History of the CARL System

Douglas Thompson

The CARL System has an interesting history. As it reaches its current incarnation as a powerful web based application, it is useful to look at the past and how it came to be. What follows is a detailed history of its development through the eyes of the man that created it. Douglas Thompson.

Image courtesy of Economia

By way of introduction I will tell you a little about my background because it has some relevance to or bearing on the overall subject matter of this paper. I was born in London in December 1936 and spent months in hospital with pyloric stenosis unable to keep any food down which came back instantly with projectile vomiting. At deaths door because of starvation and not expected to survive the night my mother asked if she could take me home because she didn’t want me to die in hospital. Once home she fed me on mashed pears mixed with Carnation milk and here I am today. Life is full of little mysteries and I often wonder what inspired my mother to do what she did when the medical profession had been trying everything for months to get me keep my food down.

1939 – 1941– EDUCATION
When war broke out my family, with a brief stop in Wales, moved to Huddersfield, where I was educated at Birkby Council Primary School, which was just around the corner from where I lived, opposite a huge factory manufacturing explosive war materials. I think neither I nor Huddersfield would be here now if it had been bombed. Then in 1946 we moved to York, my parents’ home town, where my father was an engineer at Rowntree, in charge of the project designing the Kit-Kat machine. Around the corner from Rowntree was Haxby Road Junior School where I sat and failed my 11 plus to go to grammar school and became one of the first children to experience comprehensive education which had just been introduced to replace grammar schools. Comprehensive education students were streamed according to their abilities and performance assessed throughout the term, which ended with written examinations similar to those set at grammar schools, except I recall some academic subjects were not taught at my school and some technical subjects were not taught at grammer schools.

Apart from my school work I had been studying the violin for about five years with some degree of success, playing a violin solo at a concert given by the York Youth Orchestra and playing with the York Youth Ensemble, at a dinner attended by Princess Margaret during the Festival of Britain. It was after this I decided I wanted to become a professional violinist. However, my father had other ideas and arranged an interview at a firm of Chartered Accountants in York, where I started work as a junior office boy, doing a range of menial tasks.

As all the clerks were grammer school boys this led to me being bullied, however, I took it with a pinch of salt when sent on fool’s errands in the rain and was locked in the office vaults in the dark just before the offices were due to shut. The bullying did not last long, when because of my neat handwriting I was asked to write up the ledgers of large estates for which the firm was responsible and this was regarded as important clerical work which required fitting new pen nibs and ruling ‘blob free’ straight lines with a round ruler. The ability to do these things were the hallmark of a clerk with prospects of becoming an accountant. However, I think the Principal of the firm had a lot to do with my ledger writing appointment because she was a talented cello player with the Yorkshire Orchestra and our mutual interest in music made conversation easy. One day I found out she had taken honours in her final accountancy examinations and I asked her to what she attributed her exam success. She replied “I used to ask myself. ‘Is there anything they can ask me I don’t know’ and if there was I made certain I knew it”. This made an impression on me and when I need information I make sure, as far as possible, I am in possession of all the necessary facts. I have applied this approach many times in my professional life when defending clients in disputes or advising them on business matters.

When I was seventeen my family moved to Birmingham and on the basis of a letter of commendation from my employers in York I was accepted to work at a firm of Chartered Accountants in Colmore Row, which to my delight was located within walking distance of the Birmingham School of Music (BSM). However, my father considered I should be standing on my own feet by now and if I insisted on studying music I should pay for my hobby, violin playing. I did not need to qualify as an accountant to realise after paying my mother a contribution towards housekeeping I didn’t have enough to further my musical education. However, when I discovered the BSM had a Manton Faulkner UK Scholarship Award for violin playing I applied. Winning that scholarship, paid my tuition fees for one year and whilst I continued working at accountancy in the daytime I spent the rest of my time trying to pursue a career in music.

Inevitably my call-up papers arrived for national service and I applied to join the Royal Marines Band to study at the Deal School of Music. I easily passed the audition in Liverpool but was told I would have to play a band instrument which meant signing on for three years and this needed parental consent. I shall never forget, when I returned home my mother, who had always been supportive of my musical ambitions, was delighted and signed the form immediately, however, when my father came home he flatly refused to see his son waste three years in the services and I ended up working with radar electronics in the RAF, the test for which was to see whether I knew what a hammer, a screwdriver and soldering tool were used for.

However, just before I was physically required to attend On Her Majesty’s Service (OHMS) I was sent by my employers to check the books of a small family printing company where I discovered the wages clerk, was manipulating them to her advantage, which I duly reported and she was replaced. This experience intrigued me and I started thinking how could this be prevented in future and I designed a ‘fraud proof’ wages book which the client firm then printed for their own use. Without further thought about the matter I then went off to do my national service where I disliked the work so much, I regularly volunteered to go on night fire watch duty, so I could play my violin and practise in the huge underground operations theatre, which had excellent acoustics. At that time, I was studying the Mendelsohn Violin Concerto in E flat minor.

When I joined the RAF the cold war had started, military exercises were frequent and the Radar Stations on the east coast were the first line of defence and it was critical they should remain fully operational at all times. Personnel, of course, at the time of national service were being changed around all the time as servicemen were demobbed and fresh recruits taken in, it should therefore come as no surprise, if I tell you on one occasion my station failed an exercise so dismally, we were informed of an impending investigation to establish the cause.

On that particular exercise I was responsible for ensuring replacement units were immediately available to cover breakdowns but I could not locate them quickly enough. When asked why, I explained there was no system in place for tracing the location or state of radar units and I showed them why I had problems finding the correct units quickly. They then asked how I thought the problem might be solved and I remembered the ‘Kalamazoo Loose Leaf Visible Filing System’, which was infinitely flexible to be adapted to any number of record-keeping requirements especially the type I thought the RAF needed. It only remained for me to determine how many drop leaf cabinets and card inserts were required and how to analyse and arrange the Cabinets and design the layout and content of the Card Index System before the scrambled egg arrived, so called because of gold braiding on their peaked caps, to see the new control system in operation. I demonstrated how a person could instantly find the location of a unit and establish its history of repairs, maintenance, testing and operational readiness. They must have been impressed with what they saw because I later learned the system had been widely adopted. Also, after finishing my national service I met the managing director of the printing works, who told me he was printing the ‘fraud proof’ wages book for other businesses where he said the benefits were not only reducing the risk of fraud but also the time spent preparing wages records.

Still in pursuit of a musical career I returned to the BSM and played with the CBSO for a short while but realised after a few months working and speaking with other professional musicians, life was difficult. Many orchestras were being financially supported by the government and there was much uncertainty surrounding their survival. At some performances there were almost more people in the orchestra than in the audience. Time I thought to get some professional advice and my father and I went to meet the Principal of the BSM who confirmed my observations and concerns about a career in music. I then spoke to my violin teacher and asked for her honest assessment of my abilities. She replied ‘You will make the Halle Orchestra, but you do not have the nerves of steel to be a solo violinist’. I had great respect for the views of both my mentors and on their comments and my father’s wishes and advice I decided to look further into a career in accountancy and my father arranged an interview with a practising Chartered Accountant in Birmingham. Ironically, many years later when I met my violin teacher to buy a violin for my son she said “You had great potential as a violin soloist why did you give it up?”. Fortunately, at that precise moment her husband came home and I asked him how his company was doing to avoid answering an awkward question.

To come back to my change in career, whilst I did not dislike doing clerical work it was always conflicting with my desire to become a professional violinist. Neither career was getting anywhere. The financial rewards and security of a musical career were precarious to say the least; on the other hand, a career in accountancy clearly had potential. I had discussions with my employer and obtained information from the Institute of Chartered Accountants in England & Wales (ICAEW) and in the end I decided health, education and wealth were important and settled on becoming a Chartered Accountant. I sold my violin to pursue a career in accountancy where the first hurdle was to pass the Institute’s Preliminary Examination to become an articled clerk. This was the equivalent of school certificate and had to be passed in a minimum of five academic subjects, at one sitting, at A grade. I did a correspondence course and passed the ICAEW’s last preliminary examination coming 12 th out of 60 candidates. In April 1959 I became an articled clerk, which meant five years’ apprenticeship to study accountancy under the direction and supervision of a Chartered Accountant in public practice. I was lucky to have joined a small firm and have a principal who was excellent. I shall always be grateful for the value I gained spending five years as an articled clerk under his pupillage.

My articles passed without further comment beyond work and study, both of which I enjoyed, although I was never very keen on auditing. However, there were three incidents I recall, two related to clients and one related to a clerk. One of the firm’s clients had a very successful wire goods business and he patented the plastic coating of wire shelves that went into refrigerators. This led to him securing huge contracts and he asked if he could have regular accounts during the year. I was put in charge of setting up a book-keeping system, for quarterly accounts to be prepared without high additional costs. When I attended his business to prepare and discuss his quarterly accounts, he always took me to Birmingham Airport for lunch. It was on such occasion he offered me a job at a salary much higher than I was earning and a new Morris Minor 1000 if I would become his full-time accountant, with the prospect of becoming the financial director. I thanked him very much, but said I thought I would be more useful as a Chartered Accountant in about two years’ time. I had just passed my Intermediate examination coming 90 th out of 3,500 candidates sitting the examination nationally.

Another client I enjoyed visiting had a scrap metal business in Handsworth. He was not your run of the mill scrap metal dealer but was very well educated and had held the rank of captain in the army. He had a truly charismatic personality, competence and authority exuded from him, but he was no snob. On one occasion when I arrived at his yard and couldn’t find him in his office he shouted down from the top of a crane which he was painting. He entered into contracts with major car manufacturers to process their waste 3metal and had fleets of vehicles operating between them and his metal crushing and baling machines. He also wanted accounts more than once a year and as with the wire goods manufacturer I ended up discussing and interpreting the results with him and was offered a directorship when my articles finished. However, that is

not the purpose of this story. When I was working I always wore a suit because that was the expected dress code. On one occasion he had installed a new metal crushing machine and he invited me to have a look at it in action and then it happened, there was a sudden spurt of white paint which soaked us both ruining our clothes. Without hesitation, he got clean overalls from his office which we changed into and he took me to a tailors in town where he bought me two complete new outfits. I protested about the second, but he said I must accept it as an apology. The suits were Chester Barrie costing far more than I could afford, I thought, he could simply have paid for my suit to be dry cleaned, but his immediate response to the accident, decisive action and unexpected generosity made a deep impression on me.

Both those companies went on to become substantial public companies the latter becoming a FTSE 100.

I passed my finals in November 1963 and during the five months before my articles ended I went on audit with a new trainee, to a large manufacturing company making spoke wheels. This was a true audit with company accounts prepared by a qualified accountant who would take me out to lunch whilst my assistant stayed in our designated office, a large boardroom decorated in powder blue. Returning from lunch one day I discovered the clerk had used the firm’s vouching stamp to put a frieze around the wall. Asked why, he said the room looked plain and he was bored. After telephoning my principal who eventually arrived with the managing director, I spoke with the accountant who told me the room had just been redecorated. After profuse apologises from my principal and myself, everybody agreed with my explanation that it was an unforeseeable event, the trainee was dismissed, the room redecorated, our professional services retained and on reflection the whole incident regarded with some amusement.

When notice of my qualification came through, my father, who by now was lecturing in engineering remarked “Just because you’ve passed your finals doesn’t mean you know it all. Go and teach it.” Examination places were not given for the Finals, but I knew my favourite subject was taxation and I applied and was accepted for the advertised position of lecturer in taxation at Wednesbury College of Commerce, having rejected a very kind offer from my principal of a partnership in his practice which had expanded over the five years I had been with him.

A few months before I was due to take up my appointment at Wednesbury my father put me in touch with his solicitors who were acting as executors of an accountant’s estate, which included a small practice. I contacted them and they told me the decent jobs had been taken but there were a few businesses left which they were having difficulty getting rid of. They gave me their names and contact details and said I could have them for nothing. The list consisted of a mixed bag of small businesses, operating as shopkeepers, painters, decorators, electricians, pattern makers, engravers and a significant number were working in the gun trade in Dickensian quarters in Aston, near the centre of Birmingham. They undertook every step in the production of quality sports guns. Barrels, actions, stocks, engraving, gun barrel browning, gun barrel boring. You name it they did it and the double barrelled shot guns they made carried famous names. I met some real characters acting for clients in the gun trade possessing remarkable craftsmen’s skills.

