page_title: J. Slater Lewis
section_title: Diagram of manufacturing accounts
hierarchical_section_title: J. Slater Lewis / Work / Commercial Organization of Factories, 1896. / Diagram of manufacturing accounts
caption_attribution_description: English: Special order system flow chart, 1913 (fragments)
context_page_description: Joseph Slater Lewis MICE FRSE was a British engineer, inventor, business manager, and early author on management and accounting, known for his pioneering work on cost accounting.
context_section_description: Slater Lewis' paid special attention to the establishment charges, or overhead element, of manufacturing costs, and advocated the integrating of costs into financial accounts. Garcke and Fells (1887/89) had made a first step here proposing a system to incorporate material costs and labour costs into the double-entry bookkeeping system. Slater Lewis focussed on the next step, and developed a method to practically use the ledger accounts to distributing overhead to work in process. In the years to come, this would become standard in engineering factories.
  In chapter XXIII on "Establishment Charges" Slater Lewis explained its principles in the paragraph on "Allocation of Establishment Expenditure." He opens:
  For the mere purposes of commercial book-keeping, it matters, indeed, little in which way the general and shop establishment charges are dealt with, so long as they are eventually paid for out of the profits made on the work, that is to say, it matters little whether they appear in the books as chargeable to general revenue, or are allocated to the several items of work in progress in the shops. But apart from mere book-keeping, and to meet the requirements of the management for estimating, for controlling the efficiency of production and for comparing, period by period, the relative economy and efficiency of shop administration, it is absolutely necessary to keep the accounts of prime cost (meaning thereby the actual expenditure in labour and material directly incurred in the production of manufactured goods) entirely separate from the establishment charges (shop and general), so that the naked truth as to the cost of the operations which have taken place in the shops shall plainly appear on the face of the accounts. The comparison of the costs of machines produced at intervals even of years is thus rendered possible.
  In a diagram of manufacturing accounts, Slater Lewis explained how "scheme of production and cost control is unfolded in its logical flow." This diagram was based on the scheme, that pictured how to incorporate labour costs into the factory accounts, presented by Garcke and Fells in 1887/89 (see above). Urwick & Brech (1946) more specifically explained:
  As the scheme of production and cost control is unfolded in its logical flow, following the sequence that the customer's enquiry will take as it is transformed into an order, a job ticket, a material requisition, and so on, it eventually reaches the general accountancy phase and opens up the processes of book-keeping.
  To deal with these in the simplest manner, Slater Lewis added an illustrative appendix of nearly thirty pages, containing transactions set out in specimen sheet form. And it is perhaps in this connection that the significance of his scheme is most clearly revealed. For the whole system is an interlocking unity. So closely related are the various procedures and documents that he is able to portray them all in a single "flow chart," undoubtedly the first of its kind in British industry. Two remarkable diagrams are presented to show this feature and to make their continuous study easier. They are supplied as folded sheets slipped into the back cover of the book. How precisely and clearly they illustrate his teaching, Lewis indicates himself by a note in heavy type offering on application unfolded copies of the diagrams for framing and display.
  As Diemer (1904) explained in the Diagram of Manufacturing Accounts, Slater Lewis made "use of the chart method of circles and arrows as previously employed by Garcke and Fells, in illustrating the connection between the accounts and forms illustrated."
  A decennium earlier Garcke and Fells had developed a System of factory accounting, and pictured its elements in four complementary flow diagrams (only the first of four diagrams is pictured here). In Slater Lewis' Diagram of Manufacturing Accounts these four diagrams are integrated to picture the system of manufacturing accounts as one whole. A decennium later Alexander Hamilton Church (1908/10) would further develop this system by introducing the concept o
caption: Special order system (fragments). Nicholson. 1913.
exif: {"Image Artist": "Karina", "Image ExifOffset": "2130", "Image XPAuthor": "Karina", "Image Padding": "[]", "EXIF DateTimeOriginal": "2015:02:17 13:42:48", "EXIF DateTimeDigitized": "2015:02:17 13:42:48", "EXIF SubSecTimeOriginal": "63", "EXIF SubSecTimeDigitized": "63", "EXIF Padding": "[]"}