This Head Office administration department appears to have been originally titled the ‘Accountancy Department’ (a 1933 photograph has a sign displaying this name), but was known in the years prior to the 1970s computerisation of the Bank’s accounting records as the ‘Accounts Department’. As part of the computerisation process, the department was renamed as the ‘Administration Department’ or ‘Administration Branch’ and had its own Bank/Branch Sort Code: 77-85-00. During the 1980s, the name changed again, the new title becoming ‘Accounts and Banking Services Department’ – a title that probably most accurately described its function, throughout its existence, as a provider of financial and statistical data to Senior Management, and the provision of certain banking services to the branch network.
The origins of the Bank’s centralised Accounts Department are not known, but a 1925 description of the Head Office in Edmund Street included the phrase the accountancy department is …. provided for. Moreover, the requirement of such a facility was alluded to by the first General Manager, J P Hilton, in his 1927 book Britain’s First Municipal Savings Bank that referred to the Head Office [being] the centre for the amalgamation of the Bank’s figures and [that it] must maintain the statistical and accountancy departments.
It is believed that the Bank’s first accountant was Arthur M Hodgkins, who joined the staff on December 29th 1919, and was presumably responsible for the tasks referred to by J P Hilton. Arthur Hodgkins later became a Branch Manager (he is listed in the Bank’s Annual Reports for 1928 to 1931 as being in charge at Kings Heath and Selly Park), and retired on May 24th 1948.
The first reference in the Bank’s Annual Reports to the officer holding the position of Accountant was in 1928. From at least that date, the Bank employed a minimum of one qualified accountant, the following being the heads of the Accounts Department:
1928 - 1958 Neville G Yardley
1958 – November 30th 1970 Eric A Howlett
December 1st 1970 – January 23rd 1978 J J (‘Jack’) Hollist
January 24th 1978 – November 20th 1979 David J Parkes
Other qualified accountants known to have worked in the Department are:
C B Coney
Joe W Hoccom (who later became the Bank’s General Manager)
John W M Hemming
When the Bank moved into its own purpose-built Head Office in Broad Street in 1933, a large office was allocated to the Accounts Department on the east side of the first floor. The head of this department occupied either a small office nearby or, more usually, a screened-off portion of the main office.
By 1933, the BMB had 58 branches and the ‘amalgamation of the Bank’s figures’ must have been one of its prime tasks. Each day, every branch was required to submit a Daily Cash Return (MB 21) to Head Office (see Branch Accounting). This return summarised the branch’s activities for that day by showing that sums received when added to the cash at the start of day, equalled the total of sums paid out plus the value of cash-in-hand at the end of the day.
The function of the Accounts Department in relation to the Daily Cash Returns was to total all of their individual values, so as to produce overall totals for the Bank. By the 1950s/1960s, with some 70 branches, this was a considerable task, which expanded as the Bank’s products expanded.
At this date, this summarisation was achieved by the manual completion of two very large sheets – one for the left hand side (deposits or credits) of the Daily Cash Returns; and the other for the right hand side (withdrawals or debits). Each sheet listed the branches (in alphabetical order) in its first column, and had additional columns headed to correspond with the entries on the Daily Cash Return. After sorting the branch’s returns into alphabetical order, two clerks would extract the figures branch-by-branch until the sheet was complete – telephoning a branch whose return was missing (eg due to a postal delay).
A comptometer operator would then total all the columns of both sheets, ensuring that the column totals cross-cast to the sheet’s Total column. Failure of the sheet totals to cross-cast would require each individual branch’s line of entries to be cross-cast until the error(s) was found. Once balanced, it was then possible to present the Bank’s Accountant and General Manager with a summary of the previous day’s transactions – usually by late morning. The whole process was repeated at the end of each calendar month, when the amalgamated branch figures, plus transactions generated in the Accounts Department’s Cash Book and Journal, would be posted to the General Ledger. A Trial Balance of the General Ledger would then complete the monthly exercise.