One client who made delicately fine gun actions modelled miniature working steam trains as a hobby. They were engineered down to the finest detail and won exhibitions and had been exhibited in various science museums. At one time he modelled a pair of live duelling pistols, which were used in a film. Typical of most brilliant craftsmen, he refused to do rubbish jobs and this resulted in him having little work until he built himself a reputation and for this reason when I prepared his first set of accounts the results were dismal to say the least and I asked him how he managed to live on his drawings and run a sports car. He 4explained to me his girlfriend’s father provided the sports car and he lived with his girlfriend who supported him. I verified this with his girlfriend who also confirmed the car belonged to her father who had a garage.


I sent the accounts to the Revenue and as I expected they raised the same questions and called my client for a personal interview, although I had tried to pre-empt the situation with a written explanation. Before the meeting, my client asked if there was anything he should say at or take to the meeting. I told him to tell the Inspector what he had told me and to take the duelling pistols, as evidence of what I had told the Inspector. These were kept in a beautiful wooden case made by my pattern-maker clients. The Inspector, a small, thin, white faced individual seemed quite young and inexperienced as he kept looking at his notes to decide what question to ask next. My client patiently and calmly answered the Inspector’s questions but after a while I sensed some tension growing between them and in the end the Inspector asked somewhat aggressively, “What do you do when you’re not working?”. Quick as a flash, my client flipped open the box lid, grabbed the duelling pistols, pointed them at the Inspector, cocked the flints and said firmly, “This is what I do”. The startled Inspector, just about fell off his chair and with a red face promptly terminated the interview. There was no case for the client to answer. This was my first encounter with the Revenue but I did have other interesting encounters. One farmer, irritated by questions which were getting too close for comfort said “What do you do with the vermin in these offices? We shoot them on the farm.” The inference was embarrassingly obvious and I felt obliged to tell the client, comments of that nature were not necessary, helpful to his case or called for. The client apologised and the Inspector continued with his line of questioning, which in the end achieved nothing.

Final story, the roads in the gun quarters of Birmingham had a terrible camber on them so when parked on the left-side of the road going in the right direction opening the driver’s door at almost 40 degrees was a real struggle. I had just taken delivery of my new mini and gone to pick up the records of a client who had an engraving business. As I opened the passenger door to give the client a lift home, because of the road camber, it fell off and I ended up driving him home to Handsworth with the passenger door on the back seat. The next day I went back to the showroom where I bought the car and the young salesman said “What do you expect for £500.” I was so livid that he telephoned the motor company in Birmingham and they agreed for me to take it in the next day. I explained I was getting married at the week-end and I needed it back urgently. As they took the car off for repair I was invited for a VIP inspection of the factory followed by lunch, before being taken to my car. It was immaculate and I noticed a radio aerial. Looking inside I saw an expensive radio had been fitted. I said “I didn’t ask for a radio to be fitted”. The manager replied “Take it as a wedding present, with our compliments and apologises.”

Well so much for those minor diversions, which I hope haven’t bored you, they’re just things I remember along the way, suffice to say my starting salary at Wednesbury, supplemented by my practice income, provided a comfortable standard of living.


At Wednesbury College of Commerce, I was lecturing to pre-examination students taking examinations for the ICAEW, Institute of Certified Accountants now called Chartered Certified (ICCA) and Institute of Cost & Works Accountants now called Chartered Management Accountants (ICMA). The principal of the college, however, having recruited me as a lecturer in taxation now extended it to include everything in the examination syllabuses’, except ‘auditing’ and ‘executorship law and accounts’.

Then in 1965, the governors of the college decided the salaries of my two colleagues and myself were not justified in relation to the hours we were working and we were told to undertake research work. The principal lecturer on the courses suggested I brought my private work into the College and if anybody asked me what I was doing I should simply say “My research”. However, I wasn’t keen on that idea and rang the technical director of the ICAEW for suggestions and without hesitation he said “Research into the problems facing accountants in public practice to provide a more management orientated accountancy service to small firms”. Well there was certainly no shortage of small firms and practising accountants to interview in Wednesbury and its environs and their responses were direct and positive on both sides. To list but a few from the business side, I’ve excluded the odd F****expletive to avoid offence.

“What are ****management accounts?”

“My ****accountant charges enough for Annual Accounts”

“I hate ****book-keeping; I leave all that stuff to the missus”

“I don’t understand my**** accounts now. I don’t want anymore”

“What possible use are ****management accounts to my business?”

“Will I have to employ a qualified book-keeper to keep the books?”

“How much would it cost if I wanted it, which I don’t I pay my accountant too **** much already?”

“Accountants are a necessary evil. I don’t want to get more involved with them.”

“Is this just another way to get more money out of me?”

I could go on but the comments became very repetitive and eventually I analysed them down to small businesses strongly resent the time and effort they have to put into book-keeping, a job which fetches them no return at all, but they acknowledged records had to be kept if only for tax purposes. They could see no benefit in Annual Accounts, which most did not understand and in any case they were too historic to be of use for business, finance or tax planning purposes. Keeping business records was a rainy day job

left to the eleventh hour, usually actioned by an urgent call from their accountant, a letter from HMRC containing an estimated tax assessment or summons to attend a Commissioners Meeting. Also, some businesses, it must be said, hoped their haphazard records sent at the eleventh hour would avoid detection of their indiscretions.

From the practitioners’ viewpoint came confirmatory comments, direct remarks and advice.

“It’s hard enough to get their records in now, let alone on a regular basis.”

“No chance. You should see the state of small firm records. We’re in arrears with annual accounts.”

“To produce management accounts would cost too much and they wouldn’t want them anyway.”

“Small businesses don’t understand their Annual Accounts so they would be a waste of money”

“What use would management accounts be to a small business? They live close enough to the action”

“We regard incomplete records as fodder for junior clerks to learn on.”

“Our firm is not geared to provide management accounting services because there is no demand.”

“You’ve got to be joking. Management accounting for small firms! Come back when you’re sober”

“Why don’t you research something more useful and practical.”

“Your living in a dream world. Nobody wants them, nobody will pay for them and it’ll never happen.

Stop wasting your time and taxpayers’ money.”

To summarise, accountancy practices were struggling to produce annual accounts for tax purposes from the poorly maintained often incomplete records kept by small firms. Therefore, the thought of providing a more management orientated accountancy service was completely out of the question. Accountants experienced enough problems employing and training their own staff without providing instructions to clients on keeping business records. At Wednesbury we ran a one-month book-keeping and accounts course for accountant’s staff. The most accountants did to help clients was hand them a cash book, usually a Simplex or Grove Cash Analysis Book and draw their attention to an example printed by the publishers on how to complete the pages. Also, some accountants, it must be said, preferred to surround themselves with mystery and keep clients’ in the dark to avoid challenges to their fees.


My research had effectively ended at this point because it was only suggested I research the problems preventing accountants providing a more management orientated accountancy service to small firms, I was not required to find a solution. In 1967, the increase and make up of my client base made it impossible to remain in education and I merged my firm with another well-established practice looking for a young partner with up to date knowledge of the new tax legislation. However, this was not the only reason why they were both very keen to get the partnership agreement signed and settled without delay. Arriving at the office one morning about a month later, my two partners very nervously and hesitantly, indeed almost

apologetically, handed me a letter which they said had arrived in the post that morning. The letter was advising the practice that the Revenue would be seeking confirmation of estimated assessments listed on the enclosed schedules, which of course related to their clients’ businesses, if the accounts were not submitted on or before the Commissioners Meeting. As I looked down the lists I noted that accounts in most cases had not been submitted for two or three years and there was no chance these could be submitted before or even by the due date. It was also obvious, seeing the state the practice was in, my two partners had no idea what to do and they were clearly in a state of panic. Confirmation of the assessments would result in a major loss of clients not to mention potential claims for damages against the practice.

I noticed the senior partner preferred socialising with clients, joining clubs and associations and getting involved with any activity that might bring him into contact with prospective clients. After all that is how he had a built his practice. He was what I called a “Gin and Tonic” practitioner. He did not concern himself with the nitty gritty work or how it was being done. It was delegated to and the responsibility of his brother-in-law partner, to look after the day to day running of the practice. However, he had no control over the staff who took time off when they wanted and worked at a pace to suit themselves, which was little faster than a snail, because as I discovered most of them didn’t have a clue what they were doing and it was a case of the blind, leading the blind. I now had two choices, dissolve the partnership and take my clients with me OR see if I could sort the practice out. By this time, I had become completely absorbed with the research project and so I decided to stay for two reasons. Firstly, because here was a live case for me to work on a problem that was plaguing the profession and secondly I considered it would be very unprofessional to take advantage of confidential information I had received from my partners in good faith even though they withheld the firm’s position when the partnership proposals were being discussed. I did realise, as I expect they did, if I left and set up a competing practise at vacant premises opposite, many of their clients would come to me, which no doubt is why they looked nervous and hesitant when they first handed over the Revenue letter and attached schedules. It was clear action was now urgently needed and I asked my partners for a freehand and their support and backing for any decisions I made and they agreed without further comment.

My first step was to get the staff together and inform them of the firm’s position and how it would affect their livelihood if we failed to adopt new working procedures which I was about to lay down. I had my office desk moved into the general office where the staff prepared the accounts, giving me direct supervision over their work and to deal with problems directly when they were preparing accounts not after they had been prepared with glaring errors that had to be corrected, increasing the time spent to produce accurate accounts. It would no longer be a case of the blind leading the blind. The next step was to establish exactly the current situation with regard to client work in progress. I needed to know which clients on the scheduled lists had sent their records in, whether they had been checked for completeness and clients chased up where necessary and where clients’ records were being processed how near were they to draft accounts? Also, who was on the list whose records had not been received and which clients were most responsive to

sending in records and so on. It was the RAF syndrome all over again with proper records set up to check state of work in progress. I agreed with my partners and a senior tax clerk to give priority to all tax returns and computations when they were not preparing accounts.


When the date of the Commissioner’s Meeting arrived, which was only a few weeks after we received the notice, we had barely touched the schedules and the Revenue were represented by the District Inspector and a Senior Inspector intent on getting as many confirmations as possible. I attended with one of my partners to defend our clients and the firm’s interests. I was asked directly, why so many accounts were still outstanding. I explained I had only recently become a partner and previously I had been a lecturer at



Wednesbury College of Commerce, where I had been carrying out research into the problems, facing the accountancy profession to get accounts out on time and was looking for a solution which is one reason why I joined the firm. The Inspectors were taken aback by this unexpected response as were the General Commissioners, who called for an adjournment and duly retired for some time to consider their reply. On their return I was asked if we could get half the outstanding cases in within six months and the remainder

in the following six months, without accruing a fresh list of accounts arrears. I advised there was a very good chance we could comply with their request and upon this basis a further extension was granted to the annoyance of the Revenue. I asked my partner to point out again the clients on the list who were most competent at maintaining and co-operative at sending in their records and asked for a six-month adjournment for them. The remainder were adjourned for another six months giving them as well as ourselves a twelve months stay of execution. Back at the office my partners and I agreed the staff would

carry on with the present policy for processing clients’ records because it was working, meanwhile I would try and find a solution. After the meeting the District Inspector confirmed there was a real problem with accountants getting clients’ accounts into the Revenue and ours was not the only practice with big arrears.


