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THE
OCTOBER 10, 1925
MUSIC TRADE
REVIEW
Music Dealers' Instalment Sales and
Their Collection Problems
Analyses of Collection Turnover, and the Necessity of Its Frequency—The Daily Cash Summary—How
to Figure the Conditional Sale, to Make Monthly Analysis of Collection Turnover and to Com-
pare Monthly Collection Turnovers — Second of Nine Articles by J. K. Novins
T
H E music dealer should know at all
times what percentage of his balances he
collects each month. Many music retail-
ers keep a record of collection percentages day
by day 4 These records often are cumulative,
that is, the music retailer figures the collection
percentage for the year up to the day the record
is consulted. Such records, when properly kept
counts, and not cash payments, or you will
defeat the very purpose for which percentages
are computed and analyzed.
The Knight-Campbell Music Co., of Denver,
Colo., makes monthly analyses of collection
turnover. In addition a daily record is used.
For this purpose T. P. Foote, the credit man-
ager, has devised two forms: "Cash Receipt
The next item covers interest payments on
instalment accounts. "C. A. R. Denver" means
payments on charge accounts at the Denver
store. The item of "Suspense" covers receipts
of sums which have not yet been entered on the
books to the credit of the respective account
classifications.
"Customers' Insurance" indi
cates amounts collected from customers to cover
MOHTHLY REPORT C0LLSCT10U DSPA3T11BKT.
CASH RECEIPT SUMMARY
REPORT COMPUTED 3Y
Month of
THIS ypNTH
Date-
LAST MOCTH
LAST YEAR
B a l a n c e o f L . N . %s o f 1 s t
ITEM
TO DATE
THIS MONTH
TO DATE
LAST MONTH
TO DATE
LAST YEAR
Cash Collections
Per Cent Collections to Balance
L. N. D e a r e r
Average Balance to date
L. N. Colorado Sprint*
Total Collections to date
L. N. F w U a
Per cent average month collections
L. N. Cheyenne
REP05SBS3I0NS
to brl^jice
Ulmit
Total Charge off Month
Per cant charge off to Balance
C. A. R. Denver
Loss on Repossessions
Sv»pen«e
Per cent loss to charge off
Cu.tomer.' Insurance
Per cent loss to Balance
Repossessions to date
C. A. R. Rent.
Average month repossessions to Bal...
C«.b Sales. Player Roll
Ca,h Sal.., S. M. * Victor
C.h
S.I.., Shop
C.V.R. ACCOUNTS
Balance outstanding
Cash Collections
Per cent collections to 3alance
Ca.h S.l.i, Colorado Spring.
Collections to date
C . h Sal... Puoblo
C . h Sal.., Ch.jr.Bne
Per cent average month collections to
charge
Average Balance...
Charge Off
Per cent charge off to C. \.R
Stockholders and Employee.*
VICTOR WHOLESALE
Borrowed Money*
C. D. C.
Balance Outstanding
Cash Collections
Per cent collections to Balance
C . h Over
Per cent average collections to Bal..
Tran.fer. from Wholesale'
Charge Off
Mi.cellaaeou.
,.
Per cant oharge off to Balancs
TOTAL CASH COLLECTED
Total Receipt, by Transfer
GRAND TOTAL
BANK BALANCE
and analyzed, make it possible for the music
man to make collection- forecasts for future
months. It is just as important to forecast
collections as it is to forecast sales possibilities.
The credit manager of one retail store makes
it a practice to analyze the state of his collec-
tions every month to determine which propor-
tion of the accounts are one, two and three
months overdue.
"The fact that we have so much money out-
standing," he said, "does not matter so much
as a knowledge how fast we are realizing on
this outstanding."
There is, therefore, need for definite records
to make these analyses. These should be kept
separate for thirty-day and instalment accounts.
Furthermore, in computing collection percent-
ages you should figure only payments on ac-
Cash Receipt Summary and Monthly Report
Collection Department Forms Used by the
Knight-Campbell Music Co., of Denver, Colo.
Summary" and "Monthly Report Collection De-
partment." These two forms are illustrated with
this article.
Daily Cash Receipt Summary
On the "Cash Receipt Summary" Mr. Foote
enters all cash received on cash, charge account
and instalment sales. These entries are com-
pared on this sheet with similar receipts "To
Date This Month," "To Date Last Month" and
"To Date Last Year." In this way the credit
manager not only has a daily record, but a
record showing comparisons with receipts of.
definite periods of time.
The first four items—"L. N. Denver, L. N.
Colorado Springs, L. N. Pueblo and L. N. Chey-
enne"—indicate the receipts on lien note accounts
in the company's four stores, located in Den-
ver, Colorado Springs, Pueblo and Cheyenne,
insurance on merchandise while they are making
instalment payments. "C. A. R. Rents" is the
record of receipts on rentals of musical instru-
ments. The cash sales receipts are figured sep-
arately for player, roll and Victor talking ma-
chines, as well as for the company's stores.
"Stockholders and Employes" indicates receipts
from shares of stock sold to employes and
others. "C. D. C." means receipts on condi-
tional sales.
This record is totaled and compared with the
bank balance.
The conditional sales item merits further ex-
planation. These sums represent sales on which
one or more payments had been made by the
customer, but which are considered wise to hold
in abeyance until several more payments have
(Continued on page 9)