Controlled disbursement is a type of banking service that makes it possible to review pending disbursements from a bank account and arrange assets so those disbursements are covered. The benefit of this type of service is that it makes it possible to house assets in accounts that bear the highest amount of interest until they are needed to cover those pending disbursements, then transfer the required amount when and as necessary. The end result is that more interest is earned on the funds, since they do not remain idle in an account where they earn little to nothing.
The concept of controlled disbursement makes it possible to take advantage of the float time that exists within most types of financial transactions. By strategically arranging when disbursements such as checks are presented for payment and clearance, it is possible to earn another day or two of interest on the funds that ultimately are used to honor those instruments. While this strategy is of limited use to individuals who are simply seeking to maintain a balanced budget, businesses can often utilize controlled disbursement in a manner that allows them to earn a significant amount of interest over the course of the calendar year, while still honoring all their obligations in a timely manner.
Along with making it possible to generate more interest on funds deposited with an institution, controlled disbursement can also function as a powerful tool to prevent fraud. Since part of the process requires a review of pending transactions before they are actually charged to an account, it is possible to identify any instruments that were not actually issued by the customer, and make arrangements to disallow those transactions. For example, if a check were presented for payment that was in fact a forgery, the corporate customer could issue instructions to not pay the instrument, while also advising the bank that the instrument was fraudulent. This would allow the bank to initiate its own investigation, and involve local authorities when and as necessary.
With delayed or controlled disbursement, corporate customers enjoy a higher level of security that actually allows them to be more intimately involved in maintaining that security. At the same time, the approach also gives the customer one more tool that can be used to arrange assets to best advantage, and earn the highest return possible from those assets. Many banking institutions offer more than one type of controlled disbursement option, with some plans better suited to smaller businesses while others are ideal for large corporations.