The crux of the problem was not with staff who could be trained, but with the wide variety of ways clients’ kept or more likely, didn’t keep their records. Every client had their own ideas on how they thought they should keep their records, which varied from a carrier bag full of disorganised documents to neatly written and presented books. Each client considered that the records required for their particular business would be different from other businesses, even in the same line of business. How could the records kept by a plumber be the same as a chemist shop, quarrying business, amusement arcade, travel agents’ or engineering works? Indeed, how could any of their records be similar, they all had to be different to reflect their different businesses. It was ridiculous to think they could have any similarity and the accountancy profession perpetuated this belief by producing accounts in as many different varieties and formats as they believed necessary to build up the mystic and perceived complexity of accounts preparation. In fact, so ingrained over the years had the process become that accountants even believed it themselves. After all, everybody knew it takes five years to qualify as an accountant. There was absolutely no uniformity whatsoever, every client’s records and accounts were unique to their business, the only commonality between them was they were all in English.

Against this historic background lay the problems facing the profession to provide a more management orientated accountancy service to small firms and the problem now was to find a solution which was, simple, instant, universal, requiring no book-keeping knowledge or skills of the client and demanding their absolute minimum co-operation whilst at the same time, the records had to be quick and simple to process by junior staff when received in the accountant’s office. Finally, the records needed to be received on a regular basis to enable the work to be processed throughout the year so popular March, June, September and December year ends, which created bottlenecks in the accountant’s office could be avoided. Also, regular processing would enable queries to be settled whilst transactions were fresh in the client’s mind. I thought, if I could find a way to achieve this the possibilities for the provision of a viable management orientated accountancy service for small firms would be a step nearer. However, I had a year, split into to two six monthly sessions, to come up with a practical working solution to get clients’ accounts in on time to satisfy the Revenue and the firm already had a backlog as long as Livery Street. (a very long street in Birmingham)


Sitting at my desk in the general office watching the staff processing clients’ records and pondering how to accelerate the process I knew the most reliable documents were bank statements, which were analysed by the clerk looking at cheque counterfoils and paying in books. The name or detail on the cheque counterfoil or paying in slip, if there was one and it was readable, gave them an indication of what the payment or receipt might be for and they would ferret through the invoices to see if they could find an invoice or reference to the name to give them a clue. If no invoice or clue could be found in the submitted documents, ask another member of staff what, for example, a payment to Joe Smith might be for and if nobody knew, consult a trade telephone directory to see if the name was listed in there. Telephoning the client was always the last resort for fear of upsetting the client or giving an impression of incompetence if the client asked



awkward questions. However, if someone knew the name and nature of the payee’s business the conversation between the Processor doing the job and a Clerk who’d done it previously might go something like this:

Processor “Can you help me with this job please. I’ve a payment I don’t know what it’s for?”

Clerk “Whose job are you doing?”

Processor “Grimes Reaper”

Clerk “Who is the payment to and how much is it for?”

Processor “Joe Smith and it’s for sixty pounds twenty-three pence”.

Clerk “That’s probably for brassware”.

Processor “Brassware for what?”

Clerk “It’ll probably be for coffins. Grimes Reaper’s a coffin maker and Joe Smith sells hardware”

Processor “What do I put that under?”.

Clerk “Stick it under Purchases”.

Processor “What do you mean?”

Clerk “Enter the amount under the purchases column on the analysis sheet. But you’d better contact Mr Reaper, to make sure.”

When the Processor manages to get hold of Mr Reaper, a conversation between Mr Reaper and the Processor might be as follows:

Mr Reaper “Hello, Grimes Reaper here. How can I help you?”

Processor “Hello Mr Reaper. It’s Tick, Vouch and Check here, the Accountants. I wonder if you can help me.

You paid a cheque to Joe Smith on 16th April 1966 for £60.23p. Can you tell me what it was for please?”

Mr Reaper “You expect me to remember that now. Haven’t you got the invoice amongst my papers?”

Processor “I’ve had a look Mr Reaper but I’m afraid I can’t find an invoice for Joe Smith”

Mr Reaper “OK I’ll have a further look in case they’re at home ‘cos that’s where the wife does the books”

Processor “When can you let me know, because the accounts have to be in by next week?”

Mr Reaper “In where?”

Processor “The Inland Revenue need them to support an appeal against an estimated tax assessment”

Mr Reaper “OK what was the date and amount again please?”

Processor “The date was 16th April 1966 and the amount was sixty-pounds twenty-three pence”

Mr Reaper “And who did you say I paid it to?”

Processor “Joe Smith”

Mr Reaper” Joe Smith sells hardware and small tools so for that amount it was probably a tool.”

Processor “Would that be a new additional tool or replacing an old one?”

Mr Reaper “I don’t think it would be an additional tool. Is there anything else you need?”

Processor “No I don’t think so thank you. Good-bye”

Mr Reaper “Good-bye”

Back in the office

Clerk “How did you get on?”

Processor “Mr Reaper said it was for a wood-working tool. What do I do now?”

Clerk “Was the tool new or a replacement. Not that it matters”

Processor “He said it was a replacement.”

Clerk “OK. Cross the amount out of the Purchases column on your analysis sheet and enter it under the

Repairs Column.”

Processor “Why did you say it didn’t matter whether the tool was new or a replacement?”

Clerk “Because we don’t capitalise small amounts. Now, can you get the job finished please!”



Once the information on the Bank Statement had been analysed and transferred into appropriate columns on the Analysis Sheet and all the columns on the Analysis Sheet had been added up and agreed and the totals transferred onto a Bank Summary and the closing balance on the Bank Summary agreed with the closing balance on the Bank Statement, after taking into account any unpresented cheques and late payments to bank the Bank processing work was complete. Did you get all that?

It only remained now to prepare a Cash Account by going through whatever cash records were available and then, contact the client to advise them there was a cash difference of hundreds or even thousands of pounds and ask them if they had an explanation. If no satisfactory explanation was available, they were told how it would be treated in the accounts; usually sales or drawings. Cash differences were often the trigger for the Revenue to start a full-scale enquiry into a business’s affairs and a favourite question of the Revenue was “Did you find a cash difference when preparing the accounts. If so how was it treated in the accounts?” Finally, outstanding Debtors, Creditors and Stock balances at the year-end had to be established. It was not unusual for a small job to take between 30 and 40 hours or even more.

Things have changed a lot since the scenario of the 1960’s which I refer to because since then we have had the introduction of personal computers, accounting software programmes, Value Added Tax and Self-assessment but nevertheless, reference to that scenario is still relevant to the development and application of the CARL System in the 21st Century, so I will continue down this path. Besides your probably curious to know how the General Commissioners Meetings went, if nothing else.


The office had a Sweda 1 to 7 Cash Analysis machine and looking at the Analysis Sheets I noted that the column headed Purchases in almost all cases had most entries whilst others varied in length, depending on the nature of the client’s business. One technique for training staff was to tell them to look at last year’s working papers for that client and follow what was done last time. Therefore, I told an experienced member of staff to look at last year’s working papers and establish from the Analysis Sheet, which seven columns had the greatest number of entries falling under the same heading and list them as follows:


  3. WAGES

For the next client the analysis could be quite different, for example 1. Purchases 2. Wages 3. Drawings 4. Telephone 5. Petty Cash 6. Sales and 7 Sundries because different businesses had different demands and patterns of behaviour.

When the clerk came to process the Bank Statement for Grimes Reaper for the seven items on the list the clerk would not transfer the amount onto the Analysis Sheet where it had to be entered twice, once in the total column and then in an analysis column, but to key the number and amount into the machine. When they had finished processing the Bank Statement, they could then get the totals of the seven longest columns to enter directly onto the Bank Summary and just add up the shorter remaining columns. Apart from having only one “Sweda” cash machine for the experiment, I was aware the clerk could press the wrong analysis key or enter the wrong amount, so the benefit was only the automatic addition of seven long analysis columns and if an error had occurred a neatly printed list to check. The clerks in the office each had a turn at using the machine.



I put ten test cases through using different clerks who I did not directly supervise but audited their outcome. The clerks doing the work had varying levels of experience and none were anti the use of the machine for they appreciated having fewer additions to do and it was quicker entering the amount in the machine than onto an Analysis Sheet where the amount had to added twice, once in the total column and then in the analysis column. There was no doubt the Sweda involved less work which made it marginally easier and quicker but was it producing accurate results? The answer was no. Only using a single seven number code for analysis which varied depending on the client’s business, for reasons I didn’t know then but learned later, numeric codes are prone to error, which is probably why when checking shops records using itemiser tills errors arose that were not necessarily deliberate. The experiment was abandoned but worthwhile because I had learned numeric coding structures have limitations where accuracy is important. However, experimenting with faster ways to process clients’ records when they came into the office was not tackling

the problem. What was needed was a way to train the clients’ not the staff. Also, clients hopefully stay with you a long time whilst staff tend to come and go needing constant training.


When I was attending the BSM I was told that if I went to study full-time I would have to take a course to become a violin teacher and performer. I looked into what that entailed and discovered one of the subjects was applied psychology. This fascinated me so I bought the recommended course book “Applied Psychology in Education”. I now wondered if it might trigger some thinking or give me inspiration to overcome my client problem. I had to somehow catch the client at a critical point when they had no option but to create a written record which was important to them because it was going to affect their business and so they would concentrate and take care when filling it in. The only document I could think of was a cheque. They were parting with money and had to take care to enter the correct date, fill in the correct details and ensure the words and figures of the amount they were paying agreed; otherwise the bank would not accept it.


The banks in the 1960’s were returning all paid cheques with bank statements to their customers in compliance with the Cheques Act 1957 which stated an unendorsed paid cheque met by the banker on whom it was drawn was evidence of receipt by the Payee of the sum payable on the cheque. It was an official legal document. All that remained was to see if the banks would print a duplicate bank statement

and send it direct to my firm together with the returned paid cheques when they sent the monthly bank statement to their customer and we were getting somewhere. A preliminary chat with the local bank managers raised no objections to my requests, provided they had customer approval in writing which didn’t turn out to be a problem, as clients’ signed my pre-printed form of approval.


However, Mr Reaper, the fictitious person I introduced earlier, could be buying anything from Joe Smith, from between a few tacks to an expensive machine. Also, he wasn’t the only seller of a multiple variety of

supplies. How could we know what the cheque was for? The simple answer had to be a code written on the cheque to which I knew the banks would not object. But what code as numeric codes were out of the question? It would definitely have to be an alphabetical code, if that were possible, because each code letter would have to be distinctly different. The only connection I could think of, involving coding structures, were computers, about which I knew nothing only stories of Bletchley Hall’s use of computers and codes during the war. Accordingly, I contacted IBM in Birmingham and they invited me to attend a course as they were looking to train and recruit computer programmers.

I learned all about 0’s and 1’s and other things and one day after a lesson on data bases I thought a computer could probably be programmed to think, but I wasn’t quite sure how at the time. However, that course has stood me in good stead and benefited me ever since. To this day I am very pleased I went, as it set me off on the right foot to develop well-structured computer compatible coding systems. It only remained for me to determine whether it was possible to create an alphabetical accountancy coding structure that was simple to understand and remember. Was it possible to create an alpha-mnemonic, example A = Apple, coding structure to meet the needs of all kinds of business transactions undertaken by



all types of businesses both large and small? I was looking for a way to create a businessman’s shorthand or alphabet to analyse all kinds of business transactions.


By this time the second General Commissioners Meeting was upon us and I had to direct my attention to the state of play. Fortunately, the staff had followed my instructions and despite the partially failed experiment all the promised clients’ accounts were submitted either before the meeting or taken to the meeting, which satisfied the General Commissioners. The second phase was dealing with troublesome clients from a record keeping and co-operation viewpoint. Also, the summer holiday period ran into the next phase and the staff, who had worked very hard were in need of a holiday so I and my partners agreed to pay them an appreciation bonus. I and my family also needed a holiday before seeing if an alpha-mnemonic accountancy coding system was possible.


Although as an articled clerk I had been offered two excellent business opportunities with people I liked and respected, I never wanted to work as an accountant in industry, I had always wanted to work in practise where work was very varied and I could apply my specialist skills and knowledge hopefully to the benefit of small firms without the expense of intruding on their business but I needed to find an unobtrusive economic way to have reliable up to date accounts regularly available to me for when business, finance or tax planning advice was required and to detect if I ought to contact them when I could see they were having problems.

