Chapter XIV: Introduction (2)

=Flat Files.= One of the filing systems still found in some offices is the flat, or box file. This file is made in the form of a box, with a hinged cover, as shown in Fig. 9. This box is of the right size to hold letters without folding, and is equipped with an _A_ to _Z_ index. Letters and other papers are filed between the index sheets in the order of their receipt. Sometimes an attempt is made to keep all of the correspondence of one person together but, since the letters are simply laid in the file, with no means of separating those of the several correspondents filed in one subdivision, it is very difficult to maintain this arrangement.

Cabinets are also made with box drawers of wood, the number of drawers in a cabinet ranging from two to sixty. This permits of the use of a more finely subdivided index, and better classification of the contents. Each box in the cabinet is equipped with a spring compressor which holds the contents in place. To file or remove papers it is necessary to release this compressor. The index is removable, and when the drawer is full, the index and contents are placed in one of the box files referred to, which then becomes a transfer case. A new index is placed in the file, which is then ready for current correspondence.

This style of cabinet was for long the best to be had, but when used for filing an extensive correspondence, its defects became apparent. Among the disadvantages of its use, one of the chief is the uneven filling up of the separate divisions. Where the alphabet is divided among several drawers, one may fill up in two months, while another is but half full at the end of a year. This means that the transferring must be done whenever a single drawer is filled, instead of transferring the contents of the entire file at one time, adding to the difficulty of locating correspondence at a given date.

Other disadvantages are that correspondence is mixed together, making it difficult to locate all of the correspondence of one person; to remove a letter, the drawer must be taken from the file, and a search made through all of the letters in a given subdivision of the alphabet. Frequent transfers are necessary, resulting in an accumulation of transfer files which occupy valuable space in the office.

=Vertical Filing.= The vertical system of filing takes its name from the fact that papers are filed vertically, on edge, instead of being laid flat in a drawer. Vertical filing is the result of a gradual evolution of filing methods.

Those who recognized the defects of the old systems, set about to correct them. In the search for a remedy, all systems in use--for whatever purpose--were carefully investigated, among others the so-called _railroad system_. For years, railroads had been keeping all correspondence relating to one subject together, attaching the letters to a strong backing sheet. The sheet, with the letters attached, was folded twice, making a package about 3½"×9" in size, which package was known as a file. These files were numbered, and kept in numerical sequence in pigeon holes, or in boxes similar to the present-day document files. When the document boxes were used, which was the case in the larger offices, the packages or files were placed on end--filed vertically. This undoubtedly was the forerunner of the present-day vertical file.

The plan of keeping together all correspondence about a given subject naturally appealed to the investigator as being practicable for use in a commercial house. Not a few houses adopted the system in its entirety, which included an alphabetically indexed book in which a brief synopsis of the correspondence was written. The book was also used for a cross-index to the names of individual correspondents. It was really a system of recording the principal contents of letters, with references to the files where all of the correspondence could be found.

While the idea of keeping all of the correspondence on one subject, or with one individual, together, was excellent, this system was not well adapted to commercial use. Writing the contents of letters in a book was entirely impractical, and too much time was required to open the files and refer to the contents. But, said someone, why not adopt the numerical idea, and substitute a numerical for the alphabetical index in the box file; instead of index sheets printed with the letters, why not have them numbered from _1_ up? Then a number could be assigned to each correspondent and all of his letters could be filed under the index sheet bearing the corresponding number. An index book could be used for the names and references to the numbers.

Next came the card-index man with a proposition to use his cards for an index to the files. Not long ago the writer inspected a filing system consisting of a number of box files indexed numerically, arranged on a shelf. A card index supplied the cross-references. In this particular case the system was designed by a card-index manufacturer to create a market for card files.

But the use of card indexes furnished the final solution of the filing problem. If small cards could be filed on edge, why not letters? With a larger drawer, with index guides to fit, the card index idea could be adapted to the filing of correspondence. Indeed, a flat file drawer, standing on edge, as shown in Fig. 10, illustrates the principle of vertical filing.

To preserve the idea of keeping all correspondence of one individual or firm together, folders are used. A folder, as shown in Fig. 11, consists of a piece of heavy manila paper folded, with one edge higher than the other, forming a pocket 9¾"×11⅞" in size. The higher or projecting edge of the folder is used for writing the name of the correspondent or other reference; or the folder may be made with a projecting tab for the purpose.

One of these folders is used for each correspondent. Suppose, for example, that correspondence develops with Scott & Blake. The name of the concern is written on the projection of a folder, and all letters from, with copies of all letters written to, Scott & Blake are placed in this folder in the order of their date--the last letter in front. The folder provides a complete history of the correspondence with the concern.

The folders are filed on edge between guides or index cards having projections on which the indexes are written or printed. The indexes are fastened in a vertical file drawer, yet are removable. On the bottom of the guide, Fig. 12, is a square-cut projection, punched with a round hole. This projection drops into an opening in the bottom of the drawer, and engages a countersunk rod which is passed through the hole. The rod holds the guide firmly in place, but since the rod is removable, the guide can be taken out when it is desired to do so. The folders are not fastened in any way, and any folder can be removed without disturbing the others, as shown in Fig. 13.

