What is a cash disbursement?

A cash disbursement refers to the process of paying out money or funds from a company's cash account to cover various expenses or obligations. It includes payments made for purchases, salaries and wages, loans or debts, taxes, utilities, and other operating expenses.

Cash disbursements can be made through various means such as checks, electronic transfers, or cash withdrawals. These payments are typically recorded in a company's cash disbursement journal or register to keep track of all outgoing cash transactions.

Effective cash management requires proper management of cash disbursements to ensure that the company's expenses are managed efficiently while maintaining sufficient cash reserves for future needs. Companies often implement internal controls to ensure the accuracy and reliability of cash disbursement processes and to prevent fraud or errors.