146. Its Functions

The functions of the collection department vary in different institutions. Even the titles by which it is known are so different that the department in a strange bank would be hardly recognized. This is true of other departments, as well. The name collection department indicates that the department bearing the name makes collection of some kinds of checks, drafts, notes and other items with which the bank is continually dealing. In the majority of banks it has charge of the collection of items payable in other cities, and this is the kind of department we will attempt to study.

147. Sources Of Items

The foreign items are charged to the collection clerk by the receiving, note and mail tellers, the discount clerk and the loan clerk. The only items which the paying teller charges to the collection clerk are the items he cashes over the window during the day. These will be very few in number and small in amount, because the bank would prefer having advice of payment on a check of any size before handing out the cash on it. It will usually recommend that the item be left for collection, in which case the receiving teller takes charge of the item presented. The paying teller is also asked during the day to cash a few checks on other banks or private bankers and since these will have to be charged to the note teller for collection, it will be better to add the foreign to the list and let

Receiving Teller

Items Deposited for Collection

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Figure 117. Record Of Items Deposited For Collection the note teller take care of the foreign with the items he receives during the day.

The bulk of the foreign items are presented at the receiving teller's window if the bank does a large counter business. He should receipt for the item presented, in short in the depositor's pass book. If a few depositors have large numbers of foreign items, they should be given a separate pass book in which the collection clerk himself should receipt for the total day's deposits. The receiving teller should take a memorandum of the items left for collection and obtain a receipt from the collection clerk for them at the close of the day. Figure 117 on page 250 shows a suitable book for listing and obtaining a receipt for the items deposited. Depositors in need of money will probably ask if collections are paid and if the receiving teller makes a practice of extending the memorandum to the money column in the pass book, when the item is paid it will be well for him to make some memorandum in his own record, and nothing could be better than to stamp the date, on which the extension is made, in the last column.

The receiving teller also charges all foreign items taken as cash to the collection clerk.

The note teller receives very few foreign checks in payment of the notes, drafts, etc., for which he is responsible. In fact he should refuse to accept foreign checks. However, if the bank transacts much business by mail, it will be good policy to open all letters received after the morning additions and collect as many of the items as possible. A large proportion of these items will be on clearing house banks and the note teller will be able to send the checks through his exchanges without upsetting his work in the least. He should charge any foreign items enclosed, together with those charged to him by the paying teller, to the collection department.

Foreign Collections

Figure 118. Foreign Collection Register.

The mail teller also charges the collection clerk with all the foreign items received in the morning mail.

The discount clerk should turn all notes payable in other cities over to the colection department, obtaining a receipt in the form of an initial in the tickler. He should give the collection clerk ample time to get the notes to the place of payment so that there will be no doubt about presenting on the due date. Some banks allow the discount clerk to forward his own items for collection, but this duplicates letters and serves no valuable purpose. The collection clerk is in a better position, because of his knowledge and machinery, to collect the notes than is the discount clerk.

The loan clerk will probably never have any items payable in other cities, but if he does they should be charged directly to the collection clerk.