Westwood Works 1903-2003
A complete record of the activities of the Accounts Department of Baker Perkins Limited was compiled in 1950 by A.K. (Ken) Jackson. Ken retired in 1983 as Group Chief Accountant.
Ken's record is highly detailed and is, inevitably, too long to reproduce in full here. It refers to an era before the computers came and it is intended to include only sufficient to provide an idea of the breadth and complexity of the activity at that time. More information about the introduction of computerisation into the management of the Financial function at Westwood can be found here and here.[MORE WILL FOLLOW]
In 1950, the Accounts Department encompassed 4 key activities:
Order and Invoice Department
The Order and Invoice Department comprised some 45 clerks, and was responsible for the actual recording of the orders on the books, the maintenance of details of all variations, and all the many necessary, intermediate records right up to the stage where the invoice was prepared and passed on to the Commercial Department for despatch to the client after delivery (and erection as necessary) of the order to the client.
The Time Office consisted of a General Time Office in the main office block and five sectional offices:-
The General Time Office was mainly concerned with the recording of times of arrival and departure of all employees, but it was also responsible for the preparation of Hollerith Cards and recording particulars of time daily on the Clock Cards for the Millwrights, Nickel Platers, Carpenters’ Shop, Markers Out and Gear Cutter and Automatic Machine Operators and the Despatch Department.Clock Card or Pay Roll
Each Pay Roll employee was allocated a check number which was shown on his/her weekly Clock Card (known as Pay Roll).
The Purchasing and Stores department was divided into three main sections:-
The functions and modus operandi of the second section, Material Control, are outlined below:
Control could be summarised as:-
Records of Stocks
The Stock Record Cards were subdivided into three Sections, namely – Bought Out, Castings and Piece Work.
This Section, as its name implies, had two separate functions which were closely related in that the first must be performed before the latter can be applied. These two functions were:
Filing of Orders
The Section had a staff of 16 of which two thirds were employed in the carrying out and maintenance of the first function. Files were maintained of copies of all bought out orders, on which were noted goods on account and any other references deemed necessary so that the invoice position with regard to any order could be speedily ascertained. Records of all packing cases received and returned were maintained and are reconciled with invoices and credit notes. The remaining five members of the Section dealt with the pricing of material issues on the various documents authorising issue.
Recollections of Baker Perkins 1961–1976by Anne Bates (now Sewter):
"I started work at Baker Perkins on 26th August 1961, the day after my fifteenth birthday, in the Drawing Office Archives and this was followed, in 1962, by time in the Drawing Office Print Room. The idea was to give new employees a taste of the different departments so that they could decide where they would prefer to work. After this I spent time in the Accounts Department [Cost Office]. We went to the Technical College on day release from 9.00 to 5.00 and then had to do an evening session, finishing at 9.00. The subjects covered were Shorthand, Typewriting, Maths and English and we took exams in all of the subjects. If we passed Stage 3 Typewriting with distinction BP gave us a dictionary which I still have and it has travelled to all my varied jobs with me. Whilst in the Accounts Department I had to pay out wages to the men in the factory and set off through the factory with my little wooden box to a background of calls and whistles to the Plate Shop. The foreman called the numbers – everyone lined up in order and I handed over the wage packets. Without fail one elderly man held onto my hand as well as his wage packet until I looked up, when he gave me a beaming smile – the foreman always told him off but it never made a difference.
After my time in the Accounts Department (often made noisy by my father, a main line engine driver blowing his horn as he went past the Accounts Office) I asked to go into the Typing Pool [late 1963]. This was a very large set-up with 30-40 staff, all hammering away on manual typewriters. As you can imagine it became somewhat repetitive and boring after a time, so I always tried to beat my previous day’s total of tapes completed and achieved high typewriting speeds. When, in 1966, Dorothy Kilsby, the supervisor, was asked to recommend a secretary for Messrs Jackson and Richardson (who then had their offices near to the Typing Pool), she put my name forward and I then worked for them, sharing an office with Dorothy Bryan (a school friend) who worked for the Export Company.
