Cash payments or disbursements journal

Cash payments or disbursements journal

cash disbursement

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This can be anything from purchasing inventory, raw materials or even utilities. Regardless of the reason for the cash disbursement, there must be internal controls in place to safeguard against fraud. A good internal control system will break down the cash disbursement responsibility into at least two separate jobs. One person should be responsible for entering bills into the accounting program and printing the payment checks, and another person should be responsible for signing those checks. Separating these duties once again enables there to be a system of checks and balances.

Disbursements measure the money flowing out of a business and may differ from actual profit or loss. For example, a company using the accrual method of accounting reports expenses when they occur, not necessarily when they are paid, and reports income when earned, not received. Managers use the ledgers to determine how much cash is disbursed, and they track its use to determine spending ratios.


A cash disbursements journal allows you to record all cash payments for a certain time frame, such as on a monthly or quarterly basis. Accounting software can prepare the journal for you based on checks you write through the system; otherwise, you can record your transactions manually. In the latter case, purchase a cash disbursements journal from an office supply store or use an office suite program to calculate and record the information yourself. If your federal student loans and other financial aid isn’t enough to cover your expenses, consider a private student loan as a possible option. Student loans must be disbursed in at least two payments, with the second payment made after the mid-point of the loan period.

If you can get a bank account, it will be easier to get your financial aid refunds from your school (many schools offer direct deposit options). You don’t need to pick your school’s bank or credit union. It’s worth noting that many banks offer student accounts with no fees or minimum balance requirements. Most financial aid sources will submit their payments directly to the school on your behalf.

Because of this, there must be a system of cash control within the organization. The best way to control cash is to establish a set of internal controls.

Without it, temptation could rear its ugly head and cause an otherwise rational person to do questionable things. Checks could be written and signed by the same person and used for whatever they wanted. Bills could be bogusly put into the system just for an individual to write themselves a check. Cash disbursements, also called cash payments, in accounting refer to payments made by a company during a specified period, such as quarter or year. It includes payments made by cash, but also by cash equivalents like checks or electronic fund transfers.

A disbursement is the payment of money from the source. In the case of financial aid, the payment of money comes from your aid source (the federal government, school, private student loan lender, etc.), and in most cases, will be paid directly to your school. Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid.

Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with your school or lender directly for information related to your personal eligibility. About FAFSA The first step to receiving financial aid is filing the FAFSA. Scholarships Scholarships provide students with free money for college. Choosing Loans Learn about federal and private education financing.

Internal controls are rules and regulations that are put into place to guard assets owned by a person or a company. Cash must be protected at both receipt and disbursement. Cash receipts are money received from consumers for the sale of goods or services. The most effective way to protect cash at both receipt and disbursement is to have both written protocol on cash handling and separation of duties.

What is the difference between cash receipts and cash disbursements?

A cash disbursement is the outflow of cash paid in exchange for the provision of goods or services. A cash disbursement can also be made to refund a customer, which is recorded as a reduction of sales. Yet another type of cash disbursement is a dividend payment, which is recorded as a reduction in corporate equity.

A cash disbursement journal is a record kept by a company’s internal accountants that itemizes all financial expenditures a business makes before those payments are posted to the general ledger. On a monthly basis, these journals are reconciled with general ledger accounts, which are then used to create financial statements for regular accounting periods. Cash disbursements are monies paid out to individuals for the purchase of items that are needed and used by a company.

cash disbursement
  • Typically, colleges apply the money to your student account to cover costs like tuition and fees, room and board, and more.

But sometimes your aid may over pay your account, which may result in a credit balance. Your school will review your account to determine if this credit balance should be refunded to you or your parents (if they took out a parent student loan to help with your education).

Each entry on the cash disbursements page should include the date, amount, payment method and purpose of the transaction. 1Interest is charged starting at disbursement, during school and the separation/grace period, and until the loan is paid in full. Payments may be required during the grace/separation period depending on the repayment option selected. Advertised variable rates reflect the starting range of rates and may vary outside of that range over the life of the loan. Advertised APRs assume a $10,000 loan to a freshman with no other Sallie Mae loans.

cash disbursement

The aid goes to pay your direct costs owed to your school –like tuition and fees. Depending on the type of aid you were awarded, you may receive multiple disbursements which will add up to the full amount you were awarded for the year. Your school defines your payment schedule, and will disburse money based on those timelines. And it’s not uncommon for different programs—bachelor’s degree, associate degree, certificate program, etc.— at the same school to have different payment schedules. Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans.


For example, if your business uses the accrual method of accounting, you report expenses when you incur them, not when you pay them. Similarly, income is reported when you earn it, not when you’re actually paid. But, if your earnings aren’t coming through as quickly as you’d like but you’re paying expenses, you could be reporting a profit but run out of cash. A cash disbursements journal serves as a checkbook ledger, which is used to help create other financial records, such as a balance sheet. One of the best ways to figure out what to include when calculating cash disbursements is to include all cash payments, such as accounts payable, petty cash purchases and operating expenses.

What Is a Cash Disbursement in Accounting?

Separation of duties means to separate one big job into several smaller jobs, with a different individual performing each. This has eliminated the need to manually record transactions in an individual journal such as the cash disbursement journal. When accounting transactions were recorded by hand, the entries would have been manually recorded into a cash disbursement journal first and then transferred to a general journal. Cash disbursements measure the amount of money that’s actually flowing out of a company, which may be very different from the company’s actual profit or loss.


The student receives a credit to his account to pay tuition and fees and receives the balance by check, direct deposit, or another method agreed upon. Cash outflow or payment of money to settle obligations such as operating expenses, interest payments for loans and accounts receivables during a particular period in order to carry out business activities. Usually in the form of cash, plastic money, check, warrants, and Electronic fund transfers.

Disbursements must be made in equal installments that can be no larger than half the total loan amount. When you take out a loan, cash in a retirement account or inherit a sum of money, you often receive your money in the form of a disbursement check. As with any check, you can attempt to cash a disbursement check at your own bank or at the bank on which the funds are drawn. Disbursement checks are often large dollar checks, which means that banks cashing these items have to take extra security measures before giving you your cash.

Typically, colleges apply the money to your student account to cover costs like tuition and fees, room and board, and more. Check with the financial aid office to get your school’s disbursement schedule. A student loan disbursement is the paying out of loan proceeds to a borrower, who is the student. Schools and loan servicers notify students of the disbursements in writing, including the amount of the loan and its expected disbursement date. They then disburse Federal and private student loans, typically two or more times during the academic year.