That the client may profit;

              66 HASKINS & SELLS September
That the Client May Profit
AS industry becomes more complex and
competition in business grows keener,
it becomes increasingly necessary that
safeguards against embezzlement be
adopted, that all possible economies con­sonant
with efficiency be effected, and that
all business leaks be stopped. Also, those
who are charged with the management
of business enterprises are realizing as
never before the necessity for having their
finger continually on the pulse of the
business so as to detect its trend. Not to
do so is to solicit failure.
The manager who is to succeed must be
supplied promptly with reliable informa­tion
as to the resources, commitments, and
operations of his business—all procured,
moreover, with the minimum of expense.
The competent manager also realizes the
necessity of guarding against the great
danger of cash irregularities.
In order to obtain accurate information
and safeguard properly the cash and other
resources, there must be an adequate sys­tem
of accounting which is suited to the
requirements of the business and is prop­erly
administered.
Little can be said in this article regard­ing
the specific benefits to be derived from
a good accounting system by the great
variety of business concerns and other
organizations. However, they all may be
summed up, for any organization, by say­ing
that a good system, properly adminis­tered,
will furnish promptly information
regarding financial condition and opera­tions,
analyzed and classified in such man­ner
as may be necessary to show strong
and weak points; in addition to showing
past performances and present conditions,
will keep the administration informed as
to future commitments and prospects; will
exercise control over property of various
kinds and guard against loss of revenue;
will facilitate auditing the accounts; and
will do all these things with the least pos­sible
expense.
Many business concerns have outgrown
their accounting system. Few business
executives have the time or inclination to
inquire into this feature of the operations,
with the result, oftentimes, that leaks and
inefficiencies develop which may seriously
affect the business. Every business of any
magnitude, as well as nearly every small
one, needs to have its system surveyed
occasionally in order to test its adequacy
and efficiency. The professional account­ant,
in view of his knowledge and experi­ence
derived from the study of many
businesses, should be best qualified to
make such a survey.
A system must, of course, be based
upon correct accounting principles. Every
step in the accounting procedure must be
directed—in as straight a line as possible—
toward the ultimate preparation of sound
financial statements and statistics. There­fore,
it follows that the devising or re­vising
of a system is essentially an account­ing
problem, to be undertaken by an
accountant. However, a knowledge of the
principles of accounting is not sufficient
equipment for the system specialist. It