1st Year Principles of Commerce Notes Ch# 08

Inflow and Outflow of Paper

Introduction

Correspondence is of great importance in modern times. Almost each business transaction involves exchange of papers of different kinds and other material, letters orders samples, cheques drafts, bills , government instruction through circulars and official letters invoices and so on. It is therefore imperative that the correspondence department must be vigilant and efficient in disposal off the letters and maintaining the accurate and complete records of all the papers concerning the commercial transactions.

The correspondence in commercials office had been divided into two categories.

1. Inflow or inward correspondence.

2. Outflow or outward correspondence. Inflow and outflow of papers are guided by the individual requirements and environment or business location and the type of business. They are discussed as below.


INFLOW OF PAPER

1. OPENING OF LETTER:

This letters are usually opened in the presence of the general manger of some responsible officer who by quick glance over each letter assertions whether it deals with matters of routine or required any special notice to be taken. He is particularly watchful of letters which contain a discordant note or complain. Care has to be taken to see that the contents of the letters are properly emptied before the outside covers are thrown away. If the letters is addressed by human name or is marked privateer it is not opened but is handed over to the person concerned. Remittances received are sent to the cashier for entry in cash book. All the cheques received are crossed and endorsed before being sent to the bank for collection and credit to account.


2. STAMPING AND SORTING THE LETTER:

The letters are then sorted out and marked with the date and time of their receipt noted on each of them; this is done with a view to prevent laziness and irresponsibility on the part of the staff in dealing with the letters. They are then sorted out bin batched according to their nature and each is handed over the person entrusted with the dealing letters of that type. Sometimes each letters is impressed with an identification mark indicating the department which it belongs to. The officers are thus enabled to ensue that prompt action is taken on all the letters by each department and filing is up to date and correct. The letters may also then be numbered for quick reference in the office n, if a numerical system of reference is maintained.


3. ENTRY IN LETTER RECEIVED BOOKS:

The letters received are briefly recorded in a let ter received book. It records a date of receipt the name of the sender, and the subject of the letter , the departments to which they have been handed over , the manner of their disposal and the reference through which they have been disposed off.

4. PREPARATION OF REPLIES:

The concern department then deals with the letters take any action necessary upon them and draft replies which are forward to officers, for correction and approval, along with the letter to which they are replies. When the draft is approved the officer sends it to the typist and also initials in the last column of the letters received book to indicate that the letter has been dealt with. Officers my also dictate letter to the typist who may take them down in shorthand and then final letter to be dispatched.
OUTFLOW OF PAPER

It means all those letters invoices, documents etc which are being sent from the office. The outflow paper includes the replies of the letters received by the office as well as the original correspondence done by the office. The outflow correspondence passes through the following stages.


1. REPLY OF LETTER RECEIVED:

The outgoing letters must be prepared with promptness and accuracy and they must be politely worded. They have been described as the silent ambassadors of the business concerns and as such they must have an up to date finish to capture the imagination of the reader. A typewritten letter makes a better impression on the addresses than a hand written letter, since the former is better to look and can be read more easily.


2. THE COPYING OF LETTERS:

It is very essential to have a copy of the letter sent on record for future reference. In case of any dispute this copy would be quite helpful in settling the same. The copy can be obtained by a carbon, press copying machine and in many other ways.


3. THE DUPLICATING OF LETTERS:

The circular letters are to be sent to a large number of firms. In such cases hundreds of copies of the same letter are needed. When these copies are prepared by the help of a machine the same is known as duplicating machines in use which help in the preparation of these copies.


4. FILING OF LETTERS:

The letters received and the replies of the letters sent or a copy of the original letter is to be then filed properly. The files are to be arranged in a systematic manner so that the previous correspondence when required may be found out quickly and easily.

5. DISPATCH OF LETTERS:

The work of sending the letters away from the office is given over to a dispatch clerk. In sending away the letters, he must be very prompt and must also look to the postal requirements in connection with letters which are to be sent through the post office. Neat folding of letters, seeing that the letters are properly addressed and accompanied by the relative enclosures, and making sure that all letters are properly signed by the officers concerned, are matters which the dispatch clerk must look to. He is also required to send away all the telegrams from the office.


6. ENTRY IN A POSTAGE BOOK:

A brief record of all the outflow of papers is kept in a postage book which also serves the purpose of a letter outward book. The dispatch clerk is usually given an advance which he uses to buy postage stamps of various denominations. He uses the postage book to maintain an account of the money advanced to him the postage stamps used by him in dispatching letters.


