GUIDE TO YOUR GOLF EQUIPMENT

1
The difference between payments and
disbursements

• Disbursement Accounts Shipping Companies

2
What is a payment?

• How a payment is made will differ from contract
  to contract, but the result is the same. A
  payment is what is the agreed value of a product
  or service that a party provides in exchange for
  that product or service, and it is paid directly
  to the producer of that product or service.
• ForMore
• Disbursements Accounting
• Disbursement Accounts
• Disbursement Account
• Proforma Disbursement Account

3
What is a disbursement?

• As a business grows, not all purchases are direct
  deposits from one business to another. To best
  track the movement of cash flow, a business will
  set up accounts that hold a dedicated fund from
  which disbursements are made for payment of goods
  and services. There are also cash disbursements,
  which are typically used for customer
  reimbursement, operating expenses, and accounts
  receivable.
• ForMore
• Accounting For Shipping Company
• PDA Port Charges
• DA Shipping

4
Examples of disbursements

• For example, many real estate transactions use
  escrow accounts. A disbursement is a form of
  payment from a dedicated or third party account
  with the expectation that the amount is
  reimbursed. For example, lets say your business
  wants packaging labels with your logo on it. You
  order labels from a third party vendor that
  prints graphics onto labels. When you receive an
  invoice for your order, it includes a line item
  for blank rolls of labels. The third-party vendor
  you used initially sent a disbursement payment to
  another business that produces label rolls with
  the anticipation that your business will
  ultimately reimburse that amount when you pay
  your invoice. Disbursements are tracked in the
  general ledger by the bookkeeper.

5
How does a disbursement differ from a payment?

• Creating these outflow accounts from which
  disbursements are drawn is an important practice
  for monitoring cash flow. Unlike payments,
  disbursements are an indication of actual
  business activity and will help advise future
  financial decisions. When disbursements are made,
  it is important that very detailed information is
  recorded. The amount, the date, the payee, and
  the reason for the purchase or the intended use
  are all useful data points. If a disbursement
  account is low or negative at the end of a
  designated cycle it may be an indication of a
  disconnect between what is out-going and what is
  being invoiced. Not only can questions about
  labor rates or raw material quantities be
  assessed, but best practices for disbursement
  approvals can also be established.

6
Why does the distinction between payment and
disbursement matter?

• A disbursement is always a payment of some kind,
  but a payment is not always a disbursement.
  Understanding the distinction is important
  because different payments may be subject to fees
  like VAT or taxes. For example, a baker purchases
  flour and sugar, these items are tax exempt. Not
  only will tax be collected at the final sale to a
  market goer, the disbursement will also be
  reimbursed since the cost of raw materials is
  built into the cost of each pastry. However, the
  baker also needs a new spatula which will not be
  resold and is subject to tax at the time of
  purchase, this payment will be drawn from a
  different account. By differentiating where the
  cash flow is coming and going will help the baker
  report accurately come tax season.
• By understanding the difference between a
  disbursement and a payment, a business can best
  track what they do, and how they do it. Knowing
  that payments may be subject to fees prevents
  issues should an audit occur. And utilizing
  disbursement accounts helps to determine what to
  invoice for as well as informs future budgetary
  decisions. Taken together, a business is able to
  manage cash flow and monitor business health.

7
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