Disbursement

The payment or distribution of money, typically from organizational funds for expenses, loans, or other obligations. Disbursements represent actual cash outflows and require proper authorization, documentation, and control procedures to ensure appropriate use of resources.

Imagine a university's financial aid office disbursing $10 million in student loans at the beginning of each semester. The process involves verifying student eligibility, coordinating with lenders, and ensuring proper application of funds to student accounts. Each disbursement must follow specific regulations and internal control procedures.

Managing disbursements requires efficient payment systems, strong internal controls, and accurate record-keeping. Organizations must balance payment timing with cash management needs while preventing unauthorized or fraudulent payments.