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Winning Points About Disbursements That Could Save Your Company
Understand Financial Disbursement

How you handle disbursements is a major aspect of any business.

  1. Track Incoming and Outgoing Funds: It’s essential to know both what is coming in and what is going out. Outgoing funds, or disbursements, can be divided into necessary expenses and discretionary spending.
  2. Control Disbursements Rigorously: Effective control of disbursements is crucial. It can determine whether a company expands or fails.
  3. Monitor All Debit Orders and Regular Disbursements: Always be aware of the value of incoming funds and what needs to be purchased to maintain production. Only consider expanding production after these essentials are covered.
  4. Prioritize Spending:
    • Ensure creditors are paid to maintain good credit standing.
    • Purchase items directly related to production.
    • Invest in items that will expand production.
  5. Adopt the Correct Viewpoint on Disbursements: Avoid the trap of continuously buying and paying for unnecessary items. The correct approach is to evaluate if a purchase is necessary and if it will improve production. The person in charge of disbursements controls the lifeblood of the business.
  6. Emphasize Saving: Contrary to the focus on spending, it’s vital to save. Maintain a reserve pool of funds for major, unexpected disbursements. For instance, if an employee sues the company and wins, having no reserve could be disastrous.

Auditors, accountants, financial managers, and financial planners must keep track of disbursements and ensure a robust financial plan is in place. This plan should account for regular expenses and include reserves for emergencies.

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