Disbursement float

Disbursement float

A decrease in book cash but no immediate change in bank cash, generated by checks written by the firm.

Disbursement Float

Money that a person or company has spent but that has not yet been taken out of one's bank account. A disbursement float occurs when a person or company writes a check; when the check is deposited, it usually takes a few days for the payment to clear. The disbursement float may be thought of as the difference between what is in one's bank account and what the bank shows to be in the account as the result of an uncleared check. See also: Net float, Collection float, Check hold.
References in periodicals archive ?
Such permission was rarely granted since the largest paying banks (and their business customers) would lose earnings on disbursement float if they agreed to have their customer accounts debited quickly via electronic methods rather than taking two to three (sometimes more) days to physically transport the original check to the paying bank for payment.
Exacerbating this problem, many paying banks offered (for a fee) to disburse checks for client firms from areas of the country that were difficult to get to in order for the firms to maximize the benefit of disbursement float this created.
In addition, Canada paid interest on transaction deposits (reducing the lost income from incurring float) and would charge firms for the disbursement float they created, inducing firms to disburse checks from places close to where payees were located (limiting remote disbursement and the disbursement float it created).