Glossary Terms


Reviewed by Melissa Cook
Updated December 19, 2022

Disbursement refers to the distribution of funds, usually by a group or organization. For example, a government may disburse grants or loans to individuals or businesses in need of support. Disbursement can also refer to an organization’s own expenses. For example, when deciding on how much money it will spend in a given month, a company may separate its expenditures into categories such as payroll, benefits and perks for employees, and “miscellaneous” expenses for office supplies and other items.

In general, disbursement is the process of applying funds that have been collected from various sources. It is an important part of maintaining financial stability and ensuring that organizations can continue meeting their goals over time. When done properly, disbursement can help support a variety of activities that ultimately benefit society as a whole.

Disbursement is an essential part of the financial system, and it plays an important role in helping organizations manage their resources. Whether you are receiving funds or paying out money to others, it’s important to understand how disbursements work and what they mean for your organization. By doing so, you can ensure that your finances are managed efficiently and effectively over time.​

The term “disbursement” refers to the distribution of funds from an organization or group to individuals or other entities. This typically involves a transfer of cash or some other form of currency, such as a loan or grant. For example, when a government implements social programs like welfare or unemployment benefits, it may disburse payments to individuals or families in need. Disbursement can also be used to describe an organization’s own expenses. For example, a company may allocate money for payroll, supplies and other costs by dividing its expenditures into specific categories.

There are many different reasons why organizations may make disbursements. In some cases, they may provide funds to support individuals or groups that need assistance with basic needs like housing or food. In other situations, a business might use disbursement as a way of allocating resources such as office supplies and equipment to employees. Regardless of the purpose, however, it is important for organizations to have a clear understanding of how to make safe and effective disbursements in order to ensure financial stability and support their ongoing activities.

If you are involved in the process of making disbursements, it is important to understand the principles and best practices that guide this activity. You may also need to learn about various tax regulations and compliance requirements that apply to different types of disbursements. By gaining a deeper understanding of how disbursement works, you can help ensure that your organization’s financial resources are effectively managed over time.​

Whether you are a manager or an individual receiving funds from an organization, it is important to understand the basic principles and best practices associated with disbursement. By doing so, you can feel confident in the decisions that you make regarding your own financial resources, as well as those of your organization. Some key considerations when making disbursements include:

  1. Understanding the purpose of disbursements within your organization or group. This may involve reviewing financial records or researching relevant tax regulations in order to determine what types of expenditures are permitted by law.
  2. Maintaining accurate documentation for each disbursement. This can include records of payments made to individuals or internal operations, as well as documentation related to tax filings and compliance requirements.
  3. Reviewing the financial stability of your organization or group on a regular basis. This may involve looking at revenue streams and expenses over time to identify any areas where changes may be needed in order to ensure optimal performance going forward.
  4. Consulting with experts when needed in order to gain a deeper understanding of disbursements and how they work within your organization or group. This may include seeking guidance from a financial advisor, accountant, or other professional who has experience working in this area.​

With so many organizations relying on disbursement funds to fulfill their mission and support those who rely on them, it is important to understand how disbursement works and how it can be effectively managed. By taking the time to review relevant tax laws, regulatory requirements, and financial data, you can feel confident in your decisions related to disbursements, whether as an individual receiving funds or an employee responsible for making these payments. With some basic knowledge and guidance from experts when needed, you can help ensure that your organization’s finances are managed wisely over time.​

Contact an Americor professional today for questions with financial assistance.