Cash
Disbursement
Cash disbursement can be
defined as the payment of money or cash for different expenses or
discharge of a debt etc. It can also be made through writing cheques.
Cash disbursements can be made for the following:
- Loan payment
- Salary & wages payment
- Draw on a construction loan
- Advance on salary
- Discharge of a debt
- Payment of an invoice
It is important to keep a proper check while making cash
disbursements and the objective of internal controls for cash
disbursements is to ensure that:
- Cash is disbursed only upon proper authorization of management
- Cash is disbursed for valid business purposes
- Cash disbursements are properly recorded
Large and medium companies are outsourcing their cash disbursement
process to accounting firms for timely, efficient and accurate
disbursement of funds. This helps them concentrate on other vital areas
and meet their current liabilities on due date. These accounting firms
use technically sophisticated softwares to remove the possibility of any
error and also to ensure timely payment.