7. USE OF PEON BOOK:

Some letters are to be sent to the local businessman. These letters are not sent through post but through a peon duty entered in a peon book. The dispatch clerk before sending letters will sort out all those letters separately which are to be send to the local businessman. He will then make entries of all such letters in the peon book and hand over the same to the peon who will personally deliver these letters to the addresses concerned and obtain their signatures to the peon book maintains a complete record of all the letters sent locally.

1st Year Principles of Commerce Notes Ch# 07

Labour Saving Devices

INTRODUCTION

There was a time when business used to be small and the total number of employees used to be quite a few. The office appliances were regarded merely as luxury. With the expansion of business, there has been a great development in the use of office appliances and labor saving devices, which have been introduced to save time and manpower. These machines can do the job more speedily, accurately and at lower cost. In fact, they have become a necessity for smooth and efficient working of the office. Labor saving devices can be classified into the following three groups:

A. General Machines

B. Communication Machines

C. Accounting Machines


A. GENERAL MACHINES

1. TYPEWRITER

It is a common machine and is used in each and every office, as time and labor saving devices. Through this machine, many letters and documents can be typed with speed and neatness. It can prepare more copies in no time. As the industry advanced and requirements increased the improvement in typewriting machines have also been made. Noiseless typewriters are used where typists work near executives and other clerks as noise is likely to cause disturbance. Electric power is also used for operating typewriters. Electric machines require less human exercise and can type more copies than the ordinary machines of typewriter. This is more liked by a typist as he gets less tired and maintains his output better than he does by an ordinary machine. Electric typewriters are more expensive and cannot be used in small offices.


2. DICTATING MACHINES

There are a number of dictating machines but they are all based on same principles on which the gramophone works. These machines record the dictation given by the office executive who can be transcribed by the audio typists and thus, the presence of stenographer is not necessary. These machines however, usually consist of three machines the actual dictating machine, the transcriber and the shaver. The first is used by the person for dictating. The second on e is used by the typist an the third machine is used fo9r shaving of the dictated matter. This machine is most useful for secretaries, partners, managers and others who rare subject to frequent interruption. With special attachment, the dictating machine can be connected so as to record telephone, messages and by the use of microphones, it can also be used for recording speeches.


3. DUPLICATORS

When 100 of copies are required the duplicating machines are used. Each class of machine has its advantages and in selecting a machine for use in particular office, these advantages should be be Given consideration. A variety of duplicators are in use nowadays and few of them are given below;


A) SPIRIT DUPLICATOR

These duplicators can reproduce typewriting, hand-writing or drawings in a variety of colors. A master copy is prepared on a sheet or art paper by means of hectograph carbon paper. This is the only type of machine which can reproduce in several colors in one run. According to the quality of paper and carbon paper used, 100 to 250 copies can be made.


B) STENCIL DUPLICATOR

These duplicators can reproduce type writing .the stencil is out either on typewriting or by writing or drawing with a special pen. Up to 4,000 copies can be obtained and stencils can be stored and re –used if carefully handled and protected.


C) OFF SET LITHO DUPLICATOR

These duplicators can re-produce typewriting, hand writing and drawing. As in the case of stencil, different colors can be reproduced on the finished copy. Up to 50,000 copies can be obtained from the machine.


D) TYPESET DUPLICATOR

These machines are in fact, small printing press of letter press type. It is a sloe method and it also requires some skills to do job. Up to 500,000 copies may be printed.


4) ADDRESSING MACHINE

This machine is bit different from the duplicators .these machines are generally used for addressing the envelope to the regular clients or for the preparations of labels. These machines are adaptable enough to take the wide variety of other work in the office .These machine are operated by electric power.

In this machine, addresses are embossed on metal plates or are stenciled on specially prepared fiber material. These plates are placed alphabetically or in any other manner. When the actual addressing work is t be done, these plate are placed and passed through the machine, and the address are printed on the envelopes.

5) CASH HANDLING MACHINE

The work of the cash department can be helped considerably by machines for handling coins. There are machine for sorting out coins of different denominations from a mixed heap of coins and appliances are also available for counting them. There are also machines for giving change quickly. As no mental calculation is necessary, a great saving of time is affected by such a machine where the number of transactions is very large.


6) CASH CHECKING MACHINE

There are number of appliances which may be used to check automatically the receipts of cashiers. They are usually known as cash registers. Some of them also have arrangement for adding up the receipts so that at any time the machine shows the total cash that should be in be the cash drawer attached to the machine. Some are also so constructed as to issue the receipts to customers while keeping the record for the office.


