CASH DISBURSEMENT CYCLE
Step
Business activity
s
Vendor invoice and
remittance advice received
by purchasing. Remittance
Advice separated and
filed. While, invoice
together with purchase
order and approved
1 payment. The purchased
order marked as closed.
The approval is distributed
to Accounts Payable.
2 Upon receipt of a payment
voucher with an approved
vendor invoice, the
withdrawal issues a check
and sends it to the
Purchasing Department.
Embedded control Forms risk information
To ensure that the Vendor Invoice, The vendors will not Remittance Advice is a proof
received goods by Remittance Advice, be receiving their of payment document sent by
the vendor are on Purchase Order, Approved goods on time. a customer to a business. It is
time. And the Payment (Closed, to inform the business if the
purchasing can fill approval) invoice has been paid.
orders partially.
Vendor Invoice is a document
listing the amount owed to
supplier by the receipt. It
includes the amount owed,
sales taxes freight and
delivery charges, the date
which payment should be
made and where to send the
payment.
Ensure that One (1) copy of an Tampered, Ways of approving a vendor
payments are not approved vendor invoice. collusion, invoice are Checking the
made until the goods duplications, Invoice for Accuracy, Cross-
are actually overpayments due to Reference Invoice Dates,
received. a variety of reasons. Confirm the Work with the
Project Manager, Check the
Vendor Details, Record the
Invoice Date, Schedule a
Payment, Streamline Decision
Making, Save Money and
Maintain Good Vendor

When the treasurer in the
Cash Disbursement
Department receives the
payment voucher with the
approved vendor invoices,
the treasurer will now
3
issue a check and forward
it to the Purchasing
Department.
Upon receiving the checks
from the treasurer, the
Purchasing Department
will now send it to the
vendor along with the
4 remittance advice.
5 A check was prepared by
cash disbursement it
registered all checks
issued during the day and
posts a journal entry to the
cash disbursement journal.
Relationships
The reason is to Check The details on the The treasurer will now further
ensure that payments payment voucher analyze the payment voucher
are made only if and the approved and the approved vendor's
there is a legit good vendor invoices invoices if the two match
that has been might not match that before authorizing and issuing
received. will result in a check.
communication this
further to the other
departments
responsible that will
cause delay in
releasing the checks.
This will now settle The checks might be The Checks sent by the
the obligation to the delayed to be treasurer to the Purchasing
vendor. received by the Department will not clear out
purchasing the obligation to the vendor.
department because This check needs to be
of internal conflict personally handed to the
or the vendor has vendor or other ways as long
other ways to as the vendor agrees.
receive the payment
that the company
doesn’t honor.
The cash requested checks, cash disbursement Records and Cash disbursement journal is a
journal is updated journal information record of all of your
for the total of recorded in cash business’s outflowing cash.
checks requested. disbursement journal By itemizing all cash
were not adequately payments, this journal helps
and properly businesses organize their
recorded. outgoing cash records.
Cash disbursement journals
should include:
 -Date
- Payee name
- Amount debited or credited
-Accounts involved (e.g.,
payment method)
-Purpose of the transaction
The check register is also When the AR and Copy of cash disbursement -Incorrect amount The cash disbursements clerk
sent to General Ledger, GL files are updated Journal and AP file. recorded in cash compares the checks to the
where the total is entered separately, they disbursement transaction list and presents
into the GL file. provide an extra journal. (Check the negotiable portion of the
register)
accounting control checks to management for
6 when they are signature.
reconciled on a
regular basis. -Unequal amount for
closed accounts
payable and cash
disbursement (It
should be equal)
VENDOR INVOICE
REMITTANCE ADVICE
PURCHASE ORDER
APPROVED PAYMENT FILE
DISBUESEMENT CHECK
CASH DISBURSEMENT JOURNAL