It was whilst sitting on the sands watching my children play that I started thinking about small firms and their accounts. What was the purpose in life of producing accounts which once the tax liability was settled were effectively waste paper? I also thought of all the sets of accounts I had seen and realised how badly structured and meaningless they were for assessing the performance of a business. Also, they were so

historic that it was risky and indeed could be dangerous to give advice on them without knowing what had happened in the intervening period. I began to think that computers would be a force to reckoned with in the future and standard accounting procedures would need to be laid down for all small firms if computer

applications were to be successful. When compliance with legislation was required, for example with the Companies Acts or Revenue legislation, the standard accounting procedures would have to be flexible enough to meet and accommodate them.

Then for no positive reason, I started to think about the similarity between human life and business life. Human life begins with a baby being born and a business life begins with money being invested. Parents purchase physical things the baby will require such as cots, prams, high chairs and baby seats to make it operational or functional and regular food and drink for its continuing survival. Meanwhile, a business purchases or acquires fixed assets such as cars, telephones, premises and machinery so it can function and operate and regular trading transactions to generate cash flow so it can survive.

In the early days the baby’s diet is watched very carefully and it has regular health checks to see it is progressing well in the right direction. Similarly, in its early days’ business transactions are undertaken cautiously and their outcome monitored carefully by how much money is in the bank account and what’s outstanding. As the baby grows to childhood, additional things have to be bought requiring further investment and its diet carefully controlled to ensure steady healthy growth. So it is with a business, as it grows it will require further investment to purchase additional fixed assets to cope with increasing business generated by transactions, which should be carefully monitored to ensure steady profitable growth.

It was whilst eating an ice cream, bought you understand because the children wanted one, I realised I had forgotten about a very important, nay indeed vital point, namely pre-natal care. Is this the couple’s first child? Is the unborn child developing OK? Is mother taking proper care of herself and not doing things which could have an adverse effect on her unborn child? Is she attending pre-natal clinics regularly? Do the expectant parents want to know the sex of the unborn child so they can start planning before the birth?



The questions are endless. Very sadly in some cases the decision has to be made to terminate pregnancy in the interests of human life.

I thought back to the day when I was preparing business plans, an exercise before the business came into existence, for hopeful would be entrepreneurs. What type of business had they in mind? Did they intend to operate as a sole trader, partnership or limited company? What was their experience in the activities of their proposed business? What market research had they carried out? Was any legislation being proposed that would affect their business operations? What did they think were their unique selling points? As with pre-natal care the questions were many and varied and it was a time consuming and painstaking task. Finally, the crunch; preparation of a realistic budget, how much money was going to flow out before money started to flow in? How much money had the expectant entrepreneurs to invest and where was it coming from? How much would they need to borrow from the bank and for what estimated period? What security could they offer to the bank? Often, it was the budget which killed the project off. If business proposals were not financially viable they should abort. As with pre-natal care to ensure the baby has the best possible start in life so business plans are designed to ensure the best possible start in business life.

Going through the preliminary stages of life when the business is grown, led me on to another line of thought, assuming the proprietors of a business are knowledgeable competent persons in their particular line of business, apart from that what makes a business successful? Well it’s the outcome of decisions made in the ordinary course of business. Some will be major decisions changing the fortunes of the business but most are decisions made on a daily basis. It is the combination of these decisions made on a daily basis that have an impact on the profitability or otherwise of the business. Decisions translate into transactions, the life blood of the business and need to be monitored regularly. Too many bad decisions will eventually bankrupt a business, for rarely does bankruptcy occur overnight but more usually is a deterioration of profits

going undetected until they have eroded resources beyond repair.

Let me explain with an illustration what, in my opinion, the ingredients of a good decision are.

A guest at the Cushy Holiday Hotel was sitting in the hotel lounge when it went colder. This event triggered the need for a decision. Apart from complaining to the management, he could

  1. Turn the heating up
  2. Put additional clothing on
  3. Change his clothing
  4. Go back to bed
  5. Relocate to another place
  6. Put up with being a bit colder
  7. Go to another room

Seven choices, the decision he takes will depend upon his information at that time

  1. Is out of the question, because the room doesn’t have a heater control
  2. He hasn’t brought additional clothing with him
  3. It’s Summer he hasn’t brought a change of clothing to meet this situation
  4. He is not tired and he has only just got up.
  5. That’s out of the question at 9.0 am and he only arrived last night.
  6. Put up with the inconvenience, he can but doesn’t want to.
  7. There’s a possibility to go to the dining room, where breakfast is served between 8.30am until 11.0am and apart from the heat generated by the other diners there is a roaring open fire. He makes his decision, has a great breakfast so the outcome of the decision is a success.

However, let’s assume that the guest was not that cold and decided to read the morning papers and then go for his breakfast at 10.30 am. When he got to the dining room they refused to serve him, because last orders were taken at 10.15 am and the head chef was not prepared to make an exception. Therefore, not only did he go hungry affecting his health but also because the breakfast was included in the tariff he lost



money affecting his wealth, which proves the need for decisions to be based upon reliable up to date information. Had he been aware of all the facts he would have decided to go for his breakfast at 10.0am.

The key to success in business is to make the right decision at the right time. This requires sound judgement based upon reliable up to date information.”

A balanced diet of good food and drink for a human’s health and a balanced diet of good credit and spot transactions for a business’s wealth are their lifeblood and key to wellbeing and should be constantly monitored. There you have it, health and wealth, human life and business life are closely related and it’s no secret poor health can result in poor wealth and poor wealth can result in poor health.

With the holidays over and everybody back in the office the staff began in earnest to get down the list of outstanding accounts and I started looking into how accounts could be standardised and the structure of an alpha-mnemonic accountancy coding system.


As any System had to be alphabetical the first thing was to write down the alphabet and allocate the letters to analyse income and expenditure transactions. After a great deal of thought, I concluded certain types of expenditure had similar traits or connection and could be grouped together. Advertising, Printing and Stationery for example, were definitely connected. After all what is a business letter head. It involves all three forms of expenditure. But expenditure such as Advertising may require to be totally independent, as may Printing unrelated to advertising and blank Stationery used for numerous purposes. This does not present a problem simply add a secondary code letter as shown in the chart below. Other less obvious headings, of course, are Light, Heat & Power and Sundry Trade Expenses. The numbers in the Chart are the numeric code equivalent and are shown for interest purposes, they form no part of the Code Analysis Recording by Letters System.

Using this approach, even if the user didn’t know what particular heading an expense went under they could refer to sub-headings. The principal headings shown in red all covered very different types of expense and you remember the failed experiment with the Sweda Cash Register, we learned that most of the transactions fell under a few headings so the user would only be using one or two codes for most of the time as shown below.










To test the superiority of an alpha-mnemonic coding system over a numeric system look at the list carefully. Then, after a short break and doing something else, ask someone to test you on what the number is for the different items in the list. For example, what is the CODE number for Wages & Salaries? then What is the CODE letter for Wages & Salaries? Also test yourself on the information shown in the chart. This exercise is important because businesses only refer to the codes intermittently between doing other activities. The alphabetical coding structure, being alpha-mnemonic has a high level of memorability.

Now CARL (Code Analysis Recording by Letters) has access to every single letter in the alphabet for codes giving access to 26 single letters before a second further letter is needed, whilst numeric codes only have access to ten digits so numeric codes run into three digit codes and as a transaction can go both ways (i.e. an invoice can result in a credit note to reverse an entry) the numeric coding structure requires a fourth digit. With the CARL System when demonstrating CARL to a live audience I used to ask them to answer yes or no, by show of hands, if they knew all the prime CARL Codes for income and to put their hand up if their answer was YES and keep it down if it was NO. Inevitably hands remained down. At which point I’d say I have a very bright audience in today because the answer is NO. N for Normal Business Income and O for Other Income and the Code letter ‘O’ written before a payments code converts it into a receipt.

The practice I had joined some months ago was based in Shropshire and in addition to a whole variety

of businesses it had a particularly large farming clientele, which is probably why book-keeping if any had to be left to rainy days as they made hay whilst the sun shone. Overhead costs such as telephones, electricity, repairs etc. were common to all of them but their trading activities could be quite different and these were the head of the business where the brains were kept. No trading activities no business. Trading was the raison d’etre for the business and on large farms there could be more than one trading activity.

Farmers, out of choice or necessity used to diversify according to the seasons or market conditions. The diversification was not always to abandon the main activity of their farming business but to supplement it with another activity, a kind of insurance against unpredictable weather and volatile market conditions. So for example, a farmer’s main business activity may be milk production but at market one day somebody suggested “Why don’t you have a go at pig farming George at that stretch of land behind your barns ‘cos its doing nothing and pigs are fetching good money at market just now?”

George decides to give it a go and to keep track of this separate enterprise GL is extended by the code

GLP Livestock, Feed & Medicines – Pigs NLP Livestock & Livestock Produce – Pigs.

However, I leap ahead of myself because there was a lot more work to do in the development of the coding structure and the Commissioners Meeting was only a few months away with Christmas in between. Forget the management accounting aspects for the time being. As you will see they came in later in a very simple

form from the users point of view but involved highly sophisticated computer programming, which the user didn’t need to know just as you don’t need to know or see what’s going on under the bonnet to drive a car.

I had done away with the words Purchases and Sales because they were not transaction descriptive, every transaction is either a purchase or a sale, so I introduced the Goods for Resale & Direct Charges and Normal Business Income expressions to deal with the heart of business trading activities.



Now the second codes at this stage were introduced to show businesses what items of expenditure went under which red prime code headings and educate them gradually into the benefits of analysis for management purposes. However, whilst the sub-analysis of overhead codes was straightforward the sub-analysis of Trade Codes was another matter. The Trade Codes for a Farmer would hardly suit the owner of an Hotel or a Petrol Filling Station and similarly the Trade Codes of an Hotel would hardly suit a Petrol Filling Station. Yes, okay if you’re just knocking out accounts for tax purposes the words purchases and sales for the main trading activities and listing separately each overhead expense produced a crude set of accounts. Management accounts, however, are a totally different kettle of fish, they’re alive to be used by management to navigate their business to success through both calm and stormy waters, whatever the ceaseless oceans and tides of business throw at them. Accordingly, my question was how many basic business categories are there and I established there were ten to which generic Trade Codes could be applied:

B. Building & Construction Industry C. Clubs & Associations

F. Farming, Fishing & Market Gardening G. Garage & Motor Trades

H. Hotel & Catering Industry M. Manufacturing & Production

P. Professions & Vocations R. Retailers & Wholesalers

Q. Quarrying & Mining T. Transport, Haulage & Storage

Although CARL provides standard Trade Codes, I recognised the importance of not straight jacketing businesses and there was a need to allow them to be more specific with their business description and to create Trade Codes, which met their specific business needs for management purposes. I have never found a business to move away from the CARL Trade Codes but the facility exists. Also, I found very few clients to

use the secondary codes, most were satisfied to use the single red code letter to explain the nature of a transaction, however, the facility does exist should the need arise. The major key, which gives the CARL System copyright protection, is that the prime CARL Codes cannot be swapped about. Thus enabling standardisation, structure and uniformity. By allowing flexibility with Trade Codes GF could become Fish Stock and Food and NF Fish and Produce, whatever the business selected to analyse their principal business trading activities.


However, it’s all very well developing something that in theory should work in practise, the proof of the pudding is in the eating. Could and would clients understand the System and more importantly be prepared to operate it. I got several farmers together in my office and after explaining what the meeting was about I gave them a properly printed Code card made up for the farming industry. I then asked them if they would take it home and Code up the returned cheques they kept with their bank statements and bring them into the office for processing. If they had any problems I asked them to contact me direct and if they were uncertain about how to Code a particular transaction to write the details on the back of the cheque. On market day a week later, all the farmers brought the whole of their records in, none of the farmers contacted me, none of them wrote explanations on the back of their cheques, all of the cheques were coded in the top right hand corner and when I checked them all of the cheques had been coded correctly for a whole year. I then gave the records to various members of staff and instructed them to sort them by the prime codes on to pre-printed sorting boards, then machine list each batch, then refer to the bank statements for none cheque items such as standing orders, bank charges and direct debits. The machine lists totals were then transferred onto a pre-printed CARL Bank Summary and Agreement.

