DEFINITION of 'Delayed Disbursement'

A cash management technique that involves a company paying vendors and/or other creditors by checks drawn on banks located in remote areas. Commercial banks will typically delay the availability of funds to the depositor of such checks for up to five days as they await payment from the paying bank.

BREAKING DOWN 'Delayed Disbursement'

Companies use this technique as a way to maximize disbursement float, a term that describes a decrease in book cash while delaying a change in bank cash.

RELATED TERMS
  1. Remote Disbursement

    A cash-management technique that some businesses use to increase ...
  2. Deferred Availability

    A delay in the availability of funds to the holder of a commercial ...
  3. Controlled Disbursement

    A technique commonly employed in corporate cash management. Controlled ...
  4. Disbursement

    The act of paying out or disbursing money. Disbursements can ...
  5. Cash Concentration And Disbursement ...

    A type of electronic payment used to transfer funds between remote ...
  6. Uncollected Funds

    The amount of a bank deposit that comes from checks that have ...
Related Articles
  1. Investing

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
  2. Insights

    The Role of Commercial Banks in the Economy

    We interact with commercial banks daily to carry out simple financial tasks. That said, the function and creation of a commercial bank is anything but simple.
  3. Small Business

    The Best Banking Services for Your Business

    Find out which banking services can offer a small business the best opportunities for reducing cost and fraud while managing its cash flow more efficiently.
  4. Personal Finance

    10 Bank Promotions That Pay You To Open An Account

    Find out which banks are running cash promotions this summer.
  5. Personal Finance

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  6. Personal Finance

    Delayed Interest: Buy More, Pay Much More Later

    Find out the real cost of buying on a delayed interest plan.
  7. Investing

    What's a Commercial Bank?

    A commercial bank is a type of financial institution that accepts deposits, offers checking account services, makes business, personal and mortgage loans; and offers basic financial products ...
  8. Insights

    The World's Top 10 Banks

    Learn more about the world's largest banks and how more financial power shifts eastward as China is home to four of the world's largest banks.
  9. Investing

    Float

    Float is money in the banking system that is briefly counted twice due to delays in processing checks.
RELATED FAQS
  1. What is the difference between drawdown and disbursement?

    Learn about some of the many definitions for financial drawdowns and disbursements, which represent transfers of funds between ... Read Answer >>
  2. What is the difference between holdover float and transportation float?

    Find out about float, which may become a thing of the past due to the steady decline of check writing and new services in ... Read Answer >>
  3. How does float affect the nation's money supply?

    Learn how float affects the appearance of the nation's money supply, and receive a brief lesson on how the U.S. government ... Read Answer >>
  4. How does bank reconciliation affect a cash control policy?

    Understand how the bank reconciliation process augments a company's cash controls and is an essential part of proper cash ... Read Answer >>
  5. What's the difference between investment banks and commercial banks?

    Understand the principal differences between investment banks and commercial banks, and the areas of banking services that ... Read Answer >>
  6. Why does float usually increase at the beginning of the week?

    Find out more about float and how checking float is created in the American banking system. Learn more about why the Federal ... Read Answer >>
Trading Center