=Methods of Indexing.= There are four principal methods of indexing the vertical file; namely, the numerical, alphabetical, geographical, and subject. These four methods, with their resulting combinations, provide for the proper indexing of any class of papers.

_Numerical Indexing._ Numerical indexing was the method first used with the vertical file, and still is extensively used. With the numerical system of indexing, the folders are numbered consecutively in the upper right-hand corner. The folders are filed in numerical sequence between guides, numbered usually by 10's, as shown in Fig. 14.

Each correspondent is known by a number, and all of his correspondence--both original letters and copies of replies--is filed in a folder bearing his number. To locate his folder, a cross-index is necessary, as it is not possible to remember the numbers of all correspondents. The index is provided by a card on which is written the name, the folder number or file number, and any other memoranda that may be desired. The card is filed in a card drawer behind the proper alphabetical index guide, where it can be found very quickly.

Suppose, for example, that correspondence develops with B. J. Anderson. We will file his letter or a copy of our reply in the next unused numbered folder--which happens to be _No. 545_--and this will be Mr. Anderson's number as long as we have any dealings with him. Before placing the folder in the proper place in the file--following folder _No. 544_, back of guide _540_--we will write Mr. Anderson's name near the upper edge, and at the same time we will fill out an index card as shown in Fig. 15. This card will be filed in its proper place in the card index drawer, and whenever we wish to refer to this correspondence we will turn to the card, which shows that it will be found in folder _No. 545_.

When a letter refers to more than one person or subject, it is filed under the most important. For example, when correspondence develops with a firm, it should always be filed under the firm name, even though the letters are signed by individuals. We will suppose that one of our correspondents is the Norton Machine Co., and that folder _No. 610_ is assigned. Later, a letter signed by T. J. Watson, Secretary, is received. Since the letter refers to the business of the Norton Machine Co., it will be filed in their folder, and we will fill out a cross-index card for T. J. Watson, Secretary, referring to the company's folder, as shown in Fig. 16. This will be filed with the other cards in the alphabetical card index, and will enable us to locate the correspondence of T. J. Watson, even if we do not remember the name of the company.

_Alphabetical Indexing._ The alphabetical is the simplest method of indexing. The guide or index cards are printed with the letters of the alphabet, providing an alphabetical index between which the folders are filed. Sets of alphabetical guides with any number of subdivisions up to 4000 are to be had.

With the alphabetical system a folder is assigned to each regular correspondent, as with the numerical system, but instead of a number, only the name is written on the folder, or on the tab projection. The folder is filed back of the proper alphabetical guide, as in Fig. 17, and is used exclusively for that one correspondent.

It is the experience of every business house that a small correspondence is received from a large number of persons. Perhaps but one or two letters will be received, the person never developing into a regular correspondent. This correspondence is treated as miscellaneous. For miscellaneous correspondence a separate folder, on which the index letters are written or printed, is used for each alphabetical subdivision. This may be placed either behind or in front of the name folders, as in Fig. 18.

The miscellaneous folder should not be allowed to become too full. When a sufficient number of letters are accumulated with a firm or individual, or whenever the nature of the correspondence indicates that it is likely to become permanent, it should be transferred to a separate folder.

_Geographical Indexing._ When for any reason it is desirable to have correspondence arranged according to territory, the geographical system of indexing is used to excellent advantage. The plan is exactly like alphabetical indexing, with the exception that the files are divided according to territory. First, the files are divided by states by means of state guides--indexes printed with the names of the states. A very large concern may require guides for all states, while a smaller business will use only three or four such divisions. Or a concern doing business in a half-dozen states may find it advisable to arrange the correspondence from but two of them territorially, indexing the balance alphabetically. The correspondence from a single state may require two or more drawers; or one drawer may accommodate that from several states.

To subdivide the states, guide cards printed with the names of the towns are used. These are arranged alphabetically between the state guides. Correspondence folders are filed back of the town guides in alphabetical sequence. If there is a large number of correspondents in one town, the folders are subdivided with a set of alphabetical guides. The geographical method of indexing is shown in Fig. 19.

When the correspondence in a state is scattered, with but few correspondents in each town, a set of alphabetical guides can be substituted for the town guides. In New York state, for instance, the letter _A_ would represent Albion, Attica, and other towns the names of which begin with that letter. If there is a large town--as Albany--in which there are a number of correspondents, a town guide should be inserted in its proper place in the alphabetical index. Then, if the correspondence from Albany is sufficient, it can be subdivided with alphabetical guides, but these should be of a different color than those representing the towns. The geographical index can be expanded to any limit by inserting additional town and alphabetical guides, wherever and whenever needed.

_Subject Index._ The subject index is used whenever the subject of the correspondence is more important than the name of the writer. Subject indexing may be used in connection with the regular correspondence.