When the Holding Company building was completed  we moved across into the quite palatial surroundings. After working for Messrs Jackson and Richardson for a few years [in 1969] I was asked to work for Paul Edmunds [Group Controller] when his secretary left, which again I did for several years. During this time I was asked to work for the Holding Company directors when their secretaries were on holiday and was instructed on all their likes and dislikes. I also kept petty cash for expenses for the Holding Company staff.
Mr Edmunds retired early [in February 1971] and I applied for the position of secretary to David Castle who was the International Financial Controller. At this time a new extension was built onto the Holding Company building to accommodate the International people. I spent three weeks in London learning the job and living in a hotel in Old Brompton Road during the week with other people taking over other jobs in the International Company. We were all young and had a great time. Alan Deboo was working for the International Company and he took me to the theatre one night, followed by a tour of the city which was quite empty at that time, in his red sports car. I was taken by a secretary to the sales in Knightsbridge and bought a much reduced expensive coat (Baccarat) which I had for years.
I was very well paid whilst working for David Castle – he thought the Peterborough wages were ridiculous and insisted I was given increases quite regularly. The secretaries in Stanhope Gate who worked for the Export Company did not appear to be as well qualified as the Peterborough secretaries and yet they obviously were paid London rates.
In late 1972 David Castle left the company and I then applied to work for Peter Bryant who was the Deputy Works Manager of Baker Perkins Limited, also Production Manager and Computer Manager. I worked for him until I left at Christmas 1976 to have my first baby, Catherine. When I first took over the job I shared an office in the Outdoor Department which was very poky and grimy after the Holding Company but then later we moved into a nicer office on the ground floor. I gradually lost my financial advantages as I was not given increases until my salary had dropped to the Peterborough level.
I worked for 15 years for the Baker Perkins companies and enjoyed it all; it was a real family firm with a wonderful atmosphere. We used to go to the social club to the dances on Tuesdays and sometimes on Saturdays. My brothers were apprentices at Baker Perkins, one a plater and the other a turner. My elder brother Frederick John was a student apprentice and during his time at Baker Perkins the plater apprentices were taken to the Shipyards in the UK, at a time when they actually had ships in them. Baker Perkins gave them a good grounding in engineering and they have both had very varied engineering careers."
The following was produced as part of the process of Apprentice training. Periodic training sessions were organised when the heads of key departments described their departmental responsibilities and the relevance to, and interaction with, the rest of the company organisation.
Management accounting may be defined as the application of accounting and statistical techniques to the specific purpose of producing and interpreting information designed to assist management in its functions of promoting maximum efficiency and in envisaging, formulating and co-ordinating future plans and subsequently in measuring their execution.
In Baker Perkins, we try to achieve this by budgeting and comparing these with actual results attained in each period.
For purposes of accounting and control, the company’s business is split into divisions. These are:-
Our accounting system is arranged to show the net profit made by each division and the important figures are summarised monthly on trading statistics for each division. These show:-
Items (1) (2) and (3) will probably be self-explanatory but the remaining items need further explanation.
(4) Gross profit: This is invariably referred to as the “uncorrected Sales Margin” and is the difference between the selling price to the customer and the factory cost, this being:
1) Cost of the raw material and the bought out material included in the manufacture.
2) Direct labour cost of manufacture.
3) A proportion of factory overheads.
The term ‘factory overheads’ needs further explanation. This is an addition to the material and labour cost to cover the indirect costs of running the factory. These include the use of cranes, labouring services, salaries of various works personnel (foremen, shop clerks etc.) electricity, depreciation of machine tools, repairs, maintenance, etc. You will appreciate that we cannot know the total factory cost of building a piece of plant or equipment by merely taking the material and direct labour costs included, but must also add the proportion of these indirect costs. The basis of allocation of these to each job is by a pre-determined rate per hour added to all labour costs. This rate per hour which we call an overhead rate, has been carefully calculated for every class of machine and hand rate in the factory. It varies considerably according to the class of work, and may only be 5 or 6 shillings for a painter up to something over £2 for an expensive machine like a Plano Mill. The average machine in the Machine Shop costs anything from £1 to £1.10.0. per working hour to operate, in addition to the wages of the operator.
