What Is a Cash Disbursement Report?

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A cash disbursement occurs whenever a business spends money. Accountants record these expenditures in the company's general ledger. The cash disbursements journal provides a chronological record of all disbursements; a cash disbursement report provides a detailed analysis of all disbursements for a given time period. Disbursement reports are often customizable for financial information users.

Definition

  • Both cash basis and accrual accounting record cash disbursements transactions. Cash basis records the transactions whenever cash changes hands. Accrual accounting requires transactions recorded whenever a financial event occurs. Cash disbursements have their own journal so companies can easily review all cash-related transactions. The cash disbursements journal is not the same as a disbursement report.

Reporting

  • Cash disbursement reports information in a specific format. Accountants can modify this report to list the transaction date, a brief description, the amount and any accounts holding the information. Cash disbursement reports often have a specific use. For example, an owner may desire information on the cash spent for a specific project. The cash disbursement report will list this information for management review.

Format

  • When a company spends cash, it incurs a cost or an expense. Cash disbursement reports may have a different format for each of these transaction types. Costs can add value to a business. For example, spent cash may be for additional inventory, new fixed assets or other items that bring value to the business. Expenses represent a one-time use of cash. Services from suppliers, utilities and advertising are common examples. Cash disbursement reports can separate these two, as they represent different aspects of cash use.

Benefits

  • Tracking cash is an important accounting task. Cash disbursement reports help a company ensure it does not pay too much cash for specific activities or projects. Accountants may also prepare a cash disbursement report that includes cash receipts. This benefits report users, as they can determine net cash inflows or cash outflows. Cash disbursement reports allow for a real-time review of cash spent on projects, allowing a company to make adjustments if necessary.

References

  • "Intermediate Accounting"; David Spiceland, et al.; 2007
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