When it is desired to file by subjects indexed numerically, a numbered folder is headed with the name of the subject, and all correspondence pertaining to the subject is filed in that folder. An index card is then filled in with the name of the subject and the number of the folder, and filed alphabetically. Additional cross-index cards are headed with the names of correspondents, and refer to the subject and folder number. Several subject index cards are shown in Fig. 20.

Subject filing can be adapted to the alphabetical index by inserting folders or guides headed with the names of subjects, as shown in Fig. 21. These folders are used for correspondence pertaining to a given subject, and cross-index cards are made for the names of individuals.

=Selecting the Index.= The selection of the index for correspondence files is important, and must be governed by the nature of the business, and the correspondence to be filed. Subject indexing is the least used of any of the methods described. Railroads, and a few large corporations determine as far as possible a number of subject headings under which all correspondence shall be filed, individuals being known only in the miscellaneous correspondence; but these are exceptions, and this method of filing is not adapted to the needs of the average business concern.

Geographical indexing is quite largely used by jobbers, and is a very practicable method for a concern whose correspondence is confined within a definite territory. It is also used to advantage in connection with other methods of indexing. For example, a concern in Chicago, with a large number of customers in Illinois, Iowa, and Wisconsin, might use a geographical index for those states, while filing all other correspondence alphabetically.

This leaves alphabetical and numerical indexing from which to make a selection. A thorough investigation, which has included consultations with many leading filing experts, and examinations of the systems used by more than a hundred representative houses, from the small retail store to the largest corporations, leads to the conclusion that, except in special cases, the alphabetical index is best. It is best because simplest; and to do a thing in the most simple way is one of the cardinal principles of business system.

Alphabetical indexing adapts itself to every possible requirement. Suppose, for example, that the correspondence of the Norton Machine Company is filed alphabetically, and that you want to refer to the correspondence of T. J. Watson, who is secretary of the company. A cross-index card is headed with the name of the company. This would be exactly like the cross-index shown in Fig. 16, except that the number would be omitted.

There may be times when you will wish to keep together all correspondence pertaining to a given subject--as a contract in which you are interested. A folder can be made for this contract, headed with the subject name, and filed in its proper place in the alphabetical index. Cross-reference cards can be made, headed with the names of individuals, and referring to the subject. Perhaps, when the contract is completed, there will be no further reason for keeping the correspondence together, and it can then be distributed according to the regular alphabetical arrangement.

Should you wish to adapt the geographical idea to any part of the correspondence, the alphabetical index lends itself to the change without disturbing the general arrangement of the files. It can be expanded to any size; any class of correspondence can be segregated; and with properly subdivided indexes, papers can be quickly located.

Probably the two most important advantages of the alphabetical over the numerical system of indexing are its economy of operation and safety. As to the first named advantage, there is a saving at the start in the outfit required. Only the letter file and alphabetical index are needed--there is no investment in a card-index outfit, unless it be a very small one for cross-references. But the greatest saving is in the time required for its operation.

Without considering the operations involved in filing letters, compare the two methods when a letter is wanted from the files. Suppose that the file clerk has received a requisition for the correspondence of the Norton Machine Company. With the numerical index, the following steps are taken:

(1) Open card index drawer;
(2) Refer to cards filed back of the N guide, and find index
card showing that folder _No. 610_ holds the correspondence;
(3) Close card index drawer;
(4) Open vertical file drawer;
(5) Refer to folders back of the _600_ index, find _No. 610_,
remove folder;
(6) Close vertical file drawer.

When the alphabetical index is used, only the following steps are necessary:

(1) Open vertical file drawer;
(2) Refer direct to folder of Norton Machine Company, back of the _N_
guide, and remove correspondence;
(3) Close file drawer.

This is merely an application of the principle that a straight line is the shortest distance between two points, as illustrated in Fig. 22.

Alphabetical indexing is the safer for the reason that there is less liability of filing a letter in the wrong place. With the numerical system, the filing of letters in the wrong folder is not uncommon, and when this is done the letters are practically lost.

The usual routine in numerical filing is first to place the folder numbers on the letters, and then file according to these numbers without reference to the name. Naturally, the file clerk commits to memory the numbers of a large part of the active correspondents, and places them on the letters without referring to the card index. Memory is ever fickle, and if the wrong number is placed on the letter, it is probable that it will be filed accordingly.

In the use of figures, the most common of all errors is transposition, and this is a constant source of danger in filing. Suppose, for example, that in placing the number on a letter from the Norton Machine Company, a transposition is made and the number reads _160_ instead of _610_. The letter is filed in folder _No. 160_, just four hundred and fifty folders out of the way. The letter is practically lost, for there is no way to locate it except to look through all of the folders until it is found.

With the alphabetical index there is some danger of filing a letter in the wrong place, but it is materially lessened by the fact that the name must be kept in mind. If the letter is incorrectly filed, it probably will be placed in a folder close to the right one. Almost without exception, it will be found within two or three folders of its proper place; there is scarcely a possibility that a letter from Norton will be filed in White's folder.

