their places, it would
opa be a different problem. Your.
managers have earned TO keen the set
they are now using, but a great MANY
could not keep an elaborate new sys-
tenn, so why would it not be best to.
improve the methods. now used bv
them IL the same are not satisfac-
Tory rather than install an entirely
new SYSTEM which they cannot keep.
= = Auditing.
The principal objects of an a,,dit of,
the books of an organization. are for
the detection Of fraud, the detection of
technical errors and the detection of
erTors OF principle. One of the weak
est spots In farmers elevators is the
lack OF proper auditing. Most Of your
or~sanlzations nave provided for q form
ot internal auditing, the plan being to
nave n or two Of the directors go
ofer the rnanagers' accounts from time
70 time, certifying as To their cor
rectness., This plan is good as far as
II goes, but unfortunately it does not
SO far enough. How many of the
average directors Of a farmers eis-
vator are familiar with the principles
OF accounting? Very few. 1t Is i'm
possible for a man unfamiliar with
the principles of accounting to accur-
ately check a set Of accounting rec
ords. It is impossible, or at least i'm
probable, that the ordinary COMMITTEES
can discover error or fraud which have
oeen %cleverly covered up by the man
ager, or other persons keeping the
books. The average board committee
comes into the Office, glances over the
books, spends a few hours a month
looking over the cancelled checks, scale
records, etc. How many Of these
committees follow every entry |
through, know that every entry is cor
rect, check all footings, postings,
r~4