The Gazette 1961 - 64

extracted and passed to the partners so that, for example, immediate action can be taken to check excessive expenditure. The details of past spending can form the basis of future budgeting, and the profitability of the various departments, individuals or types of work can easily be assessed. Full use should always be made of the books of account and the accounting system should be designed so that any statistics can be quickly and easily extracted. Thus, much can be done to improve the methods employed in the cash office. The main advantages of modern manual account ing methods are that more work can be done in the cash office without increasing the staff, errors arising from too many copying operations are reduced to an absolute minimum, if not eliminated completely, and all the information necessary for the efficient running of the practice, at least from a financial point of view, can be extracted from the books with the minimum of effort. . Hand-written carbon-copy ledger-posting must result in a saving of at least 25 per cent, of the time taken in writing up the books of account by con ventional methods. If the whole system is redesigned so as to eliminate unnecessary books, there will be an even greater saving. It is doubtful whether the use of a book-keeping machine will increase the time saved. In fact, if the operator is not a proficient, typist it may take more time to complete the books on the machine, than to do so by hand. Carbon-copy ledger-posting systems use loose-leaf staionery and are very easily adapted to meet any requirements peculiar to a particular firm. The stationery itself must be designed so that the proving and other procedures are as simple as possible. Provision must be made for a running balance to be kept on all ledger accounts. Apart from being essential to the proving process this simplifies the task of extracting balances and provides the profit- earners with invaluable information. The most important advantage of a running balance is that the work of the cash office does not come to a halt while the books are being audited. Designing the stationery so that carbon copy principles can be employed means that some old and universally accepted conventions must be discarded. One is that debits and credits change sides in the books of prime entry and are headed " receipts " and " payments ". However, these minor points do not alter basic principles. To achieve the maximum benefit from the introduction of a new accounting system, the books of account should include full details of every step taken during the course of each transaction so that there is a complete financial history of it always available.

cedures. The records must be as simple as possible and must not entail the writing up of separate books. If bills are drafted so that they comply with the Solicitors' Accounts Rules, the copy of the bill is the only record necessary. If the copy is put on a file of unpaid bills when it is delivered, and trans ferred to a file of paid bills when it is settled, there is no need to make entries in books, or to prepare lists of delivered bills, in order to maintain complete records. A system should be devised for automatically rendering further accounts to clients in respect of outstanding bills after the period, decided by the partners, has elapsed. This will be a simple task if the unpaid bills are filed in date order and periodically checked by the cashier. Simplifying the records of bills saves yet more time in the cash office. iv. Observing the solicitors' accounts Rules The ultimate responsibility for ensuring that accounting procedures do not infringe the Rules rests with the partners, but the cashier must have a detailed knowledge of the Rules since his work is, of necessity, almost entirely unsupervised. The accounting system must, therefore, contain every possible safeguard against infringement. It is this factor which has, in the past, caused many accounting systems in use in solicitors' offices to become exceedingly complicated. If it is properly designed and installed and carried out according to the designer's instructions, it can contain a built-in " insurance policy " which, as far as is humanly possible, eliminates any possibility of infringing the Rules. For this reason, when a system has been designed for a particular firm, it must be installed and operated without any modifica tion whatever, beyond those made necessary by changing circumstances. For, a system should be designed so as to be flexible enough to accommodate any forseeable change in requirements. v. Wages It is the responsibility of the cashier to pay staff wages and to keep the relevant records. All that needs to be said on this subject is that carbon copy principles can be applied which eliminate so many copying operations that the preparation of wages, even in a large firm, becomes a very simple and

quickly completed task. vi. Financial statistics

Apart from being the record of a firm's financial transactions, the books of account provide a wealth of information concerning the day-to-day running of the office. Information should be regularly