A cash disbursement is a distribution of cash by a company. It includes anytime cash leaves the company, through any means and for any purpose.

Examples:

1.Cash paid for motos

2.Cheque to supplier of inventory

3.Bank transfer to employees for salary (payroll) or a loan

4.Refund made to a customer

5.Internal transfer from one bank account to another

Qs: What are the different types of cash disbursements that you know of?

Again, controls over cash transactions are very important because cash is relatively easy to steal and easy to convert to other assets.

Companies have a few different processes for paying and recording cash disbursements, depending on the type of disbursement.

Companies disburse the following forms of cash:

1.Physical cash

2.Cheques

3.Electronic transfers (through the bank or third parties)

4.Mobile money

As we’ve already discussed, controls over cash are key, as cash is the most liquid asset a company owns. Everyone wants cash! Cash on hand can be tempting, as we’ve seen in earlier fraud examples.

Qs: So we know what cash is being spent on, but what are the forms cash actually takes to leave the company?