The General Ledger was a magnificently huge, leather bound tome, used since the commencement of the Bank. Journals, and other prime books of record, were similarly impressive, and when full, had their titles/dates embossed on the cover.
In the late 1960s, the system of daily returns was replaced by one based on weekly returns, branches reporting cumulative figures for the current month. This new procedure still reported the individual daily figures for deposits and withdrawals to depositors’ accounts, but they were totalled to provide weekly amounts that were added to the totals for the previous week. It was still necessary for branches to report certain information (eg amounts taken for utility bills; transactions to Head Office suspense accounts, etc) on a daily basis, and this was done by a system of Nominal Account slips. The balancing, reconciliation, and settlement of the Nominal Account slips were achieved by a massive sorting and add-listing process by a number of staff.
The labour intensive procedures described above, continued until the advent of computerisation of the Bank’s accounting system gradually reduced the task. As an individual branch’s records were computerised, the totals of their daily transactions were included in a computer report; these were amalgamated with the manual returns of the gradually diminishing number of non-computerised branches. Computerisation was completed in March 1976, and the manual systems to amalgamate figures that had existed for some 57 years were no longer required.
As stated above, the manual amalgamation of paper returns from the branches would normally be completed by late morning, each day. The remainder of the day would then be utilised to record and reconcile the data that had been collected.
The daily data collected from branch transactions, plus additional returns showing the numbers of transactions processed, were recorded at both branch and bank level, to provide comprehensive statistical information. During the early years of the Bank’s existence, performance charts were maintained for each individual branch. Total volumes at Bank level were reported at the year-end in the Bank’s Annual Report, and form the main source for the statistics reported on this website.
In later years, particularly following computerisation, statistics formed a key element in allocating certain income and costs, in the process of the costing of individual branches. The amount of the profit achieved at branch level was calculated by the Accounts Department, and gradually expanded from ‘one-off’ exercises, to eventually becoming a highly sophisticated system encompassing all branches on an annual basis.
Reconciliations were performed between the Bank’s records, and statements received from other institutions. The principal institutions involved were other Banks (Midland; Lloyds; Barclays; Central TSB) that the BMB had accounts with, and Birmingham Corporation Departments and various Utility Companies with which the Bank had agency arrangements
Midland, Lloyds, and Barclays were used both as collecting banks for cheques paid into BMB depositors’ accounts, and as agents for BMB branches to obtain cash. The determiner of which of these three banks was used by an individual BMB branch was dictated by location – ie the nearest was used, although in the case where more than one of the clearing banks was more-or-less equidistant, Midland was first choice, and Lloyds second preference.
Reconciliations of the credit balances held by these banks (per their statements) were therefore performed against the values calculated by the Accounts Department from the transactions to those accounts reported by the BMB branches.
The BMB’s accounts held with these three clearing banks were at their principal Birmingham offices, ie New Street in the case of the Midland Bank, and Colmore Row for both Lloyds and Barclays. However, the Midland Bank, New Street branch was the primary account holder for the BMB. The volume of business transacted at the New Street branch was considerably increased with the growth of BMB depositors having cheque accounts – see Current Accounts Department.
The above-described relationship between the BMB and the three clearing banks probably existed for over fifty years. Cheques deposited by BMB customers (probably very few in the early years of the Bank) would be paid in at the designated branch of Midland, Lloyds, or Barclays on a daily basis. The withdrawal of cash (probably, also a rare event in the early years of the Bank) was done on an ‘as-required’ basis; a draft for the appropriate amount being presented by BMB staff. The cash would generally be delivered to the branch by a member of BMB staff (probably two members of staff for larger sums) walking to and from the clearing bank. Cash that was surplus to requirements, a situation that would have occurred quite frequently during the first twenty-five years of the Bank’s existence, would have also been similarly transported, although a 1923 report to the City Council (justifying the purchase of a motor car) stated:
Apart from the desirability of providing for a ready and constant supervision, a considerable amount of cash, etc., is collected from the Branches, and the practice of meeting this by hiring taxis has reached the stage of being expensive and lacking in despatch.
