Q1: Explain in detail the different ways companies use to speed up

their cash collections (receipts) now a days.

CASH COLLECTION:
Collection of cash from individual or industry from which you have to
issue invoice/recipient.

WAYS TO SPEED UP CASH COLLECTION:

1. Ecommerce:

An online shopping cart can assist customers with serving themselves

and care about their clients by serving best services. The present internet
shopping cart can deal with one-time installments, repeating installments,
and variable bills. The best of them offer an entryway for customers to
refresh their own MasterCard expiry dates, react to declined card
messages, and serve themselves.
1.1 Bank transfer:
If the customer send the money to the company via online banking they
received the transaction placed within 24 hours.
1.2 E-wallets:
E-wallets require for customer and merchants to create an account and
then they can deposit and withdraw the cash at anytime, anywhere.
1.2.1 PayPal:
PayPal is kind of E-wallet in which the both customer and merchant both
Deposit and withdraw cash from PayPal accounts separately from their
own individual accounts.
1.3 Crypto currency:
Crypto currencies are also called as plastic and digital money gaining
interest as a payment method for online transaction.
1.3.1 BitCoin:
It is newest and exciting financial instrument in which your transactions
place digitally. The transactions place fast in it but it is not widely used
now a days as people are not aware about this mostly. It is the great
opinion for any e-commerce business in the tech sector.
 2. Card on file:

It is for long time clients so it makes sense to set up automatic approval

per month by having their card on file. The clients who are long term and
are busy will appreciate the time saving while using this method.

3. Stream line your time and billing system:

The way in which you will pay faster, you can collect faster. When
you've decided your bottlenecks, you can make a move to dispose of
them.
3.1 Make it easy for everyone:
If the system will be complicated for billing the customers will attract
towards it will be least but if you’ll make your system easy to use many
clients will buy this opportunity and customers will make an honest effort
to maintain accuracy.

4. Increases cash payment choices:

If your client is from abroad, being able for easily transactions transfer
and deposit will become easy and simple client does not have to maintain
their accounts according to your country’s currency.
 Credit cards
 PayPal
 Wire transfers
 Cloud-based bill payments
Q2: Explain in detail the different ways companies use to stretch
out their disbursements (payments) in recent times.
There are several ways in which companies can slow disbursements and keep
funds in for longer period of time.
1. Zero Balance Account (ZBA):

Zero balance account is disbursement account (ZBA) which most of the

companies have set up to use disbursement more effectively and efficiently.
 ZBA are used by large business or firms it is not for consumer use. It
provides centralized place for the company’s funds. By concentrating all the
funds in zero balance account (ZBA) more money will be available for
investments rather than have subaccounts. The firm deposits money to cover
checks drawn on the account only as they are presented for payment each
day.

2. Cash expenditures:

Implies all payment of money during a predetermined Fiscal Year (other

than circulations to Partners), including, without constraint, installment of
working costs, installment of head and enthusiasm on any Partnership
obligation (other than installments of head and enthusiasm on any
Subordinated Loans or Voluntary Loans), the expense of fixes to the
Apartment Complex, sums distributed to saves by the General Partner and
the installment of any charges other than the Asset Management Fee, the
Partnership Management Fee and the Development Fee. What's more, the
net increment during such Fiscal Year in any escrow record or hold kept up
by or for the Partnership will be viewed as a Cash Expenditure during such
Fiscal Year. The term Cash Expenditures will exclude Development Costs.
Money Expenditures payable to Partners or Affiliates of Partners will be
paid after Cash Expenditures payable to outsiders.

3. Drafts:

The drafts is just like as check. The production of a draft, reserves are
expelled quickly from the financing account. At the point when a draft is a
payable-through, it recognizes a bank. This bank is the collection point for
the funds to fulfill a bill or agreement. Then again, drafts can be payable-at,
which implies they should introduce at the recorded bank for installment.
The repayment of money for future, alternatives, and different securities
may utilize a PTD procedure. Often, these transactions occur a ways off
from the parties in question and are for considerable amount of cash. Drafts
give security that cash is available to the firm.
Q3: What is cash concentration? Discuss in detail the different
ways of cash concentration used by the companies.
Cash concentration:
The process in which firm used to bring lock box and other deposits together
into one bank and this process is often called as concentration bank.
Ways of Cash Concentration used by companies:
1. Depository transfer check (DTC):

Unsigned checks drawn from one of the company account and deposited into
another bank account are known as depository transfer check (DTC).
Information is moved by a third-party information service from every
location, from which DTCs are made for each deposit location. This data is
then gone into the registration framework at the destination bank for deposit.
Companies used DTCs to collect revenue from different locations, and then
are deposited in a specific bank or any other institution. DTCs are drawn on
lock box or other collecting bank accounts.

2. Automated clearing house transfer (ACH):

A preauthorized electronic withdrawal from the payer’s account known as

(ACH). This payments system is used with payroll, direct deposit, tax
refunds and customer bills. An ACH settles accounts among participating
banks. ACH transfers clear in 1 day that is why it provides benefits over a
DTC. However both banks in the ACH transfer must be a member of a
clearing house.

3. Wire transfer:

It is an electronic communication that transfer a funds electronically across a

network of banks via bookkeeping entries, remove funds from the payer’s
bank and deposit them in the payee’s bank. Wire transfer can eliminate mail
and clearing float and it may also reduce the processing float. Wire transfer
is most expensive then DTC and ACH.
 Collection float:
Total time between the mailing of check by the customer and
availability of cash to the receiving firm.