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The Music Trade Review
JULY 28, 1928
Baldwin Issues Dealers'
Forms for Accounting
New Publications of Well-Known Piano Manufacturer Include
Form for Statement of Liabilities and Assets and
Form for General Statement of Expense
HE music merchant who previously subtracted the cost of the merchandise from the selling
price and regarded the remainder as profit, less, of course, such obvious expenses as rent
and salaries, has disappeared. In the first place, the demand of the Government for accur-
ate accounting in connection with the payment of income and excess profit taxes, together with a
new conception of general accounting, has served to make for more accurate figures, while, on
the other hand, the general situation has been such that the man with any degree of business
sense has realized the necessity tor knowing
hibiting at expositions, fairs, etc. (See Advertis-
just where he stands each business day.
In accounting dealers have adapted or origin- ing).
Insurance—cost of all insurance carried.
ated systems that have appeared to meet their
Taxes—accrued taxes for the period.
particular needs, some being particularly effi-
Freight and Express—transportation cost of
cient, others having loop holes which have
placing merchandise in stock, including drayage
caused, or may be expected to cause, more or
from depot to store, etc.
less troublesome difficulties. The chief problem,
Delivery Expense—cost of delivering mer-
according to an accountant who has had much
experience in the trade, is that the retailer is chandise sold, including expense in connection
likely to be a bit too optimistic in considering with delivery vehicles operated, depreciation on
same, wages of drivers and laborers, garage
profits, and often fails to charge against his
rent and expenses, cost of hiring outside de-
overhead expense items that do not appear in a
livery service, if any. Includes also the cost of
casual survey.
returning
any repossessed instruments to stock.
In this connection considerable interest at-
Office Salaries, Expense and Supplies—com-
taches to several accounting forms prepared by
the Baldwin Piano Co. for the use of music pensation of clerical help, printing, stationery
and supplies, depreciation, repairs and mainte-
dealers, and designed to simplify gathering and
nance of office equipment (Do not include ad-
setting down figures that will tell the retailer
ministrative salaries of owners, managers or ex-
just how his business stands at all times.
One is a statement of assets and liabilities, ecutives).
Store and Building Expense—light, heat and
from which may be learned the condition of the
business as to cash on hand, equity in instal- water bills, etc., cost of maintaining condition
ment accounts, general accounts receivable, in- and appearance of store and building occupied
(cleaning, painting and decorating), wages of
ventory, outstanding interest, prepaid expenses,
etc., in comparison with liabilities such as com- porters employed and cost of supplies for their
missions paid to the salesmen and others, ac- use, cost of maintaining condition and appear-
counts payable to manufacturers, jobbers, etc.. ance of fixtures, elevator expense including
operators' wages and cost of maintaining, de-
general bills payable, accrued taxes, interest,
preciation of building, fixtures and equipment.
other expenses, and such fixed items as mort-
Advertising—cost of newspaper, program,
gages payable, etc. The whole serves to show
magazine, billboard and other public display ad-
the net worth of the dealer and is a particularly
vertising, including trimming of show window.
convenient form to use for credit reports,
Salaries and expenses of any persons or depart-
The expense sheet printed below is one that
should prove valuable to practically every deal- ments engaged in furthering sales of merchan-
er, for it provides for setting down in great de- dise through advertising. Cost of exhibiting
instruments at expositions, fairs, etc., including
tail those expense items, both outstanding and
cost of moving, servicing, rent of space, etc.
obscure, that help to create overhead and cut
Salaries and Expenses of Salespeople—all sal-
down profits. In offering this form the Baldwin
Co. provides with it detailed information rela- aries paid and expenses incurred in selling that
are not chargeable to "Advertising" or "Store
tive to its use, and it might be well for dealers
Expense." (Do not include commissions).
generally to consider these instructions with a
Commissions to Salespeople—all commission
view to applying some of them at least to their
own accounting system. Expenses, according allowed, whether paid or accrued, to persons
directly employed in selling, less amount of un-
to the Baldwin Co.'s code, are made up of the
earned commissions charged back on sales
following items, all duly explained:
cancelled.
Expenses
Commissions to Others—any commissions
Rent of Store and Warehouse—cost of rent- that might be allowed, whether paid or accrued
to persons not directly employed in selling, less
ing any space used for display or storage of
amounts charged back on cancellations.
merchandise, except rent of space used for ex-
T
Free Merchandise Given with Sales—cost of
benches, stool, player rolls, sheet music, etc.
given with instruments sold.
Discount Allowed—discounts allowed custom-
ers for prepayment of accounts or for special
settlement.
Interest and Financing Expense—interest on
loans from banks or others, charges of Finance
Companies or others for discounting instalment
paper, etc., when not operating on Baldwin Co-
operative plan.
Tuning, Repairing and Other Service (Salar-
ies, Expense, Supplies)—cost of service depart-
ments—wages and expenses of tuners, finishers
and repairmen, phonograph and radio service
man, clerks or others whose time is employed
in connection with service.
Profit and Loss Charge-Offs—losses not prop-
erly chargeable to any expense items listed—
such as unpaid balances of worthless accounts
charged off, damaged equipment, etc.
Administrative Salaries—salaries of owners,
partners, managers a,nd executives.
Miscellaneous Other Expense—any expense
not properly chargeable to any of the other
items listed.
It is not in the headings that the average ac-
counting systems are at fault but rather in the
compilation of the figures under those headings,
which may be taken to mean the inclusion under
one head of items that properly belong in an-
other department and overlooking entirely cer-
tain other items which in the aggregate repre-
sent substantial sums.
It is an old slogan of business that successful
merchandising consists of buying properly and
selling properly. Perhaps in the days of one-
man stores this rule worked out fairly well, but
with the large and often complicated organiza-
tions of the present day it is the management of
affairs between the time of buying and the
time of selling that makes for profit or loss. It
is only by keeping a careful record of all ex-
penses, large and small, simple and involved,
that the merchant is able to judge whether his
markup is sufficient to cover his overhead and
leave a profit, or whether the difference between
the buying and the selling prices is being dis-
sipated in ways that can be remedied.
The Baldwin Co., through its wide experience
and contact in the retail music field, is particu-
larly well fitted to develop an accounting system
about as nearly airtight as possible and de-
signed to eliminate that bugbear of business,
waste. In making the forms and accompanying
instructions available to music dealers gener-
ally, the company is offering a bit of service
that is to be appreciated. It should help to
bolster up the profit column.
Sigler Employees' Outing
HARRISBURG, PA., July 20.—The annual outing
and picnic of the C. M. Sigler Inc. store em-
ployes (Steinway dealer) was held at the Red
Quill Cabin along Sherman's Creek in Perry
County. Members of the firm, employes and
their families and friends participated. There
was a program of outdoor sports following an
elaborate luncheon. Edgar Smith won the
target contest for men; and Mrs George P.
Sheaffer and Miss Mary E. Seiders for women.
NEWARK N J.
ESTABLISHED 1862
AMERICA'S FINE PIANOS
UPRIGHTS
GRANDS
THE LAUTER-HUMANA