The whole exercise worked like a dream, the bank accounts were being processed and agreed in a fraction of the time and the staff really enjoyed doing the work. No more time consuming messy hold ups waiting to find out what a particular transaction was for or waiting for missing documents. I went down to the market later in the day, to where the farmers congregated to discuss the day’s events to thank my clients for their co-operation. Much to my surprise and delight they were talking to other farmers about coding their cheques. The whole exercise had proved a huge success from client to accountant and I felt reasonably confident I would have little difficulty introducing CARL to other businesses and indeed that proved to be

the case.




Unfortunately, with the holidays and time it had taken to progress the solution this far and only a few clients aware of CARL we were nowhere near meeting the target for the third Commissioners Meeting and I was very thankful for the very severe outbreak of foot and mouth disease in Shropshire which restricted movement not only of animals but also people. It provided the ideal excuse for why we had been unable to meet our target, which was accepted by the Commissioners. However, I was asked if I had found a solution and I was able to honestly say I believed I had. After this it was full steam ahead introducing clients to the CARL System to catch up with the backlog and paving the way to avoid one in the future. All that remained to be done was to work out how clients could avoid cash differences, one of the Revenues tin-openers for starting an inquiry into a business’s affairs.


All businesses deal in cash to some extent but the most prolific were Retailers, so I started to think to myself when money is received there are only two things they can do with it. Spend it or Bank it, otherwise they still had it as Cash in Hand. A business would spend cash on a variety of things including Drawings, their own personal living expenses and it was not uncommon for proprietors to guess estimate cash expenses and drawings. With no idea how a Cash Account was constructed cash differences arose frequently. I therefore set about designing a Cash Summary and Agreement Form to cater for the situation to protect them against Revenue inquiries.

On the Cash Summary and Agreement, shown opposite, a client entered Goods for Resale in Column 1, the Total of which was carried forward to Column 2, in which were entered various Overhead Costs and Personal Drawings all these items added together amounted to how much they had spent. Next, in Column 2, they had to enter any Cash in Hand, which was usually the balance they left for change in the till, they then entered the amounts they had Paid to Bank to arrive at an overall Total from which was deducted any cash withdrawn from the bank and Cash in Hand brought forward from the previous week. The Total at the foot of Column 2 was then the Total of all money (cash and cheques) received during that week and it could only come from one of two sources. Normal Business Income, from trading activities OR Other Income, from non-trading activities. In Column 3 the business entered the source(s) from where the income had come.

When I attended a Revenue interview with a client the Revenue might ask to see vouchers to support an expense shown on the Cash Sheet. Unable to produce vouchers to substantiate the amount the Revenue would require a lesser figure to be entered. I pointed out that whatever substitute figure the Revenue wanted entered this would affect the Total of Column 2 and create a Cash difference. Sales would need

reducing by the same amount which made absolutely no difference to the Net Profit for tax purposes. On the CARL System the only figure worth looking at in a Revenue inquiry was the adequacy of Drawings. As my aunt used to say “It’s no good riding around in a Rolls Royce and declaring a Pushbike income.” Also, the CARL Cash Sheet reminded me of my father’s comment, when I acquired my first clients, “Just remember you’re not the guardian of your clients’ morals”. The design of the Cash Sheet, which is protected by copyright, became even more relevant when VAT was introduced.

On a few occasions I did meet resistance over keeping the CARL Cash Sheet but after I explained and demonstrated its benefits overall clients were happy to go along with my advice and recommendations and what is more because Column 2 and 3 had to agree they rarely made errors. There was only one client, a bed salesman, who was particularly difficult so I told him “If you know better than I how to look after your tax affairs why are you engaging my services”. He shut up but refused to keep the Cash Book despite my frequent advice. Some years later the Revenue called him for interview and he lost his case because of his inadequate records, which cost him dearly in extra tax not to mention my fees. This was the first and only inquiry I ever lost and he blamed me, so I was certainly pleased when I lost him.



Over the next few months I had the CARL System installed, operational and running smoothly with clients and staff. The profits of the practice increased to the point where my partners complained about paying Surtax. Everything, as they say, in the garden was rosy and I decided to write a technical paper about my research and the CARL System for the benefit of other practitioners. The paper was published under the heading “A Complete Approach to Incomplete Records”. However, before publishing I went to see a leading Patent and Copyright agents in lower Newhall Street in Birmingham where I met a charming elderly gentleman who kept bees and he always gave me a pot of honey. He explained the difference between patents and copyrights in detail. Patents you held to your chest, until the patent licence had been granted copyright on the other hand you broadcast to establish when the written work was published. He then went on comparing the difference between the two. How patents and copyright had different life spans and how each could be broken or superseded. He told me my work was copyright and after some days he

contacted me to say he considered it watertight. However, before publishing I obtained professional opinion on the CARL Coding Structure from the British Medical Research Council who were researching a new telephone dialling system. They sent me their research papers which showed beyond doubt alphabetical codes to be far superior to numeric codes and they told me if they could have had Birmingham Central 1234 as BIR CEN 1234, they would have done so, but what do you do for Birkenhead and all the other places beginning with BIR? Content with these findings I proceeded to publication.


I published “A Complete Approach to Incomplete Records” in November 1969 and sent a copy to the technical director of the ICAEW who immediately ordered a further twelve copies for members of a working party, which had been set up specially to study its contents. Their response after due deliberation was, on the basis of the information and evidence provided it would clearly be of benefit to the profession but to

be adopted by practising accountants and their clients it needed producing in package deal form. This made sense to me so I set about re-designing and extending the stationery so the clients and accountants stationery was co-related. No figures were recopied. A summarizer bar and board enabled the CARL Cash Sheets when received to be accurately aligned to produce an analysis styled sheet, which the clerk simply added across to produce a Total Cash Summary and Agreement for the month or quarter. I designed cheque sorting trays by prime code and a front secondary sorting facility for secondary codes. In the 1960’s and 70’s computers were not even on the horizon and I designed a pre-printed Audit Schedule extended trial balance or spreadsheet to link all the other forms together, including opening and closing Debtors, Creditors and Stock Schedules to produce accounts. The package deal was therefore a pre-printed CARL CASH BOOK, containing 54 duplicate Cash Summary and Agreement Sheets, 4 duplicate Debtor, Creditors and Stock Schedules, 4 duplicate Accounts Audit Information Sheets 20 CARL Code Cards and 20 sheets of CARL Trade Codes, and a pack of accountant’s office stationery sufficient to handle 10 clients for a year.


The next task was to find a precision business systems printer and I had no hesitation in choosing Kalamazoo Business Systems, whose quality products and services I had known for a long time. I contacted them and was introduced to a Chartered Accountant who had developed the famous three in one ledger system. I showed him the Summarizer Bars and Board I had designed. With a wry smile he showed me one Kalamazoo had produced 6 months before. At that point the meeting ended and I left to await a quotation.

Waiting for Kalamazoo to get back to me I contacted a plastics manufacturer in Sutton Coldfield, to produce a special plastic binder to protect the cash book and special cheque book holders for keeping cheque books and CARL Code cards together, so the Codes were clearly visible and could be referenced immediately when the client was writing a cheque. It was three months before I heard from Kalamazoo and when I asked why it had taken so long he said “Our research and development department have been trying to break your copyrights.” I naturally asked why and he said “We don’t do small runs and the least we will print is 2,000 Systems. Now if we can break your codes so can other business systems printers and we wouldn’t be prepared to print that volume if your copyrights could be broken”. He then went on to give me a quote which wasn’t cheap and the look on my face must have said it all because he said “However, we will give you 12 months’ credit, with payments being made as the Systems are sold”. The deal was done. Not only were Kalamazoo to print the stationery but they were prepared within the price quoted to steam wrap it,



store it in a temperature controlled environment and then to delivery wrap and despatch the orders when received. Brilliant, once I had approved their proofs and the presses were rolling I didn’t need to get involved further on the production and despatch side, everything would be looked after by Kalamazoo. The finished product was very high quality and impressive by any standards as were the plastic cheque book holders and Cash Book binders.


In 1971 Chartered Accountants could not advertise their services and circulation of “A Complete Approach to Incomplete Records” was restricted to the accountancy profession and associated accountancy newspapers. With over 2,000 Systems to sell over the next 12 months I sent a copy of the book to Accountancy Age who asked if I was willing to be interviewed in my offices. I talked to their journalist about the System and arranged a demonstration of clerks processing the System. The following week a half-page article appeared headed “Here’s method for your practice” and at the end giving my contact details. I was contacted by 12 firms of accountants scattered all over the country and my first call was at Tenby in Wales. I designed and produced a flip over chart to compare CARL with the records and methods accountants were applying to produce annual accounts.

After attending the twelve enquiring firms of accountants, they all bought either 10 or 20 Systems and in total I received orders for 120 Systems. I had already told the Kalamazoo representative I had received 12 enquiries and he could hardly believe it when I told him they had all bought the System on the spot. I had never sold anything before and so I couldn’t understand, with such a good and well proven product and no competition, he should be surprised. He then told me the hit rate for a Kalamazoo trained rep. and it was a fraction of what I’d achieved.


Back at the office my partners were not happy about me selling the CARL System to other firms of accountants despite profits from stationery sales coming into the firm. I pointed out we can’t act for every business in the country and if the CARL System can benefit other accountants and their clients and would generate profit for ourselves what was the problem. They didn’t want me selling it to our competitors. Quite understandable I thought so I agreed not to sell it to local accountants up to 60 miles’ radius. Still they were not satisfied and so a few days later, the practise having no more problems and substantially improved profits they dissolved the partnership and told staff to tell clients I had gone back to Birmingham. A sizeable outlet to sell part of the 2,000 Systems held by Kalamazoo had gone. However, my own clients and a number of their clients contacted me and I told them I had acquired office premises around the corner and was remaining in practise with a new partner an ex-student who I had coached through his examinations.

The practise income although adequate needed to be increased. Fortunately, at that time Lloyds Bank had appointed a new bank manager with instructions to expand the branch. I went to meet him and explained about the CARL System, how it enabled accounts to be prepared economically at any time they were required. He arranged to visit my offices and I explained and demonstrated the CARL System with live client’s records. He was suitably impressed and we got talking about the problems of lending money to new businesses, my wish to take on viable clients and his wish to lend money to the right customers. We came to an agreement. A new business seeking to borrow money would be sent to me to draw up a professional business plan, which I would prepare free of charge. If the business plan was viable the prospective client and I would go to Lloyds Bank and discuss it with the manager and if the outcome of the meeting was OK

which usually was the case, the bank would lend the money on condition I was appointed to act and to report every three months on the progress of the business. This procedure was beneficial to all concerned because any problems were detected early enough to take corrective action thus businesses became good customers for the bank and good clients for my firm. Lloyds Bank opened another branch in the town and my practise started to rapidly expand giving me the funds to pay Kalamazoo within the agreed time-scale.


My partner and I decided to circularise London practitioners and invite them to a CARL presentation at the Abercombie Rooms in Liverpool Street which we hired for three days. The only attendee, Chartered Accountant Ernest Marples MP, the Transport Secretary, bought 20 Systems, I think out of sympathy because we never heard from him again. As a member of the Birmingham Press Club I telephoned the London Evening Standard and a reporter came to see the presentation and a half page article “Reaction to CARL needs figuring” appeared in the Evening Standard. The next morning the hotel were inundated with



telephone calls from businesses wanting to speak to us and in the end they had to tell callers we had left the hotel. On another occasion we were holding a presentation in an hotel in Croydon and in the same hotel a meeting of small businesses was being held and a number ended in our exhibition for accountants.

After this my partner decided practise life was not for him and after the London disaster I found myself doing most of the work so after discussion I dissolved the partnership and he went to open a wine business.

By now marketing CARL was becoming a full-time exercise and I had little time to spend time on practise work. Once again, a critical decision had to be made, so I sold my practise to concentrate full-time on marketing the CARL System. The cost of the System to the accountant was £12 per client, which if the accountant passed the cost on meant the client was paying £1 per month for a business system and this covered not only their stationery but also the accountant’s stationery.


