THAT DRUNKEN DEN.

NZ Truth, Issue 139, 15 February 1908, Page 4

THAT DRUNKEN DEN.

MORE ABOUT THE WORKING MEN'S CLUB. A Suggestion for the New Manager. Open a New Set of Books and Bring Oat a Decent Balance-sheet. With regard. to ; tha.t dreadful drinking den, the Working Men's Club, and its precious private balancesheet, 'issued recently and severely criticised m "Truth" last week, this paper .* intends to have> a little further say -a.nd ask some questions. The last balance-sheet, as was pointed out last week, was such as could not be signed by the Club's auditors. This was due, we have since been informed by a person who ought' to know, to an error of .about £17 m cash, which instead of being banked was either still m the hands of the stewards or had, not yet been collected from memr bers. The auditors, we believe, were willing to sigh the balance-sheet with a tag to this effect. Whether this is so or not "Truth" does not know, nor does it care. It has .no intention of juggling with figures, but of exposing -the -, methods upon which these balancersheets are compiled. With tho balance-sheet under review last week we have no fault to find from an. accountant's point of view, but it vv 16 Hie methods of its compilation that we most seriously object ; because it ' ■ apt to be misleading to members. A balance-sheet of a club . of this sort should beAS SIMPLE AND A=s EXPLICIT as possible so that every member shall have a chance of knowing exactly m what ; position the Club stands. Previous half-yearly balancesheets qf_ the Club have been made up m the same manner as the one reviewed "last week, and to show that this style of balance-sheet is imsatisfactqry, we quote an article m "Business " Life," of September last, referring to the balance-sheet for the yeat en-ding June, 1907 : — A .cursory; glance, at the figures reveals the fact that the accounts combine trading transactions and the records of the Club, and a difficulty is thus created at once m endeavoring to submit accounts'; because these •' essentially different parts of the undertaking as a whole require different treatment. Viewing the Club as a trading concern, it requires to keep a Trading' Account, showing the profit or loss on sale of tobacco, liquor, and rcfreslunents. Apparently this has been' done, so as to show tlio gross profit on the turnover m this department. An ordinary trader would then early "Mis gross profit to a Profit and Loss Account, and charge against it the expenses of the administrative part of the undertaking. To dp t this effectively' m the present rase, it would be necessary to analyse such it?ms as "Salaries and Wares, " "Fuel," "litehtiiiß,"' "Printing," "Advertising," "General Exnenses," "Rent," etc., etc., and ch^rpe a fair proportion' against the gross profit of trading, and part against the revenue from Members' Subscriptions. If this were done, we would have a Goods' Account showing the gross profit on sale of refreshments, etc., and a Profit and Loss Account showing whether or not that gross profit was sufficiently large to leave a net profit, after charging the? office and general administrative expenses necessary to conduct this part of the Club's business. We would also have an income and Expenditure Acdount, credited with Members' Subscriptions, Entrance Fees, etc., and debited with that proportion of the, general expenses 'necessary to the upkeeD of the Club as a social institution. If the records were kept m. this way. sonic light might be thrown on the unsatisfactory position revealed by the year's Profit and Los* Arcount. It will be seen that the Club has gone back to the ex-tent-of about £60, for a balance of £368 was' brought forward from last year's Profit and Loss Account, whilst the final balance m this year's accounts is only £308. As the accounts are framed, it is not. ©a"s!y for the members of the Club to decide as to 'the cause of this drift. It may be a net loss on the trading part of the venture, caused by selling prices being too low, or by administrative expenses being too high, or it may be due to leakage (m more senses than one) of stock. On the other hand, it may be that the subscriptions, entrance fees, etc., are not hi^h enough to pay lor the cost of providing the social and other advantatres generally associated with Club life. ■ ■ : . ' It shows very plainly .that the Club's methods of book-keeping is faulty and that the new manager should op&n up a new set of books and see that the Club's financial transactions jare made plain to members every half-year. The late manager had the article we refer to brought under 'his notice, but m spite of that the accountant who made up the last balance-sheet was given instructions to make it up m exactly the same way. The accountant was m no way to blame, and m reflecting upon the balance-sheet, we do not wish to implicate him m the nefarious business. It is the rotten system of bringing a balance-sheet down on such lines that members cannot tell why the profits are so small. Certainly the last half-year has shown much improvement upon the previous half year. The balance-sheet end ing m June last shows m Profit and Loss Account a balance of £308 9s 3d and a balance brought forward of £368 2s sd, leaving A LOSS OF £59 13s 2d for the half year, whereas the half year just past shows ?. profit of £500 odd, a .very Big. difference, truly. But this is not enough. Everyone knows what an enormous bar trade is done. That the Club is m reality a huge drinking den. There is no bar m town that does an equal drinking trade,- and yet publicans can pay £0000 and £7000 for five and six year leases, pay exorbitant rents and sell just as good liquor as the Club, and still show a profit. If the Club can only make a profit of £450 m the year, bow do the publicans keep out of the .bankruptcy court ? Or, to put it more pertinently, if the pub-