MISCELLANEOUS FILING

=Salesmen's Correspondence.= The correspondence from salesmen and branch houses is, as a rule, more bulky than that from even the largest customers. A sub-divison should be provided that will make it possible to locate quickly a letter of any date, without looking through a great mass of correspondence. The most simple way to accomplish this is to divide the correspondence of each salesman or branch by months. A folder should be used each month.

Sufficient space should be provided in the general files to hold salesmen's correspondence for an entire year. If subdivided by months, old correspondence can be located much more quickly than if scattered through several transfer files.

One way to reduce the bulk of this correspondence in the salesmen's folders is to require each salesman to use a separate sheet for each subject about which he writes. Nine out of every ten letters from a salesman refer specifically to transactions with certain customers, and are chiefly important in connection with the correspondence of those customers. Such letters should be filed in the customers' folders, where they will be found when it is wished to investigate transactions with a customer.

The correspondence of some very large customers is also quite bulky. This, also, can be subdivided by the use of a new folder each month. A similar plan is used to advantage in connection with subject filing, a separate folder, filed back of the subject guide, being used for each correspondent.

=Correspondence of Temporary Value.= Every large enterprise receives a considerable amount of correspondence which has no permanent value. Inquiries for catalogs in response to advertising are of no value unless further correspondence is developed. It is advisable to set aside sufficient space in the files, and file such correspondence alphabetically, in miscellaneous folders. Later, when further correspondence develops, separate folders can be made and transferred to the regular files. After a reasonable time--when the follow-up is abandoned--the inquiries can be destroyed, saving space in the permanent files.

=Orders.= The manner of filing orders depends on the business and the method of handling. It will depend on whether the greater part of the orders are received direct from customers on their own blanks, on blanks supplied by the house, or from salesmen on the blanks of the house.

When orders are received direct from customers, whether in the form of letters or on the customers' blanks, it is customary to copy them on the house order blanks, from which orders are filled and billed. The most practical disposition of customers' original orders is to file them with their correspondence, instead of providing a special file for them. There are certain exceptions, as subscriptions received by a magazine and which, for certain reasons, should be kept by themselves; but that outlined can be regarded as a general rule. One reason for filing orders with the correspondence is that, in case of dispute, it will very likely be necessary to refer to past correspondence.

The manner of filing the house blanks depends on the number of copies made. Some houses make but two copies of the order--one to be sent to the customer as an acknowledgment, and one from which the order is filled. This leaves but one copy for the office, and this should be filed numerically, which also brings it in the order of the date. If the order copy is also used as a posting medium, it should be filed in a loose-leaf binder; otherwise a vertical file drawer can be used.

Another very satisfactory method is to enter the order in triplicate--one copy as an acknowledgment, an office copy, and a shipping copy--leaving two copies for the files. One copy should be filed numerically, the other alphabetically. This provides a cross-index without the necessity of writing a card index, showing how easy it is to provide valuable records by using ordinary care. A complete order record is provided by making one extra copy, which is done with no additional labor.

Orders received from salesmen on the house blanks are sometimes used as a posting medium, in which case they are filed in a binder, by date. Another method is to make the invoice in duplicate, and use one copy as a posting medium. In such case, the copy of the order can be filed alphabetically, bringing all orders from each customer together.

=Invoices.= The method of filing invoices depends on whether or not a complete voucher system is used. When no voucher system is used, all invoices should be filed alphabetically in a vertical file. A folder should be used for each firm or person from whom goods are purchased, so that all of their invoices can be kept together. Invoices should be filed in the folder in the order of their dates, the last one in front.

With the voucher system, invoices are sometimes attached to the voucher, in which case they are filed according to the voucher number and a separate card index is kept for alphabetical reference. The more modern plan, however, is to file the voucher numerically, retaining the alphabetical index for invoices.

Invoices can be filed in the same file with the correspondence, or in a special file. When the former method is adopted a folder of a special color should be used. There would then be two folders for a firm, one for invoices and one for correspondence. Special folders with double folds are largely used for filing invoices, as shown in Fig. 23.

=Documents and Legal Papers.= For filing documents and legal papers, there are two standard methods. The older of the two is to fold the papers and file them on end in a document drawer, like the one shown in Fig. 24. The drawer is equipped with a compressor or following block for keeping the papers in an upright position, and either alphabetical or numerical indexes. These drawers can be obtained singly or in cabinets containing any number.

The more modern method is to file documents and legal papers in a vertical file, using document envelopes, as shown in Fig. 25. These envelopes are of the right size to hold legal papers flat, insuring convenient reference, which is a decided improvement over the older method of folding the papers. Any of the several methods of indexing can be used, depending on the requirements of the business.

As a filing system for the lawyer's office, this method is unsurpassed. Every record of the office is kept in one complete filing system, yet each case is separate and distinct. Every paper and all correspondence relating to a given case is filed, unfolded, in one of the document envelopes--or a folder can be used--bringing all papers on the same subject together.