Relating the re-action of London accountants reminds me of an incident that occurred some years later. At one city firm I visited, I was in the middle of a presentation to two partners who were clearly very interested in what I was saying, when the door burst open and a grossly overweight person, braces dangling around his knees, necktie askew with shirt collar open, sweating profusely and as irate as anybody I’ve seen interrupted the meeting and immediately turned on me, much to the amazement of his partners, telling me his firm had no time for Kalamazoo reps. and to clear off. His embarrassed partners then intervened and explained I was a practising Chartered Accountant, who was there at their invitation to explain the techniques I had developed to handle small firm clients’ accounts. There was then a short embarrassed interlude before I addressed the intruder. “Your behaviour and appearance are a disgrace to the profession and because you’re unlikely to live long enough to see the benefits of the CARL System, I’ll go”. At which point I thanked the other two partners for their time, packed up and left their offices. My early discussion with the other two partners made it clear the firm had a problem and clearly they could see the benefits of CARL.

Driving home I thought of the tale of Custer’s last stand when a junior officer, just before the battle was about to begin raced up to the General; “Sir, there’s somebody who wants to show you something. He says it’s urgent.” Custer replied angrily “Not now, can’t you see I’m busy!”. During a lull, in the heat of the battle, when things weren’t going well Custer asked about the message. The officer replied “He said he had a Gatling Gun, Sir.”


I continued to sell the manual format of the CARL System to accountants but the time and cost of visiting accountants individually and only selling ten Systems was not economically viable. Also, to my surprise, I found firms who had bought the System several months before had hardly bothered to introduce it to their clients and those that had were experiencing difficulties in explaining it to staff. This seemed unbelievable, because all the instructions and advice were printed on the client’s stationery and all the accountant had to do was provide a client with a code card made up to suit the particular needs of their trade and ask them to copy a code from the CARL Code card onto their cheque, to explain the nature of the payment and complete a CARL Cash sheet in duplicate, as an example for the client to follow. An exercise which took less

than half an hour from beginning to end and explain to staff when the bank statements and paid cheques came from the bank, to sort the cheques into alphabetically arranged sorting trays, according to the codes

applied by the client and when the Cash sheets came in to align them on the Summarizer Bars and Board and add them across. All the stationery was pre-printed and cross referenced but because they had never seen anything like it or the Audit Schedule spreadsheet before, so the System wasn’t used because they couldn’t understand it.

I had a chat with my contact at Kalamazoo about the problem and he said “Accountants aren’t salesmen you’ll have to sell the CARL System to their clients”. I thought, even if they had introduced and got 10 or 20 Systems installed and fully operational with clients in their practise, it would be swamped by the records produced by other clients which would demand priority so CARL would have little impact on their practice. Time for a re-think on marketing strategy.



The ICAEW is divided into District Societies throughout the country, so I reasoned if I select a central venue within a District Society and invite firms of accountants in that District to a presentation of the CARL System that might resolve one of the problems. I decided to write to them personally under my firm’s letter heading in the hope curiosity would attract their attention. A fellow practitioner willing to tell them how his methods and techniques had not only overcome the problems associated with handling incomplete records but also increased profitability and improved cash flow. This was unthinkable, potential competition coming to give all their secrets away. Well not exactly, I was hoping to sell them the CARL System for the benefit of themselves, their small firm clients and my firm Carl Accounting.

The presentations were well attended and I invited accountants who were interested in pursuing the matter to attend a one-day Partners Assessment Course, free of charge, at my offices, where they could

see the System physically in operation and talk to my staff. I would also explain what support services I would provide if their firm decided to adopt the CARL System. The first step I explained, would be to determine how many of their clients would be prepared to go along with a recommendation that they changed their record keeping methods to the CARL System and they would need at least sixty or 50 per cent of their clients to make the exercise worthwhile. Therefore, I would arrange a free presentation for their clients in a public venue in the vicinity of their offices, then if sufficient number of clients were interested I would hold a two-day introduction and training course for their staff to fully understand their role in the operation of the CARL System. However, for this service, I required some payment and they would have to pay their staff’s expenses for travel and accommodation.


Having determined the whole new marketing procedures, I contacted the ICAEW to obtain permission for practising accountants to hold presentations to their clients in public venues, such as conference hotels and this was granted before the first event. After which, complaints flooded into the ICAEW like a tropical rainstorm from other practising accountants in the town where the presentation was held and this continued to be the case as I went from town to town until I was told I had more complaints against me than the rest of complaints against members of the Institute put together. None of them justified because I had Institute permission before entering into the transaction. Important point, some businesses require permission from third parties before trading commences, otherwise problems will arise.

At business presentations, held three times a day to accommodate different business’s work patterns and availability the response to adopt CARL was always between 80 and 100 percent. The lower figure usually

because consultation with an absent partner was necessary. Also, they trusted their accountant’s recommendations on matters related to accounts and taxation. However, selling CARL to accountant’s staff was another matter and varied from the staff telling partners if the System was taken up they would go on strike to sabotaging the operation of the System when it was installed with clients. The sole reason, fear of CARL making them redundant, once the firm’s backlog was up to date.


During this time whilst driving to various venues and meetings I designed a ledger system which I described as based on the PACANA principle because the Personal Account, Control Account and Nominal Account were all written up at the same time. The Control Account enabled any errors to immediately be picked up and located and the state of solvency and profitability established instantly, and to prepare a set of accounts took no time at all. The CARL Combi Ledger System as it was called was protected by Copyright so I submitted it to Kalamazoo for evaluation by their Research and Development department. They never came back to me but Kalamazoo agreed to print the stationery and supply the loose leaf binder which was part of their excellent sturdy range of binders. I thought nothing more about it beyond installing it with my larger clients who kept it very well. The Kalamazoo 3 in 1 Ledger System by contrast wrote up a Customer Statement, Customer Ledger Account and Sales Day Book in one operation and on the purchases side a Remittance Advice, Suppliers Ledger Account and Purchase Day Book.



In the 1970’s the government were proposing to scrap Purchase Tax and introduce a new indirect tax, Value Added Tax and as this was going to affect the CARL System I took an exceptional amount of interest in what it entailed. I was highly critical of the proposed new tax and wrote several scathing articles about it which were published. This resulted in the BBC Money Programme inviting me to appear on a programme which Anthony Barber, the Chancellor of the Exchequer was speaking. My opposition to his proposals aroused viewer interest so much that within a few days I was invited onto the programme again, when I explained how uneconomic it was to administer compared with Purchase Tax, the millions of additional records that would be created between VAT registered traders which would produce no income for the Treasury and its extension to include services would place an enormous burden on the self-employed and very small firms. Shortly afterwards businesses with less than a certain turnover, now referred to as the statutory limit for registration, had the option whether to register or not. This was good news in one sense but caused a dilemma for some businesses as they reached the VAT threshold for registration because increasing their prices by 10 per cent or more could lose them customers so deliberate suppression of sales or legally getting around the turnover limit was an issue.

Retailers were faced with a variety of Retailer Schemes for calculating the VAT Outputs included in their sales. One particularly complicated and long winded way for recording and calculating VAT Outputs was Retailer Scheme D. I found a very simple way of achieving the same result which also compensated, like the CARL Cash Sheet for deliberate or accidental errors. The formula, VAT Inputs included in Goods for Resale / Goods for Resale inclusive of VAT x Normal Business Income = VAT Output Tax became known as Retailer Scheme D2. Five years later I received a letter of thanks and acknowledgement for the development of the Retailer Scheme D2 formula which I was informed had become widely used.


Despite the setbacks with accountants’ staff, sales were increasing at a steady pace and this had not escaped the notice of Kalamazoo who were despatching the System. Attending at Kalamazoo for a committee meeting I was approached by the Company Secretary who wanted to know if I would be willing to sell my copyrights to Kalamazoo. Now prior to this Olivetti, an Italian based company had been prevented

from infringing the copyrights and a letter from IBM to whom I had shown the CARL System, prompted a letter from them containing the words “We will not be responsible for infringement of your copyrights, however this may arise”. I immediately contacted my Patent and Copyright Agents and they arranged for me to meet specialist patent and copyright lawyers in London and at 2.30pm I was on my way to London. The meeting was for 5.0pm and after numerous assurances from their receptionist the lawyers were on their way, they arrived at 6.30 pm and five of them spent over an hour studying the CARL Coding structure. Whilst they were deliberating and discussing I was looking at their palatial offices in the middle of the City

and thinking ‘What’s this going to cost me’. Their unanimous verdict was the Copyrights were sound and protected by law. I never received a bill or heard from them again.


The lifetime President and founder of Kalamazoo who had effectively retired, unexpectedly and pleasantly attended a presentation near his home in the Cotswolds. After the meeting he brought up infringement of my copyrights. I said the CARL System is only sold to Chartered Accountants, who then recover the costs from their clients, which reduced their own stationery costs and more important to the accountant was the significant improvement in services to their clients and profitability to themselves. There was little financial incentive, if any, for them to print the stationery even if they could find a precision printer as good as Kalamazoo and finally, infringement of copyright is theft of property and could have serious consequences for them if reported to the ICAEW. On reflection I think he might have been looking for copyright safeguards.



As copyright negotiations became more prolonged I was wined and dined by Kalamazoo to try and persuade me to sell. However, it was perfectly clear they wanted the copyrights for as little as possible and when negotiations broke down, I approached Kalamazoo to form a partnership with Carl Accounting, set up

specifically, to market the CARL System. The managing director agreed to put the proposal to the Board and it was accepted. Kalamazoo matched my capital investment and become an equal partner in Carl Accounting. A press conference was arranged in London and resulted in national press publicity, with one

reporter describing me as a minor genius in the accountancy profession, much to my amusement after the time and hard work gone into reaching this point.

As Kalamazoo were anxious to seal the deal and get things motoring, so to speak, they suggested drawing up a preliminary partnership agreement to deal with the key points, with a more detailed agreement being produced by their lawyers at a later date. The content of the preliminary partnership agreement was acceptable and so I signed it. A partnership committee was set up consisting of myself, my deputy, the Kalamazoo group finance director, and Kalamazoo’s chief sales training manager. Kalamazoo also appointed a person who worked for the finance director to act as committee secretary and take minutes of partnership committee meetings. A professional advertising firm were appointed to produce a document to explain to accountants the make-up of the partnership and how the CARL System could benefit their clients and themselves. Carl Accounting described itself as “The Service Industry to the Accountancy Profession”, because we were doing something which was useful and practical for the profession. The ICAEW did not like the description and I learned many years later they had looked into whether they could stop me from using that description. It was a wakeup call for the ICAEW and sometime afterwards they set up Faculties to provide back-up and support services for accountants.

Eventually, a full blown partnership agreement arrived from Kalamazoo’s lawyers. It was a lengthy tome and took some reading. Quite a long way down imbedded in the document was a clause which set out events whereby Kalamazoo could acquire the copyrights in the CARL System. As these events could be generated by Kalamazoo I refused to sign the agreement unless the clause was removed. That the clause existed in the first place left me with worries about Kalamazoo’s real intentions for the partnership and as it turned out, apart from being involved with the partnership committee, they did very little. I realised from the outset Kalamazoo salesmen would not have the necessary knowledge to sell the CARL System to accountants, however, once the accountants had taken the bait they could be very instrumental in policing the System, encouraging its expansion and obtaining repeat orders. However, this was not to be and after two years of Kalamazoo’s failure to participate or contribute anything worthwhile to the partnership I was on the brink of dissolving it when, on return to the office one day I was told Lloyds Bank had tried to contact me several times. Our bank account was in Birmingham and the person trying to contact me was based in Guilford and worked in the Trustee Department of Lloyds Bank.


A meeting was arranged in Birmingham where it was explained to me the Trustee Department had been steadily declining and they were looking for more efficient ways of providing an accounting and taxation service to customers, which they had been doing quietly for a long time. After this initial meeting I went down to Guilford and showed a film, directed by a freelance BBC documentary filmmaker, giving opinions of ordinary business people who had been using the CARL System for over 10 years. You can see this film “Know How You Stand” by going to http//:www.