Walking to and from the local clearing bank was not an option for those BMB branches located on housing estates on the outskirts of the city. In these locations, there would be few businesses requiring a commercial bank, and few individuals requiring a cheque account. For example, Kingstanding branch ‘banked’ with Barclays at Perry Barr, a distance of about 3 miles, requiring the use of public transport, or the manager’s private car.
However, the Head Office branch located in Broad Street would often use a taxi, with three or four staff, to collect cash from the Midland Bank in New Street. This method would be used because of the large sums involved, particularly when a large outflow of cash to depositors was anticipated, eg on the day of the month when the salaries of Corporation employees were credited to their accounts.
The large inflows of cash experienced by the Bank in its first twenty years were largely invested directly with the City Treasurer. This policy was amended during the Second World War, when excess deposits were invested in Government Stock in order to help with the war effort. After the War, the policy of investing in Government (and Local Authority) Quoted Securities continued, and the Accounts Department was more involved in these investment decisions, although still with the advice of the City Treasurer.
From 1957, the Accountant would have been responsible for ascertaining the amount to be placed with the National Debt Commissioners in respect of deposits in the new No 2 Department. The late 1960s saw a widening of the securities that were available for the Bank’s investments, but the City Treasurer (with the assistance of London investment brokers) would still provide advice and handle the actual transactions.
The involvement of the City Treasurer ceased when the BMB became a Trustee Savings Bank in 1976. From this date, the Accountant became responsible for making investment decisions, and Unquoted Local Authority Securities became a valuable source of higher rates of interest, as the variable rate deposit facility that had been provided by the City Treasurer since the Bank began was no longer available.
The break from Birmingham Corporation on March 31st 1976 brought to an end another fundamental aspect of the Bank’s constitution: the City Council’s guarantee of the security of all deposits placed with the Bank. The Bank (now the Birmingham Municipal Trustee Savings Bank) was now an independent trading unit, responsible for ensuring adequate financial provisions were maintained. The monitoring of those provisions now became the responsibility of the Bank of England, who required the submission of annual returns that provided more detail than that shown in the Annual Report. These returns were completed by the Accountant, and subsequently discussed at meetings with Bank of England officials.
These monitoring meetings were normally held at the Bank of England in London, but on one occasion when the Bank of England was experimenting with a policy of ‘getting out to see the TSBs’, the meeting was held in Broad Street. Although these meetings were straightforward, the Bank of England did raise an awkward question at the first one: ‘Did the BMTSB’s Savings Coupons illegally violate the Bank of England’s monopoly to issue bank notes in England and Wales?’ Fortunately, they were satisfied with the explanation provided, and it was not necessary to recall the thousands of issued coupons.
The dependence of the Bank on the services of the branches of Midland, Lloyds, and Barclays, ceased following two developments in the 1970s. These developments were the collection and delivery of cash to branches via a security company, and the Bank (as a TSB) becoming a member of the London Clearing following the Central TSB becoming a member of the London Bankers Clearing House in 1975.
With the growth of cheque accounts, the balances of which were withdrawable on demand, and the growing tendency for salaries to be paid directly into bank accounts, the demands for cash in branch tills increased. This demand was matched by the growing security threat to Bank staff carrying cash outside branch premises. Consequently, the delivery and collection of cash was contracted to Securicor (and later, to Group 4). Branch Managers no longer requested a draft from Accounts Department, but ordered a cash delivery and/or cash collection. These orders were handled by the Accounts Department, who arranged for the security company to collect bulk sums from the Bank of England branch in Birmingham. The security company then split up the bulk cash in accordance with instructions from the Accounts Department. This service was available to branches on a twice-weekly basis; the delivery runs being spread across the branch network over the five days from Monday to Friday.