If indexed alphabetically, the papers are filed according to the name of the client. When the numerical index is adopted, an alphabetical index card with cross-references, including the docket index, is used. The folders may be numbered by case or office numbers. Copies of opinions can be filed in the same manner, making every opinion available whether given yesterday or ten years ago. The usual confusion in the lawyer's office, incident to the search for papers scattered through several files, is entirely done away with.

=Clippings.= The vertical system is the most practicable for filing clippings, but, since they are liable to be lost through the open ends of the ordinary correspondence folder, it is best to use either the envelope or the invoice folder--preferably the former. Indexing for clippings should be by subject, and if a file is used exclusively for clippings, it may be either numerical or alphabetical. As a rule, the latter is most satisfactory, though the former is used quite extensively.

An envelope should be used for each subject. On the front of the envelope the name of the subject and a list of the contents is written. All clippings relating to that subject are filed in the envelope, which is placed back of the proper alphabetical guide. Cross-references, when needed, are provided by a card index.

=Drawings and Maps.= A large concern, especially a manufacturing enterprise, has a large number of drawings, blue prints, maps, and photographs to file. One method is to file them in large folders, laid flat in a flat drawer, using a card index for cross-reference.

A more convenient method is to file them vertically. The ordinary vertical file drawer is too small for large drawings, but in Fig. 26 is shown a special file which will accommodate drawings measuring 24"×36". The drawings are filed in heavy folders, made to fit the drawer. This drawer is hinged at its lower front edge, permitting it to be opened by simply tilting the drawer forward, an operation which is accomplished with very little exertion. The drawer is held in open position by an automatic catch which is quickly released when it is desired to close the drawer. Each drawer is provided with an adjustable follower which moves back as the space fills up. When open the drawer exposes its entire contents, any of which may be picked out instantly and again filed with the utmost convenience and dispatch. When a large tracing is to be filed, it is desirable to first pull out the folder to which it belongs and, after having placed the tracing therein, to slip the folder back in its place. This prevents any accidental creasing of the drawing.

Either an alphabetical or numerical index can be used, depending on the class of drawings to be filed. In a machine shop, where all machines and parts are known by number, the numerical index is best. In a publishing house, where it is desired to keep all drawings used for each book, they should be filed alphabetically by subject.

=Credit Reports.= Vertical filing is best for credit reports, as it brings together all credit information about a customer. Unlike correspondence, it is customary to fasten credit reports in the folder by using a drop of paste at the top of each report. A folder is used for each customer, and all reports are attached in the order of their date.

The index may be numerical, alphabetical, or geographical. When the numerical system is used, a card index furnishes the cross-reference. The card contains the name and the number of the folder, with a brief history of the customer's dealings with the house.

FILING HELPS

=Guiding.= The importance of guiding should not be overlooked, for guides are the great essential of a successful filing system. They must be simple and correct. They must be inserted at sufficient intervals to guide eye and hand instantly to the desired folder. A vertical file drawer holds about 5000 letters, and, assuming that the average is 10 letters to a folder, this would mean 500 folders. A general rule is to use 50 guides to a drawer, or one guide for every ten folders.

The estimate of the number of guides required should be liberal. If there are 500 regular correspondents, it is better to equip the files with a 60 subdivision alphabetical index than to confine it to a 50 subdivision index.

Guides must stand hard usage and remain legible; therefore the best quality should be used. All manufacturers of filing equipment now supply guides of heavy pressboard with metal tips. The metal tip guide is entirely rigid and supports the papers or folders in the file, keeping them rigid and in alignment. An important feature is that the index heading (name, letter, or number) can be changed at any time by merely inserting a new slip in the metal tip. Metal tip guides cost more than the old-style manila guide stock, but in the end are more economical. The money paid for a filing outfit should be regarded as a permanent investment; if the expense is to be cut down, let it be in the purchase of supplies used for transfer, rather than in the regular files which are used every day.

=Transferring.= Correspondence which is out of date should be removed from the current file and filed in transfer files or boxes, indexed as in the regular files. Transfers should not be made too frequently. It is often advisable to use cabinets large enough to hold the correspondence for two years, one part being used for current correspondence, the other for correspondence one year back. At the end of the year, all of the correspondence is removed from the older file, which becomes the current file during the succeeding year.

=Sorting.= The work of the file clerk is facilitated and greater accuracy insured by the use of a sorting tray, as shown in Fig. 27. This consists of a wooden tray, equipped with alphabetical or numerical guides according to the system used. For the alphabetical system a set of _A_ to _Z_ guides--one for each letter of the alphabet--is used.

Before attempting to file, the clerk sorts the day's correspondence in this tray. All correspondence belonging in one division of the alphabet is thus brought together, and can be quickly filed.