I met up with the head of the Trustee Department, a real gentleman who had survived internment in a Japanese Prisoner of War camp. We met several times for lunch at the ICAEW’s restaurant in Moorgate Place. As discussions progressed I began to become concerned about the reaction of accountants, if Lloyds Bank adopted the CARL System. I asked him how they would market their services and was told they would be restricted to new start-up businesses who did not have an accountant and existing businesses seeking to change accountant. I also told him I was concerned if the bank went ahead with operating the CARL System it was not going to be a short term arrangement because this could have bad repercussions. His reply was ‘Have you ever known the bank take up something short term?’.



Documentary film, “Know How You Stand”, explains how the CARL System works and gives independent views of businesses who had used the System for over ten years. Directed by a BBC freelance investigative journalist and documentary film maker.

Lloyds Bank had certainly done their research having checked acceptability of CARL with the Inland Revenue and Customs and Excise. A final meeting was held at Lloyds Bank’s head office, where I had to give a full presentation before key personnel whose vote would determine whether the bank would provide a Carl based Accountancy service. I was dismissed from the room while they considered their verdict and half an hour later I was told the bank was going ahead.

Carl Accounting now had 280 firms of accountants operating CARL throughout the country, Lloyds Bank about to start CARL based accountancy services and my partner was Kalamazoo, an international business systems FTSE company. What could go wrong?


To meet cries of unfair competition from the profession the ICAEW immediately raised its ban on advertising allowing all practitioners to advertise. Correspondence and meetings arose between the President of the ICAEW and the Chairman of Lloyds Bank, who confirmed bank policy to provide Carl Accounting services, by changing its Memorandum and Articles of Association to do so by special resolution passed unanimously at its AGM. Referrals by the profession to Lloyds Bank then ceased, accountant’s changed their own and their client’s accounts to competing banks and I received hate mail from practising accountants I’d never met but who had lost clients to Lloyds Bank, calling me a traitor to the profession and saying I should be struck off. Accountants no longer enquired about the CARL System or attended presentations. Articles appeared in the accountancy press, telling accountants they should prove they were the salt of the earth and stop moaning.


Orders fell off from existing users, although I thought it might be because banks were no longer going to return paid cheques but it turned out infringement of copyrights. A disgruntled client of one firm who had been printing the stationery advised me of infringement, whilst on another occasion I was waiting to see a partner of a firm to find out why their orders had fallen when they received a substantial delivery of Carl stationery not from Carl Accounting. We sued both firms and won our case hands down, but the time and cost compared with the damages and compensation hardly made the exercise worthwhile beyond practical confirmation of legal acceptance of the copyrights. Kalamazoo came across quite a number of other infringements but I decided I didn’t want to spend the rest of my life suing accountants and I was concerned about the thousands of businesses using the CARL System. The pot was simmering but I didn’t want it to get to boiling point which might make matters worse and damage Carl Accounting’s reputation.


With orders from the profession drying up I turned to marketing the CARL Combi Ledger which did not require co-operation from the profession and was completely stand alone. I raised the matter at a partner’s committee meeting held one Saturday morning in my offices. To the astonishment of me and three other members of the committee, the finance director of Kalamazoo leapt up and said “Not so long as Kalamazoo are a partner will the Combi Ledger be marketed.” After this pronouncement he stormed out of the meeting which then promptly ended. The rest of us adjourned to a local hostelry to discuss the extraordinary turn of events but it was only some years later after Kalamazoo went into liquidation and I was paid a visit by the ex CEO I learned of their real reason for wanting the copyrights but their R & D department had advised them of the CARL Combi Ledger’s superiority over the three in one ledger system and they wanted to bury it.



Lloyds Bank after three years and pressure from the banking side, who were getting a lot of flak from accountants, decided to close down the provision of accountancy services and I was invited to lunch at Armoury House in London to be told of the bank’s decision and asked if I could help them with their CARL customers. The week before I was told by the finance director of Kalamazoo they were restructuring because of financial problems and were going to dissolve the partnership. Therefore, I told Lloyds Bank I would set up an accountancy practise to take over their CARL customers.

I had no idea where Lloyds CARL customers were based, I knew nothing about them, I had no idea whether they would want an accountant based hundreds of miles away, I believed but didn’t know whether the CARL System would operate successfully in both personal and financial terms over a long distance and I didn’t know how well the bank customers had maintained the System, was it going to be a shambles or would it be reasonably well kept. Lloyds Bank, because they didn’t want to lose bank customers were very

co-operative in arranging and notifying CARL customers I was prepared to take over their accountancy work. They informed them I was a Chartered Accountant and developer of the CARL System, responsible for setting up the banks CARL accountancy services. The next few weeks I spent on the road visiting Trustee

branches throughout the country, signing up clients and picking up surplus stationery stocks. In 1985 I ended up with a practice larger than the one I sold in 1977.

I discovered the clients had kept the CARL System very well and the bank staff were to be complimented on their installation of the System with customers. Unfortunately, the process of winding down the department had resulted in a significant amount of unprocessed client records which I estimated would cost around £30,000 to bring up to date. I brought this to the attention of the bank and they paid me £20,000 on account with a promise to pay the rest when the work was complete and the balance known. I kept accurate records and when the work was complete it came to £32,600 and I approached the bank for the balance. Unfortunately, the person who had agreed this with me had retired and none of the remaining staff were made aware of the arrangement, consequently I never got paid. I should have got it down in writing but the person’s retirement in the near future was not expected and verbal agreements to perform contractual duties had been made before and honoured by both parties because we had always worked as a team when the bank were setting up and operating the CARL System and now it was closing them down.


Kalamazoo continued to print the CARL stationery and in 1988 the CEO of Kalamazoo nominated me for membership of the Institute of Marketing, now the Chartered Institute of Marketing and I became the first Chartered Accountant to qualify via the senior entry qualifying route.


Two of the first IBM personal computers that came into the country were bought by my practice at £9,000 each. I took one home and kept one in the office. It was some years since I went on the IBM course and now I decided to look into computer programming again. I read an article about spreadsheet programming where the writer was comparing Borland’s Quattro Pro programme with Microsoft’s Excel programme. He came down heavily in favour of Borland and so I bought Quattro Pro a massive programme. I remember when I went to pick it up from the shop, the owner said, as she handed me a huge box of books “You’ve got your work cut out there” and she was right. The CARL System was computer compatible so I started to write a programme to carry out the processing and accounting work done by staff. After 18 months the programme was complete and after successfully running several clients’ records through it, I demonstrated it to the processing staff who could see it was doing all their work and that they would not all be needed in the foreseeable future. I gave them 12 months to find alternative employment and a number were taken up by my larger clients who required clerical / secretarial staff. It all worked out very well. Shortly after this Kalamazoo sadly went into liquidation and I had to find another competent printer. Fortunately, I had a very large stock of CARL Systems, so there was no great urgency as I had stopped selling to the profession some time ago and was only catering for my own clients. Furthermore, the accountant’s stationery was now being printed by the computer as it processed client records.


Satisfied after three years that I was fairly competent at writing a variety of programmes in Quattro Pro I turned my attention to studying the C and C++ languages. Also, I became and remained for some years a main committee member of the IT Faculty, which gave me access to computer software of companies seeking accreditation for their products from the ICAEW. I was not impressed with any of the programmes which were long winded to learn and were virtually book-keeping on a machine. If clients did not understand and were not prepared to keep business records manually they would not be capable or willing to maintain them on a computer. A salesman had told a client of mine if he computerised his records my

fees would be reduced. Fortunately, the client contacted me to verify this because the software wasn’t cheap. I told the client if he took on a computer my fees would probably go up as the CARL System, although computer compatible, would not be compatible with the way the computer programme was written. In fact, I was writing several articles on the subject which were being published in the accountancy press and led to an invitation to apply for membership of the newly formed Institute of Analysts and Programmers of which I was made a Fellow and the Certified Public Accountants of America invited me to give a lecture on

the CARL System in New York, where I gave them an inter-active demonstration, faxing my staff in England

to process the information the accountants created in America. The presentation was held at the Rocker Fellow Centre in New York and ended with them clamouring to take out a franchise next day for which I was not prepared.


I persevered with learning C and C++ and became fascinated with computer graphics and animation. I wrote a programme which converted from the view of a city, like New York or Canary Wharf with ticker tape and rolling board messages telling the date and time and reminding the user whether their VAT Return was due at the end of the month or if was a Lottery Day, with an animated lottery hand winking at them. Using animation, a red carpet was rolled out and the user led up to a revolving door, the buildings were then transformed into a lift situated in a foyer where four world clocks told the user the times in New York,

London, Bangkok and Hong Kong against a background of the world. Depending on the time of year a Christmas tree with working fairy lights or Easter egg appeared. The lift had a number of floors. Foyer,



Personnel, Wages, CARL Room, Boardroom, Library, Court. The Foyer I have just described, the Personnel floor had a filing cabinet, which when clicked opened to revealed file tabs, which when clicked exposed a record of that person’s details. Wages were much the same as Personnel, the CARL Room allowed the user

to select which documents they were going to process, Bank, Cash or D, C & S, the Boardroom displayed limited company information such as company number, date of registration, Company House filing dates etc., the library contained books on Company Law, Contract Law, Partnership Law, Commercial Knowledge.

Click on a Book and down it came open at the Index page, which then turned to the page selected. On the top floor was a court room with a judge and rows of seats. In front of the judge was a panel. The user selected what subject they wanted to be questioned on and questions would be printed on the panel in random order, which the user had to answer. If they got it wrong the appropriate fine or prison sentence was pronounced and the user referred to the library, where the book was open at the appropriate page.

In 1996 a fellow chartered accountant, with whom I sat on the founding committee of the Shropshire Society of Chartered Accountants, was so impressed with my programme he nominated it for entry to a British Computer Society competition. Two persons came from the Society to assess the programme. They were supposed to spend an hour but ended spending almost all day. When we went for lunch at a local hostelry, they wanted to know why I had written a programme that would put me out of a job. I said ‘If I don’t do it somebody else will and in any case it wouldn’t put me out of a job’. They then asked me how many businesses were using the programme, I said I had not introduced it to anybody at that stage. To which they replied ‘It is a condition of the competition that the programme is in use with third parties, so we cannot put it forward this time but we’ll put it on the back burner’. They then invited me to become a member of the British Computer Society, which I duly accepted. Although I was happy with the graphics and the invitation I was by no means satisfied that the programme was suitable for marketing to small firms. Apart from the graphics, which after the umpteenth time could become boring even irritating as you waited for the lift to reach the floor, the programme was not much better from the users’ perspective than others on the market of which I had been so critical. So I did not pursue marketing of the programme which in my opinion did not flow and was a long way from what I needed to achieve, based on my many years’ knowledge of the market place at which I was aiming.


Because of my interest in computers and their use in accountancy the subject of Artifial Intelligence came to my notice and I followed this up because some years earlier, the notion of whether computers could be programmed to think had crossed my mind. After studying the subject, I came to the conclusion there is nothing magical about Artificial Intelligence and I will try and explain. The human stores knowledge in receptacles in the brain, which knowledge accumulates over a lifetime. The receptacles of the human brain equate to databases created on the computer by the computer programmer. When an event occurs the human brain rapidly cross-references the information stored in its various receptacles to draw a conclusion

and make a decision. Similarly, when a user keys information into a computer the programme rapidly cross compares the knowledge stored in its databases to arrive at a conclusion. Sometimes humans are asked a question or an event occurs, to which they cannot immediately respond because they have no knowledge, either they have to obtain more information or simply answer they don’t know. Likewise, when the user keys data into the computer its databases will either hold that knowledge to perform a task or the information keyed in will be deficient in some way when the programme will ask for the missing information or it will be incorrect and the computer will tell the user of the problem. Computer programmes are written to perform specific tasks for specific scenarios and to that extent they can control the user to ensure they obtain correct information, which they turn into knowledge to create accurate databases. The quality of artificial intelligence in a programme, is dependent on the programmer’s knowledge of the subject matter, the market place they are aiming at and their own skills as a programmer.