In addition to supplying Bank of England notes and coin, the Accounts Department also supplied branches with Travellers’ Cheques and Foreign Currency – these latter items being obtained from Central TSB in London. The Accounts Department were responsible for making up individual customer orders, which were then despatched to branches via the security company.
With the advent of computerisation, and the entry of the Bank into the London Bankers Clearing System, the reconciliation of branch clearings became simpler – the Accounts Department now verifying the transactions through Central TSB only. Additionally, computerisation had decentralised cheque accounts, so there was no longer a reconciliation with the records held by the now defunct centralised Current Accounts Department.
Reconciliations and settlement payments continued unchanged, however, with the various Corporation Departments and Utility Companies, with which the Bank had agency agreements. The method of settlement with these agencies varied, but the system used for the main collections (Gas; Electricity; Water; and Rates bills) was typical. Branches posted paid and receipted account stubs, daily, directly to the utility company. These stubs were accompanied by a listing (account number and amount), the branch keeping a duplicate copy. The branch advised the Accounts Department of the totals collected for each utility company, also on a daily basis, by including the amounts in its ‘Deposits for Clearing’.
The utility companies advised Accounts Department of the amount collected each day, by each branch. Accounts Department then reconciled these returns to the branch figures, and subsequently paid over the sum collected on a weekly basis. For this service, each Utility Company etc paid the Bank a ‘per item’ fee – this amount being calculated after the Accounts Department had reconciled transaction numbers reported by branches and the agents. Due to the large number of transactions relating to these agency agreements, this arrangement provided the Bank with a considerable amount of Sundry Income. The arrangement also generated large inflows of cash when households in a particular district all received bills with a similar ‘due date’ for payment.
The Bank’s own bills were paid by the Accounts Department on a weekly cycle. On receipt, invoices were submitted to the appropriate department or branch for verification that the service or goods had been supplied satisfactorily, and the City Treasurer was then authorised to issue cheques in settlement.
Depositors requiring to utilise their savings to make a large purchase (eg a motor car), and not wishing to make the payment in cash, would request their branch to provide an ‘M’ Account cheque, which was similar to a Banker’s Draft. These cheques were drawn on a separate account held at the Midland Bank, New Street, and were issued by the Accounts Department, who were also responsible for reconciling the balance of the ‘M’ Account. In due course, this centralised system was replaced with a branch-based system: branch managers drawing their own cheques – known as ‘B’ Account cheques. Even after the introduction of personal cheque accounts for customers, these quasi-Banker’s Drafts remained popular – particularly with car dealers, who knew that they would always be paid, unless stolen.
One of the most important tasks of the Accounts Department (as far as the Bank’s staff was concerned) was the payment of Salaries and Wages. The Department was responsible for administering the usual salary, PAYE, and National Insurance procedures for all the monthly paid staff, taking instructions regarding appointments, promotions, and leavers from Senior Management. It was not until the late 1970s that the Bank created a Personnel Department, which eventually took over the Salaries and Wages function.
The monthly payment of net salaries was made by crediting a BMB account nominated by the employee (usually at the office where he or she worked). In the late 1960s, this method was replaced with a system that was based on individual ‘Salary Accounts’ maintained in Accounts Department, that gave greater privacy than salary credits to a normal bank account that was accessible to other members of staff at that branch. Withdrawals from individual accounts were made through the clearing system - Accounts Department maintaining the individual employee accounts, and the overall cash balance of these accounts being held in a Head Office branch Non-Personal Account.
Accounts Department was also responsible for paying the weekly wages (in cash) of certain Head Office staff, eg the cleaners. Individual branch managers paid the wages of those branches (the majority) who employed a cleaner directly, rather than the contracted services of a company.
the most obvious product of the Accounts Department was the published Annual Report, which was the culmination of a year’s work by
all the staff in both the Administration functions and the branch network. As described elsewhere (All by Hand and The Annual Balance),
until computerisation greatly simplified the exercise, the manual effort to accomplish the routines required at March 31st each year