SELECTING FILING EQUIPMENT

The selection of filing equipment has been greatly simplified by the manufacturers, who have studied the filing problem with the view to supplying the demand for equipment to accommodate every business paper. As new problems have presented themselves, new equipment has been designed. The needs of the smallest office, as well as those of the largest corporation, have been studied and met. Heavy cabinets of solid construction have given way to cabinets built in sections, any one of which can be carried by the office boy. The man who has but a half-dozen letters a day to file finds a section exactly suited to his requirements; as his business grows, he adds other sections; the cabinet grows with the business, making one complete system, no matter how small or how large.

The most universally used of all filing devices is the vertical file. As has been explained in the preceding pages, it adapts itself to almost all of the papers found in a business office. Vertical files are made with drawers in three standard sizes: letter size, for ordinary correspondence, or papers up to 9½"×11" in size; legal or cap size, for legal blanks, reports, and other large papers up to 10"×15" in size; invoice size, for invoices, orders, credit reports, and all papers not larger than 5¼"×8". Papers 8"×10" can be filed in the invoice size by folding once.

=Styles of Construction.= Two standard styles of construction are used for vertical files, horizontal sections and upright sections or units. The horizontal section is made one vertical file drawer high and either two or three drawers wide. Upright units are one drawer wide, four drawers high for letter and cap sizes, and five drawers high for the invoice size.

The upright unit is the newer and preferred style of construction; it is more substantial, and for either large or small filing systems occupies less floor space. Upright units are put together as shown in Fig. 28. Each section is built with skeleton ends, and at each end of the cabinet--whether one or a dozen sections--end panels are used, making one complete cabinet. The sections are locked together, and can be separated at will. Fig. 29 shows three upright sections, in the three standard sizes, joined together to make a complete cabinet. This gives some indication of the possibilities offered by this style of construction in building a cabinet to meet every requirement.

Upright units are also made with combinations of drawers for different purposes. For a small business, an assortment of files for different purposes is frequently desirable. An entire section filled with files of one kind may not be needed, but a combination section offers a solution. The combination illustrated in Fig. 30 contains one cupboard, six shallow storage blanks, two double card-index drawers, and three document files. A vertical file drawer can be substituted for the cupboard unit.

If vouchers, or other folded documents are to be filed, the document drawers shown in the combination unit can be used, or provision can be made for filing these papers in the vertical file. The vertical file drawer is divided lengthwise by partitions into compartments of the same width as the document file. Each compartment is equipped with a follower block and countersunk rod for holding guides.

Where a large number of folded documents are to be filed, as in the office of a corporation using a voucher system, this file is much more convenient than the old style. An old-style document file has a limited filing capacity, and must be taken from the cabinet for consultation. A vertical file drawer, legal size, provides three compartments, each 24" in length. This gives an actual filing capacity of six feet in a single drawer. An upright section, equipped for document filing, is shown in Fig. 31. If an entire section is not needed for this purpose, one drawer can be equipped for document filing, and the others used for correspondence.

A style of construction designed to combine the expansion idea with variety is known as the _inter-inter cabinet_. This cabinet consists primarily of an outer cabinet or shell of standard height, depth, and width. This shell is divided into compartments of standard height into which the filing devices are fitted. The various filing devices are arranged in skeleton units of standard dimensions, made interchangeable so that any desired combination can be produced. Fig. 32 shows an outside cabinet, card index, and vertical file units, which fit the openings in the cabinet.

This construction enables the user to make a combination of small units of various kinds to suit present requirements, all housed in a single case in a compact form. Provision for future expansion is unnecessary, since an additional outside cabinet can be added at any time, and the units rearranged at will to conform with changes in the system.

An inter-inter cabinet shown in Fig. 33 suggests the variety of devices that can be accommodated in a single shell. This cabinet contains vertical file, card index, legal blank drawers, and document files.

The need has been felt for a small filing cabinet, or stack of sections, that would be complete and give the proper variety. The professional man, the department manager, and the executive have need for a small cabinet for personal correspondence, reports, statistics, records of matters requiring personal attention, blanks and forms, private papers, and all matters of a confidential nature. This need seems to have been met satisfactorily by the small sections known to the trade as _sectionets_.

These are complete sections, the largest size being that of the vertical file drawer, which can be stacked one on top of the other or side by side. Any of the standard filing devices can be made up into these sections. A small section for 4"×6" cards is shown in Fig. 34. A single section, with top and base, makes a complete cabinet, which can be added to as needed. Fig. 35 shows a small stack of sections consisting of vertical file, 5"×8" card index, and 3"×5" card-index drawers, and one document file, on a leg base.

=Transfer Files.= Files for the storage of transferred correspondence can be of cheaper construction than the regular filing cabinets, as they are less frequently referred to and not subject to the same hard usage. They should, however, be of reasonably substantial construction; it is usual to keep business correspondence at least two years, and it may be necessary to refer to it many times after it is transferred. Then, too, if substantial transfer files are provided, they can be used again and again; sufficient transfer files to hold two years' correspondence will last indefinitely.

