Cash Management Managing Cash Inflow Reducing float can speed up cash receipts Transit float: time required for a check to clear through the banking system and become usable funds
Cash Management Managing Cash Inflow • Reducing Float can speed up cash receipts. • Transit float: time required for a check to clear through the banking system and become usable funds
Cash Management Managing Cash Inflow Reducing float can speed up cash receipts Transit float: time required for a check to clear through the banking system and become usable funds Disbursing float: occurs because funds are available in a firms bank account untilits payment check has cleared through the banking system
Cash Management Managing Cash Inflow • Reducing Float can speed up cash receipts. • Transit float: time required for a check to clear through the banking system and become usable funds. • Disbursing float: occurs because funds are available in a firm’s bank account until its payment check has cleared through the banking system
Cash Management Managing Cash Inflow Lockbox System Instead of mailing checks to the firm, customers mail checks to a nearby po Box A commercial bank collects and deposits the e checks
Cash Management Managing Cash Inflow • Lockbox System Instead of mailing checks to the firm, customers mail checks to a nearby P.O. Box. A commercial bank collects and deposits the checks