7) FRANKING AND STAMP FIXING MACHINE

Franking machine saves a good deal of time in scaling the letters and in getting ready for the mail. This machine makes an impression on the envelopes showing in red ink the amount of the postage and the place of origin and date of posting. No postal stamps need to be used. The machine have matters attached to them and they are locked and sealed by the postal authorities to frank up the amount after which the machine gets automatically locked. Some of these machines also have an automatic envelope scaling device. Some business houses have the stamps affixing machine which are fed with postage stamps, and there are devices to cut the stamps off, to moisten and affix them and to count them.


8) TIME RECORDING MACHINE

These machine records the time of arrival and departure of the employees of he office. These type of machine is used in the office where payment are made on the basis of time spent on the job. This machine is like a clock and when the employee enters the office he cuts card in the machine which prints the time. Similarly when he goes out, further he cuts the card in the machine and departure time is printed on the card.
B) COMMUNICATION DEVICES

1) TELEPHONE

The use of telephone is so common and all its importance is so well known that it does not need further explanation. It is maintained by high business houses internally and externally. Internal system enables the executives of same organization to talk to each other on telephone whenever they need so. External systems enables them to talk outside parties. Every city is linked by telephone system so that through trunk call any one may have talk anywhere in the country with the required person.


2. RADIO-TELEPHONY

It is a system which link by telephone mobile vehicles in city or may be in an area. This system is in advance countries. Under this system mobile units such as cars, vans, etc can control each other on radio-telephony through the central station located in the city.


3. PUBLIC ADDRESSING SYSTEMS

In big factories, shops and offices this system is a useful means to give instructions to all of the employees or only those particularly concerned with any special instruction. This system has an advantage of quick communication of message to the concerned persons but it has also the disadvantage of distributing all of the employees while instructions are concerned with any particulars employee.


C. ACCOUNTING MACHINES

1. ADDING MACHINES

After typewriter, adding machine in perhaps the most commonly used machine in office routine working. Adding machine is basis for all further calculations. These machines are of two type: listing and non-listing. These machines have following advantages:

1. Cross-casting is much further faster. Most clerks, unless they are very highly skilled, cannot add horizontally with the same speed as they can add vertically.

2. Selected items can be added from different documents or from scattered positions in one document.

3. Less skill and concentration are required by the clerk.

4. With the aid of adding machines, junior clerks can add with speed and accuracy equal to or exceeding that of a skilled clerk.


2. CALCULATING MACHINES

In a large business there is a lot of calculation work, in order to asses the position. In calculation various forms such as addition, subtraction, multiplication and division are involved. There is likelihood of accounting mistakes, and takes more time in corrections. Keeping in view both the important factors time as well as accuracy nowadays the calculation work is carried on through calculation machines. With the help of calculating machines addition, subtraction, multiplication or division can easily be made with accuracy and without loss of time. Apart form this with the help of said machine the problems of exchange, discount etc. can be solved with great accuracy. It does not require any special training to operate the machine, the mistakes can only occur when the machine in question is not properly handled or when out of order.


3. POSTING MACHINES

Posting means the transfer of amounts from original entries to the appropriate ledger accounts. Accuracy of entries and easy to read are the most important requirements of this function. These machines play an important role in maintaining the accuracy.


4. ELECTRONIC COMPUTERS:

The computers operate at the fastest speed which ever is thinkable by human mind, because these machines do not depend on mechanical movements but on electronic pulses with duration of about one millionth of a second. Computers are able to perform the following functions:-

1. Receive a programme of orders representing the routing to be carried out, store this and refer to it as may be required.

2. Take in original information through one or more input channels and store it for reference as required by the programme.

3. Perform any arithmetical calculation as and when required by the programme.

4. Store the result of any calculation for further reference and accumulate totals as required by the programme.

5. Select any information from the store, arrange it in any required sequence and discharge it through one or more output channels to be printed punched into cards or paper tape, or recorded on.

Apart from computer speed, the principal characteristic of electronic computers is their flexibility as would appear from the following:-

1. They can be made to carry out any electrical operation only by feeding in the appropriate orders.

2. They can proceed from one kind of operation to another automatically.

3. They can automatically select alternative courses of action according to the nature of the date received or the results of previous operation.

1st Year Principles of Commerce Notes Ch# 06

Importance of Advertising

DEFINITION

“Advertising is an art of providing market information through the various media of communication such as magazines, newspapers, television, radio etc. at the expense of the company for the purpose of increasing or maintaining effective demand and making easy the sale specific goods and services.”
PURPOSE OF ADVERTISING

The purpose of advertising is:

1) to enable the public to know the features and uses of the products and overcome traditions and prejudice that may reduce competition.

