Disbursement

A disbursement is the act of paying out money, usually from a fund or account. It represents the actual release or distribution of funds, often in accordance with a pre-determined plan or agreement. Disbursements can range in size from small petty cash expenditures to large-scale investments. The process often involves authorization, record-keeping, and confirmation of the payment. Accurate accounting of all disbursements is crucial for financial management, budgeting, and auditing purposes. Effective management includes planning, authorization, and verification, as well as a robust system for documentation.

Disbursement meaning with examples

• The company's finance department meticulously tracked every disbursement made during the fiscal year. Each payment, from employee salaries to supplier invoices, was recorded to maintain accurate financial records, and the detailed system ensured transparency and accountability. The tracking provided valuable insights into spending patterns and informed budgeting decisions for the subsequent year, facilitating better financial planning.
• Following the successful grant application, the foundation announced the first disbursement of funds to the research team. This initial disbursement enabled the team to purchase necessary equipment and initiate their project's preliminary stages. The subsequent disbursements would be contingent on meeting pre-determined milestones.
• Before making any major disbursement from the trust fund, the trustee had to obtain approval from the beneficiaries. This measure ensured that all financial transactions were conducted ethically and in the best interests of all parties involved, and it reduced risk of any financial misconduct.
• The government's COVID-19 relief package included provisions for direct disbursements to businesses and individuals impacted by the pandemic. These funds provided crucial financial support, helping to keep businesses afloat and support households during a challenging economic period. They were crucial to the fiscal recovery.
• The loan agreement stipulated a schedule of disbursements, tied to the completion of specific project phases. The lender would release funds to the borrower incrementally, verifying each stage's progress. This process mitigated risk for the lender and ensured that the project progressed as planned.