Page:Roy Ralph Hottman - Practical Collection Procedure (1923).pdf/28

14 provide for such an event. It is important that the report show whether the item, Merchandise, is computed at cost price or market price, in order to interpret the report in- telligently. Furniture and fixtures, and also equipment, are usually valued too high by the smaller merchant, being reported frequently at the original cost price or nearly so.

Cash in bank, land and buildings should be checked up to see that the figures are not exaggerated. Especially with land, it is cheaper to corroborate the figures and know’ for a certainty that it is valued correctly and is unen- cumbered, than to see this asset disappear entirely at a forced sale. With the notes receivable it is ‘well to request a list of them if they aggregate a considerable‘sum and have the local bank check it over and advise how much of it they consider good. For a note, just like any account, is worth- less if the maker has no means. Usually one does not give a note unless it is expected that it will be paid. If not paid, it can be reduced to a judgment, certainly, but of what value is that if there is nothing wherewith to satisfy the judgment ?

The item of insurance is of importance. Unless the merchant shows enough assets, if he carries no insurance, to. be able to withstand a fire loss, there is danger in ship- ping to him. No one knows when a fire will break out, and yet the average small merchant neglects his insurance to an alarming extent. Even a large number of individuals, married and single, belittle the importance of insurance. Whenever the credit man has an opportunity of doing so, he should drill into his customers the necessity of carrying ample insurance, not only as a benefit to his creditor, but for his own protection.