At first, manufacturers of vertical filing equipment supplied nothing more substantial than boxes made of binder's board. Boxes the size of a vertical file drawer were used. These were usually stored on shelves, and to refer to the contents it was necessary to take down the box and remove the cover. To keep pace with improvements in filing cabinets, new styles of transfer files have been perfected. One of the most satisfactory of the more modern styles is the drawer transfer file, which is practically a single drawer section. It is made of light wood with a drawer as shown in Fig. 36. These files can be stacked, one on top of another, and locked together, making a solid filing cabinet. The drawers hold the contents of a vertical file drawer, but are not equipped with follower blocks, and are not recommended for current filing. These transfer files cost more than the old style, but when durability and accessibility are considered, they probably are more economical in the long run.

=Metal Files.= Metal furniture is rapidly gaining in popularity for office use. All sorts of office furniture is now made of sheet steel--desks, tables, chairs, counters, and filing devices for all purposes. Metal cabinets are made in upright sections and equipped with the same filing devices found in wooden cabinets. Fig. 37 shows a row of metal sections, combining a variety of filing devices. At either end are roller book shelves and a cupboard, while in the center are six styles of files.

The most apparent advantage of metal files is the safety afforded, as it has been amply demonstrated that they will go through a very severe fire without damage to contents. Few offices have sufficient vault space for the papers that must be kept. Metal files not only take care of the valuable papers, but by keeping all papers away from combustible material, act as a fire preventive.

Another reason for the increasing popularity of metal files is the scarcity of suitable timber and its advancing cost. The supply of oak and mahogany is decreasing so rapidly that the necessity for a substitute seems inevitable in the near future. For office furniture steel seems to offer the most practical substitute.

BUSINESS STATISTICS

STATISTICAL DEPARTMENT

One of the chief functions of the comptroller's office is to gather statistics which tell what is being done in every branch, department, and division of the business. The purpose of these statistics is to show the results of these activities--the gross volume of transactions, the cost, and the result in net profits. When assembled in the form of intelligent reports, these statistics present an understandable history of the business.

The statistical department may be considered as the cost department of the commercial branch. Manufacturers recognize the necessity for comprehensive statistics in the manufacturing branch; they realize that they must know what their goods cost to manufacture; but in comparatively few enterprises is the importance of commercial costs recognized.

In the factory, costs are figured down to the most minute detail; what it costs to perform each operation on every part of the completed whole is known; the efficiency of every man--what he costs in wages, in power, and general expense, and the cost of every bit of material he uses--all of this is told by the cost accounting system. What it costs to sell the goods is usually a matter of guess work.

To know what it costs to run a business--to know _commercial costs_--is just as important as to know manufacturing costs. Both are necessities if the business is to attain its greatest possibilities.

What are the actual profits of this or that department?

How much net profit is there in handling this commodity?

Does it cost more to send a salesman to that little town, ten miles off the main line, to take Jones' order than the profits on his business?

Is there as much profit in working _this_ territory as some other?

Measured by the standard of _net profits_--not volume of sales--is Brown a profitable salesman? Compared with White, what is his efficiency?

These are some of the questions to be answered before it can be claimed that the statistical department has reached its highest state of efficiency. The success of modern merchandising is measured, not by the volume of business transacted, but by profits. In days gone by, the merchant liked to be able to say that he sold more goods last year than any of his competitors; today he is better pleased if he has made the most money. A net profit of 10% on a business of $500,000.00, is more attractive than a million-dollar business without profit.

Commercial costs may be divided into two classes--sales costs and administrative costs. Of the two, sales costs are the more important; if sales costs are not kept down, there will be nothing left from which to pay administrative costs.

=Sales Costs.= In the broadest interpretation, sales costs include every expense properly chargeable to the sale of goods. For statistical purposes it may very properly be divided into direct and indirect, or general selling expense. Direct sales expense is made up of salaries and traveling expenses of salesmen--items which can be definitely determined and charged against definite sales. Indirect sales expense is made up of advertising, salaries of the sales manager and his office assistants, expense of entering orders and billing, packing and shipping expense, and all similar items properly chargeable to the expense of marketing the goods--items which, while chargeable to sales, cannot be applied directly to individual sales, nor to specific territories.

Figuring sales costs is a specific function of the statistical department which is sometimes referred to as _profit figuring_--an appropriate term, since the principal object of gathering sales statistics is to determine profits. As a preliminary to figuring profits, it is necessary to have an accurate record of the _cost_ of the goods sold. In a manufacturing enterprise, it is expected that this information will be supplied by the cost department; in a trading business, the statistical department must make the calculations.

The first step is to obtain a record of all goods received. This can be done most easily by obtaining duplicate invoices, which will be supplied by those from whom goods are purchased, if insisted upon. To the invoice must be added the freight and cartage--items which must be supplied by the accounting department. This gives the total cost, laid down, and should be divided to show costs per unit--as yards, dozen, pounds, barrels, or tons. On a mixed shipment it is not difficult to apportion the freight to the different commodities. Every freight bill shows the rate at which the shipment is billed, and the total can be apportioned by weight on the same basis.