In 2004 I wrote a paper on how the CARL System enabled Knowledge Based Artificial Intelligence to be incorporated into the writing of accountancy programmes. I submitted this to the British Computer Society and after lecturing to a panel of four for several hours and being questioned on the subject at Staffordshire

University, I was made a Chartered Member of the Society. When I was packing up my equipment to go home I asked the Chairman of the panel why it had taken so long because my wife, who thought I’d only be an hour, had been waiting in the car park. He simply said ‘Oh sorry. We’ve been learning from you’.



Two years later in July 2006 I set about writing a computer programme to incorporate Knowledge Based Artifial Intelligence so clients would only require my services in an advisory capacity. The operation of the manual CARL System with thousands of small firms over 36 years had proved successful and coding errors and cash mistakes were as rare as hen’s teeth and as computers were becoming more common place and affordable I set about computerising the CARL Accounting System to operate remotely, with me effectively looking over a client’s shoulder giving instructions and advice. Because I was somewhat rusty writing in C and C++, which I had not done for some years, I wrote the programme in Quattro Pro being aware of the refinements possible if written in C and C++ and I could achieve what I wanted to do.

The first step was to determine what knowledge CARL needed to structure the databases to respond to new and existing clients’ requirements not only in setting up their first business Balance Sheet to operate CARL but also to instantly and accurately handle every type of transaction. To do this I simply wrote a programme to follow what I did from signing up a new client to processing their records to produce accounts, except now I had to incorporate artificial intelligence to replace myself to verify the accuracy of the information supplied. A very time consuming exercise when you consider the combinations of business categories, legal statuses, VAT classifications and variety of straightforward, quirky and specialist transactions CARL had to handle and address. I had already discounted the idea of having different screens for different types of transactions and I very definitely did not want the user to have to undergo any kind of complex instructions. They had to be simple, instant and obvious, in a word, self-explanatory, with the overkill of controlling and directing the user every step of the way. Because most business owners are involved with practical activities of buying and selling, I wanted them to see instantly in a practical way what happened when they entered into a transaction and thus learn by example the impact of their decisions and activities on their business finances, as paper transactions reflect in monetary terms the physical activities undertaken by the business. I wanted to kill the words “I don’t understand my accounts and therefore their relevance to my business, beyond settling the tax”. The manual CARL Accounting System had provided information to me to reliably advise clients on business, finance and taxation matters and I asked myself how Knowledge Based Artificial Intelligence could enable the results to be interpreted for business management purposes.

When I wrote the book “A Complete Approach to Incomplete Records”, I referred to the CARL System as the PDCR System, Prime Document Code Referencing System. It was only after attending a Round Table District Society Dinner that it became known as the CARL System after I had spent the evening with a fellow guest who was involved in marketing and he said nobody will remember PCDR System. I said “It’s PDCR System” He replied “You see what I mean. Nobody will remember the PRCD System”. OK message received loud and clear so CARL System it became. However, I now refer to the PDCR System both as Prime Document Code Referencing and Payment Document Code Referencing System, where the Payment could be either made or received. As mentioned previously payments flowing out and in of a business arise

because of transactions which are the lifeblood of the business all the rest are in incubation. Stock, Debtors and Creditors are hope value. Hope to sell the stock, hope the Debtors will pay and hope to pay the Creditors. If the value of payments flowing out exceed those flowing in the business is heading for the rocks. If payments are flowing out faster than payments flowing in this is also dangerous signal. The sooner these adverse trends are spotted, measured and the cause analysed the sooner correct remedial decisions and action can be taken.


In October 2010 I had finished writing the programme in Quattro Pro and I knew Java to be the latest of developed languages, the industry standard that had a similar construct to the C and C++ language. I reasoned because of my age I ought to get somebody else on board with up to date programming skills and knowledge. I approached the Institute of Analysts and Programmers and several local firms to find a

programmer, able and willing to translate the programme into Java, but without success. One firm was prepared to write the programme in PHP, provided I gave them a lot of help. In the end I contacted Aberystwyth University of Wales, where I had been a guest lecturer and some years previously had sat on the board of external advisors. The advert for the position was answered by several candidates and I eventually appointed a foreigner who had recently qualified with a BSc. in computer sciences and was



progressing to MSc. He took the programme away to study what was involved and to estimate the time it would take him to translate the programme into PHP, a language I had never heard of and didn’t know so went along with his recommendation. He came back some months later with an estimate. As part of his degree course, accounting was one of the papers and he was confident he could translate the programme by the end of October 2011. He was Polish and spoke and wrote perfect English so there was no problem with translation between us or in the terms of his contract. He achieved his MSc qualification and I met some of his tutors who held him in high esteem.

As his translation progressed I became aware that writing the programme in PHP enabled enhancements and refinements to be introduced which were not possible in Quattro Pro. Consequently, I acknowledged that the timescale had to be extended as well as his fee. He did, however, have to make a living as his fee was only payable on completion and he had absorbed the 10 per cent deposit. I did not insist on a late penalty clause because I knew he hadn’t any money. Working in the daytime meant he only worked in the evenings and week-ends when he was tired and obviously had domestic chores to do. As the months progressed I recognised his knowledge of accountancy was very limited and he knew nothing about Artificial Intelligence, making revamping of the data base structure essential. After 20 months he asked if I would release him from his contract and I reluctantly had no choice as he returned to live in his native Poland. I continue to keep in touch with him and have learned that he is fully conversant and fluent in the Java language having gone on to other computer projects.

I started to learn the Java language but soon realised, as with C and C++, it takes years to become really fluent writing and applying them to projects. You remember earlier I mentioned about life’s little mysteries? A few months later I met and got speaking to a person in my local who turned out to be a computer programmer, fluent in Java, with decades of experience in writing programmes in semi-related subjects. Although he knew absolutely nothing about accountancy we discussed the possibilities of him taking up the project and writing it in Java Enterprise 7. His agreement to do so, put the project back on the map, he was able to make use of some of the Polish programmers work and I explained the nuances of accounting the CARL way. So called “Cloud” accounting is the future way forward introducing new horizons for exploration which led to further delays in pursuit of perfection. However, everything is now on track for a release some ten years after I started to write the initial programme.


I have pursued the subject relentlessly since the early days of research in 1965 and have now gone full circle returning to my first observations referred to in my publication of 1969. The majority of transactions are evidenced by a document and when odd petty cash transactions are not, CARL has a safe way of dealing with them. Over the years I have yet to find a business proprietor who cannot identify a business Document, for example a Purchase invoice, and correctly establish the Nature and CARL Code Analysis of the transaction, like T = Telephone. They also have no problem recognising the Date, Name, and Amount of the transaction. With C.O.L.A. (CARL On Line Accountancy), Systems the client selects the Document, Nature, and Analysis, and Date, Name and Amount of every transaction, which builds into a unique DNA of their business, which Artificial Intelligence can use to advise and guide them to success. However, you may recall, I referred to Knowledge Based Artificial Intelligence. As a healthy borne baby has a unique brain so C.A.R.L. has a unique programme. What they both need is knowledge and the more knowledge they have the more intelligent and useful they both become. In the case of CARL to the point where it virtually does your accounts and tax returns. All CARL requires is the transactions D.N.A.; Document, Nature, Analysis and Date, Name, Amount. After a while CARL using Artificial Intelligence will even enter data automatically for approval. The transaction DNAs combine together to give the business its overall unique DNA.



If you have had a chance to watch the film Know How You Stand you may recall the farmer’s wife saying, “There’s no more to say about it (CARL). We thought it was so simple it wouldn’t work. But I mean it has.” Well the computerised CARL System is even simpler now and you may remember the hairdresser’s comments “Now the accountant can tell you how you stand from month to month or quarter to quarter. You don’t have to wait twelve months to find out how your stood. Sometimes as small businesses you never

know how you stand” now he’d be saying: “Now you know how you stand every day. You don’t have to wait for your accountant to tell you.” All the requirements made by the other businesses in the film “Know How You Stand” have now been met with Knowledge Based Artificial Intelligence.


I am not a skilled motor mechanic with many years training under my belt. Therefore, if things are going wrong I just want the mechanic to tell me in layman’s terms what the problem is and what needs fixing. I can then make a decision what I ought to do. Remember the chap in the Cushy Holiday Hotel.

Similarly, it’s unlikely you’re an accountant with many years training under your belt. Therefore, I will not bore you with a load of technical accounting jargon about understanding and interpreting accounting ratios but CARL will tell you if you have a problem, what it is and what your options are for putting it right.

What about the cost I hear you thinking?

When the manual CARL System was operating charges were based on the volume of transactions that had to be processed and that principle is applied with the computerised version because it is fair and transparent as between all users. And that charge includes everything; there were no hidden extras.


When the computerised version is up and running with sufficient clients I will encourage them to actively participate in future developments to keep CARL relevant to ever changing and challenging environments in our diminishing technological world. I am already examining into ways whereby participation may be achieved for the benefit of COLA Systems Limited and its participating clients.

One development already on the cards and for which COLA Systems is already geared is inter-business comparisons to measure the top, middle and lower quartile of business performances, involved with similar business activities and in similar localities. Because every business will have a common accounting procedure and chart of accounts, they can anonymously and reliably compare their performance with their competitors. It is quite possible that businesses with similar DNA’s can be compared even more accurately. For example, a business’s DNA can tell us a lot about a business, does it employ people, how many does it employ, does it rent premises, own premises, work from home etc. etc. The enquirer will be able to accurately locate businesses in a very similar business situation but will not have a clue or be able to find out who or exactly where they are only that their business DNA profiles closely match their own. This information can also be very useful for prospective business entrepreneurs when preparing their business plans and budgets. How do they compare with competitors? All too often they can be over optimistic, but then again, they wouldn’t be entrepreneurs if they didn’t have some optimism and enthusiasm in their blood stream.

Businesses compete with each other and wise competition is both healthy and good from the point of view of innovation and maintenance of high standards, which benefit the consumer. In my opinion, competition based solely on price can result in falling and in some cases unacceptable standards somewhere along the line, of which the ultimate consumer may be unaware, for example, poor living standards of manual workers not paid a living wage. Exploitation of small businesses by massive organisations forcing prices down until the small businesses livelihood and existence is at stake. Other examples, are sub-standard materials or workmanship, hidden or puffed up by ‘spin’ advertising which is economical with the truth. These practises occur in businesses both large and small and prove no good in the long run impacting on business profitability and ultimate survival.



A business, in my opinion, should never be closed to sensible, reasonable and fair co-operation with other likeminded businesses, because this can prove advantageous to both the businesses and their customers. I am certain Kalamazoo would still be in existence today, if they had been more open minded and co-operative in the partnership, instead of having their own private agenda which they kept hidden for a long time. When they dissolved the partnership I signed a five-year non-disclosure “silence” agreement but

didn’t know why because I knew nothing about Kalamazoo’s side of the business and I couldn’t think of anything secretive about mine.

I have told the story of my business life during the development of the CARL System, with one or two anecdotes thrown in, to tell any budding entrepreneur readers the sort of circumstances that can arise in business. Every business is different and it is necessary to keep a cool head and retain your focus when unforeseen things happen with vouching stamps or businesses unexpectedly dissolve with partners leaving you stranded. My advice is to remember the sayings ‘What goes around often comes around’ and ‘Honesty is always the best policy’. In my life’s experience love, kindness, understanding, forgiveness, and tolerance of another person’s point of view, will generate goodwill, friendship and ultimate success.

Finally, the key to success in any business is to make the right decision at the right time. This requires sound judgement based upon reliable up to date information. A very important source of information is up to date reliable accounts; for rarely does bankruptcy occur overnight but more usually is the result of a gradual deterioration in profits that have gone undetected and unchecked, until they have eroded resources beyond repair.


Giving a business advice without up to date reliable accounts is like a doctor diagnosing a condition without a patient’s health records and a physical check.

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