Account Identification for Automatic Data Processing

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Abstract
It is common in manual or senti-automatic bookkeeping practice to identify an account by using as a key the name of the person or firm to whom the account pertains. For many reasons, names are not well suited for use as keys in automatic data processing systems. The problem of developing a system of account identification keys meeting the requirements imposed by automatic machines is examined in this paper, and solutions are described for certain simple cases. A novel application of Huffman's method for constructing minimal-redundancy codes leads to the design of account keys that minimize the number of passes required in sorting documents by accounts. Specific examples have been chosen from banking, in particular from checking account bookkeeping; however, the point of view of this paper is readily applicable to payroll, accounts receivable, and similar accounting systems. 2. Manual and Automatic Practice The replacement of written ledgers by automatic storage devices necessarily entails certain fundamental changes in the methods used to identify individual accounts in the ledgers. This follows from important differences in the capabilities and limitations of clerks and ledger cards on the one hand, and of automatically sequenced machines and mechanical storage media on the other. For instance, it costs but little to provide space for long names on a ledger card, but room for, say, twenty letters is considerably more expensive in an automatic memory. Furthermore, since only a small fraction of the possible 26 ~° combinations of twenty letters can conceivably be used, the corresponding key system is highly redundant. It is a time-consuming matter, but not one of excessive difficulty, for a clerk familiar wiith a section of an account ledger to read the signature of a depositor on a check, and consequently to relate this check to the proper account. Even if the names of two depositors differ only by a middle initial, and one or both chronically omit this initial from their signature, a clerk usually can readily and correct]y identify the depositor. One bank reports having seventy joint "Smith" accounts. To post properly to these accounts, a bookkeeper must memorize the signatures, or refer to an index. Automatic operation under such circumstances would be highly inefficient if not impossible to achieve. Sorting of checks, whether incoming or outgoing, is at present performed by clerks using a variety of mechanical aids. While many checks are sorted accord

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