To insure a permanent record of cost prices, it is best to register each shipment received, with its cost. This register should be divided according to commodities, providing a separate record of each one. A loose-leaf book is best for the purpose.

A suitable form is shown in Fig. 1. This sheet is headed with the name of the article or commodity, and each sheet is used for a record of receipts of a single article. The record includes date of invoice, date received, from whom, lot number, quantity, price, amount of invoice, freight and cartage, total cost, and cost per unit. Each lot of goods received is given a lot number, these numbers being consecutive for each commodity.

The sheet serves the double purpose of a record of receipts and a price list. Both the quantity and total columns are footed, the footings being carried forward to the end of the month. All sheets are filed alphabetically by commodities, subdivided by departments, the current sheets always being on top.

=Records of Shipments.= Before sales costs and profits can be figured, the statistical department must be supplied with records of shipments. This may be accomplished by providing an extra copy of the invoice, which is easily done with modern billing systems. To save transcribing, the copy for the statistical department should be wider than the original invoice. The extra width allows for the addition of special columns needed in figuring profits on the shipment, as shown in Fig. 2. This form has added columns for total cost, gross profits, sales expense, net profits, and per cent of net profits.

When these invoice copies are received in the statistical department, the price lists, Fig. 1, are referred to for cost prices. Here the use of the lot number assumes importance, as prices are obtained for the specific lot numbers shown on the invoice, resulting in actual rather than estimated profit figures.

After serving their purposes in the tabulation of other data, explained later, the invoice copies are filed alphabetically, keeping all invoices to the same customer together. Either a vertical file or a post binder may be used for this purpose.

=Returned Goods.= Another very important record in profit figuring is that of returned goods. Profits may be figured on the invoices, but if accurate profits on the business of a customer or a salesman are to be recorded, returned goods must be considered.

When goods are returned, it means a loss of anticipated profits, and should be considered in the same light as an actual loss. In a well-managed business, returned goods are kept down to a minimum; if they increase above normal, an investigation into causes is in order. Repeated returns of the same merchandise indicate a defect in the merchandise itself; if those from the territory of one salesman are frequent, an inquiry into the salesman's methods is necessary--he may have the fault of loading his customers too heavily, or of adding to their orders--all of which are added reasons why a record of returns should be kept.

A blank for a monthly record is shown in Fig. 3. This record shows the name of the department from which the goods were sold, the commodity, name of customer, price at which sold, the cost--including selling cost--the loss, and the name of the salesman. From this sheet, all data necessary for complete records can be tabulated.

=Salesmen's Records.= One of the special benefits--perhaps the chief benefit--of a profit-figuring department is a record of the work of each salesman. Not merely the volume of his sales, but the profits on those sales, measure his worth to the house.

The salesman whose sales are largest in quantity, or even in dollars and cents, is not necessarily the best salesman. One man may sell a thousand dollars' worth of sugar, while another sells two hundred dollars' worth of tea and makes more money for the house; one strives for volume--making price concessions to secure a big order--while the other is content with smaller sales at a good profit.

In the final analysis, profits determine the efficiency of the salesman. His salary may be large or small; his expense high or low; but he is not efficient unless his business shows a net profit.

To tabulate the sales of each salesman, so that a complete record of his work may be seen at a glance, is then, of the utmost importance. The first step should be to make a record of _what_ he sells--how much calico and how much silk. On a loose-leaf sheet, ruled as shown in Fig. 4, a record of a salesman's sales of a single commodity may be kept; from these sheets, a record of his total sales can be tabulated.

The head of this sheet shows the name of the commodity, the name of the salesman, and the month covered by the record. A detailed record is kept of each day's sales, showing quantity, cost, sales, gross profits, and per cent of gross profit. At the end of the month returns are deducted--the information being obtained from the returned goods report, Fig. 3, leaving the net record. This sheet, which is loose-leaf, is filed alphabetically by salesman's name, the sheets for each man being in alphabetical order by commodities.

A record of the salesman's total business is made on the loose-leaf form shown in Fig. 5. This record is made up from the totals of the commodity records, Fig. 4, and the form has the same columns, with an additional column, headed _% of total_. In this column is entered the per cent which the total sales of each commodity bears to the salesman's total sales. The profits on the salesman's business usually increase in direct ratio to the increase in the per cent of sales of the higher-priced specialties.

This total record is, of course, made up at the end of the month, only the monthly totals being shown. A recapitulation is made at the bottom of the sheet. In the right-hand, or credit, column the gross profit is brought down; in the left-hand column, sales expense is entered, the several items being separated. First, the salary of the salesman and the amount of his traveling expenses are entered and footed, the total being the direct sales expense. Following this is entered the general sales expense that should be charged against the business of the salesman, this item being supplied by the accounting department. The total sales expense is then extended in the credit column and deducted from gross profits, leaving net profits--the real measure of the salesman's value.

These sheets should be filed in the same binder with the salesman's commodity sales records. A separate index may be used, or they may be filed on top of the commodity sheets, bringing the entire month's record together. To make identification easy, they should be of a different color from the commodity sheets.