(5) Sundry Adjustments to the Gross Profit
A) Foundry Profit and Loss
The Westwood foundry is organised almost as a completely separate business. It sells its castings either to the stores or to outside customers, buys its own raw material, pays its wages and expenses, and tries to operate at a small profit. This profit of course has to be disposed of somewhere in the company’s tracing statistics. This is conveniently done as an adjustment to the uncorrected sales margin.
B) Factory Overhead Variance
The overhead rates mentioned in (3) above are calculated with a view to absorbing the total indirect cost of running the factory. I am sure you will appreciate that only a miracle could achieve this exactly. The difference, known as variance, is written off each month.
C) Stocktaking Gains and Losses
As material is issued to the shop floor, it is priced and the value deducted from stock. Annually we take an inventory of all material remaining in stock. This is valued and compared with the book values. There is inevitably a difference which arises through wastage, losses or clerical errors. Here again the difference must be written off.
(D) Sundry other adjustments
These include the cost of operating Spares Department, Despatch, Sales of Scrap Metal and Swarf, etc. At this point we have arrived at a corrected sales margin, out of which we must pay:
A) Selling Expenses
These expenses comprise the salaries of sales office staff and representatives, travelling expenses, cost of exhibitions, advertising, cost of running representatives’ cars, telephone calls, postage, etc.
B) Commission to Affiliated Companies
A large part of our export business is conducted through Baker Perkins International Ltd. who receive a commission on turnover for their services.
C) Drawing Office Expenses
It is a Group rule that drawing office expenses are included in contract costs thus forming part of work in progress. Draughtsmen are required to book their time and time sheets are evaluated at hourly rates including a proportion of drawing office overheads.
The portion attributable to contracts is carried forward until such time as the contract is dispatched, when it is written off. Time and overheads spent on development work is written off as incurred.
D) Administrative Expenses
This includes the salaries and expenses of the Accounts Department, the Managing Director’s Department and his deputy, the Computer, Travel Bureau etc.
E) Sundry other expenses, such as obsolete stock and unremunerative work
Deducting the expenses A) to E) from the corrected Sales margin leaves an Operating Profit which is virtually the net profit for the company, subject only to taxation and interest and Group administration charges.
In any business, the management must look ahead to find work to keep the business going. Management accounting includes the conversion of this forward planning into money values, so that all sections can plan their future activity.
This forward look is called a budget, and we employ a Budget Officer whose job it is to act as liaison between Sales, Factory and Drawing Office managers and convert their estimates into money values.
The first move in the preparation of the budget is for Sales Managers to estimate their orders for the coming year. They do this partly from their own personal knowledge of market conditions and partly from information gathered by their representatives, who are in touch with customers throughout the country. The same principle applies to exports, operating from their London Office in Stanhope Gate and through the Regional Offices.
When the outline budgets have been prepared, it is the usual practice for them to be discussed by Sales, Works and Drawing Office managers, the Budgets Officer and the Financial Director. It is then possible to estimate the volume of turnover for the ensuing year. Factory labour and overhead costs are also estimated, as are the expenses of operating the Sales Departments and Drawing Office, and the cost of general administration. This is a lengthy exercise and may take anything up to 5 or 6 weeks to prepare. The figures are then put together in the form of a set of draft trading statistics. Finally, the draft figures are submitted to the Directors, who may suggest amendments.
The Trading Statistics, which show the actual sales, costs, expenses and profit, are prepared at the end of each month to show the trading position from 1st January to date. The appropriate portion of the budget is shown as a comparison beside every actual figure and variations between actual performance and budget are readily indicated. Similarly, Sales Managers are provided with schedules of their selling expenses compared with budget. The same principle applies to Drawing Office Managers and the Works Manager, and in addition all shop superintendents and independent foremen are supplied with schedules of their overheads. These returns also show the appropriate proportion of the budget.
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