Emile Garcke
The following year he became managing director of the new company, now renamed British Electric Traction Co, which was involved in the electrification of tramways in Britain and abroad.
It is not necessary to convince men of business of the advantages and importance of correct mercantile bookkeeping; but as regards their factories and warehouses they are for the most part content to accept accounts which are not capable of scientific verification.
"[14] It involved the cooperation of work people, the foreman, the time clerk and a timekeeper, and should exclude collusion and fraud.
Late 19th and early 20th century these methods for timekeeping, payroll accounting, and piece-rate analysis would significantly improve in theory practice.
He noted, that it shows "in complete detail a system of requisitions, purchase orders, and stores-accounting records, by means of which double-entry balances may be kept on stores.
A competent storekeeper or purchasing agent should find no difficulty in adapting the ideas of the authors to the requirements of the particular business with which he is connected.
"[17] As they (1887) explained: In some establishments the direct expenditures in wages and materials only is considered to constitute the cost; and no attempt is made to allocate to the various working or stock orders any portion of the indirect expenses.
Under this system the difference between the sum of the wages and materials expended on the articles and their selling price constitutes the gross profit, which is carried in the aggregate to the credit of profit and loss, the indirect factory expenses already referred to, together with the establishment expenses and depreciation, being particularised on the debit side of that account.
[18]According to Diewert (2001), the method proposed here was "rather crude" in compare to the "masterful analysis," that Alexander Hamilton Church would give in his 1908 "The Proper Distribution of Expense Burden.
To distribute the charges over the articles manufactured would, therefore, have the effect of disproportionately reducing the cost of production with every increase, and the reverse with every diminution, of business.
The principles of a business can always judge what percentage of gross profit upon cost is necessary to cover fixed establishment charges and interest on capital.
Fells himself in The Accountancy, looked back and made the following remarks: It is now some 23 years or so ago that my friend Mr. Emile Garcke and I, in the flush of our youth, wrote the first pioneering book on this subject.
Now in 1910 Fells continued: In reviews of succeeding editions of this book, as also in the reviews of the numerous other books, many of them most excellent in character, which have since been published dealing with the same subject, has been seen the growth of perception in the average professional mind that in the direction of cost accounting accountancy could do useful and remunerative work of the greatest service to the industrial and trading community.
The need for scientific cost systems is being felt not only amongst industrial nations in the western, but also among those in the eastern hemisphere, and not the least pleasant incidents to me, in connection with the time and attention I have given to the subject, has been to advice with accountants in India thereon and to find Japanese accountants placing themselves in correspondence with me as to the best means of calling in Japan the importance of this subject.
Diemer summarized, that "In a preface the authors state that their aim has been to show that as great a degree of accuracy can be attained in factory bookkeeping as in commercial accounts."
The accounts in the "Prime Cost Ledger" are debited with wages and materials spent in manufacture and are credited with the stock produced.
Charts built up of circles and arrows, and tracing the relationships of forms and accounts, serve to simplify the schemes proposed, and to make clear the underlying principles.