2) to make easy and increase the sale of present products, to maintain consumer’s awareness, to bring it equal with advertisement of competing firms and to reduce the amount of personal sales efforts required to receive an order.

3) to introduce a new product model of service in the market.


MEDIA OF ADVERTISING

Media means the source in which the advertisement appears. It is a singular as well as plural term. Various types of advertising media are explained as under:-


A. RADIO

Today radio has become very important and can be utilized for advertising the goods which are sold either within the country or all. Today’s commercial services of radio Pakistan are becoming very popular day by day .but life of this advertisement is very short .


B. MAGAZINES

Magazines can be used for the products which are sold out all over the country .this type of advertisement is not flexible as changes cannot be made in the advertisement copy easily it is becomes the copy of the advertisement is to be submitted to the advertising company 4 to 5 weeks earlier.


C. NEWSPAPERS

These newspapers which are daily or weekly are used for advertising the goods of local businessman . a newspaper has a very short life as it is destroyed usually after a period of 24 hours .


D. MEAN SIGNS

It means advertisement through bulbs . this type of advertisement media is becoming popular day by day in big cities of Pakistan like Karachi ,Lahore and Rawalpindi.


E. ADVERTISING BY POST

Small firms advertise their products through letters ,postcards ,catalogue etc.


F. ADVERTISING BY TELEVISION This type of advertisement delivered through a television is a combination of spoken words and visual presentation of products and their benefits .


G. DIRECT MAIL

It is widely used and includes postcards ,letters, catalogues, folders, booklets etc. they have variability of coverage .large and small business both can use it. basis of this kind of advertising is mailing list .this list which has the names of the persons to whom the letters are sent is compiled from time to time from many sources . It needs utmost care and up to datedness. This list can be made extremely selective regarding geographical and consumer interest .It is costly because of printing. Postage ,typing and packing.


H. CAR CARDS

They are used in street cars , buses , subways and rail road cars where they may be seen by people on the way to shopping trips etc. They are effective for all i.e national ,regional and local advertising .They are flexible and reached the people to whom the magazines don’t reach.


I. PACKAGES ,LABELS AND INSERTS

Advertising copy on package must be brief and should have pictures and brand name , qualities , companies name etc. Some are bottles and some are board packages.


J. WINDOW DRESSING

Usually big shop decorates there windows of shop so as to attract customers. This is also one of the media of advertising. The window is dressed in such a way that it may attract attention of the buyers.

K. SAMPLING

Some firms distribute there products free of cost so as to advertise its product to secure sales volume in future.

ADVANTAGES OF ADVERTISING

1. It creates demand for a new article by arousing interest of the public.

2. It increase the sales volume of establish articles constantly keeping the selling points afresh in minds of the customer.

3. It educates the general public about new use or uses of a product.

4. It reduces competition.

5. It creates goodwill by continues reminder to the public about the trademarks etc.

6. It increases additional sales by encouraging present customers in using the articles more frequently and in increased quantities.

7. It facilitates the job of the salesman and dealers by introduction the products to the public.

8. It reduces prices as the production volume increases, which in turn reduces the overhead expense.

9. It insures better quality, improving the quality of goods to have better appeals to the customer.

10. It increases the employment because production increases.


DISADVANTAGES OF ADVERTISING

1. It results sometimes in exaggeration ( over-valuation) and misrepresentation. Such advertisement misleads the public and loses the confidence of the public in the enterprises.

2. It expands the market for the articles of luxury and comfort, because the goods which are needed to meet primary needs of life are not usually advertised.

3. It causes economic loss due to rapid changes in style creation of new objects of consumption and changes in style are waste and determinate to human good.

4. Advertising is impersonal and cannot answer the question asked for by the buyers.

5. It results in monopoly through brands.


IS ADVERTISING A WASTE?

It is not a waste at all. It is an aid to business expansion. Advertisement help buyers who usually do not know or are really aware of the existence of the seller. It expands the sellers market by spreading information about the product. Some people say the advertising increase the cost of production which is to be borne by the customer. It is completely wrong. It creates new demands of commodities and the service which lead t a production on large scale and when the production increases the cost of advertising is not waste but brings gain in the business.


DIFFERENCE BETWEEN ADVERTISEMENT AND PUBLICITY

ADVERTISING

1. Some definite message is communicated.

2. It is paid form of publicity.

3. It is non personal.

4. Its sponsor is known.


PUBLICITY

1. It is generally done in form of news, articles, features written in newspaper.

2. No direct payment is involved.

3. It may be personal.

4. Its sponsor is not always known.