DISBURSEMENT CYCLE

Cash/ Check Disbursement is the process in accounting which focuses on the payment of obligations
incurred by the company. A good Disbursement system ensures timely and correct payment amount,
and that only valid creditors receive the payment. System provides the list of due payables so that the
company can avail of any discounts for early payments, and does not lose its credits standing, or worse,
get a penalty.

Oceanic Container Lines, Inc., being one of the top shipping lines in the country, invested on having a
high-tech and efficient accounting system which includes its check disbursement system. Despite having
multiple branches in different regions, the company maintains control over its branches.

ACCOUNTS PAYABLE. No disbursements are made when there are no accounts or liabilities to pay.
Therefore, cash/ check disbursement process begins in the AP department where AP clerk, or in OCLI’s
case, their accountant Mrs. Bagao, inputs all the purchases and services availed and incurred on a daily
basis, or anytime needed.

SERVICES: Team leader, Mr. Roca, identifies what services are needed. He then asks for
quotations from various suppliers to provide options as to who can provide better service with better
charges. These quotations will be approved and signed by OIC, Mr. Mandia, or the BM, Mr.
Managbanag. A Job order will then be forwarded to the supplier. The service can now be availed and the
supplier bills out the company for the amount dues. Attached will be the SOA or Statement of Accounts
and the original copy of the Job Order. Upon receipt, Mrs. Bagao, processes the RFP or the Request for
Payment which will again be approved and signed by the OIC. Afterwards, an AP will be created thru the
company’s accounting system, ORACLE. AP processor, which has the account INVOICES, keeps the AP
journal entries or the payable transactions with respective details. An AP voucher will be printed and be
forwarded back to OIC with attached RFP, JO, and SOA. After review and sign, the voucher and its
attachments are kept to file for later use.

PURCHASES: Team leader, Mr. Roca, identifies the items or materials needed. He then looks for
supplier and put into a canvass form the amount for each item or material with signature of the
respective supplier or its representative. At least (3) three options are needed for better choices. The
canvass form will be forwarded to the AP clerk and will be processed thru ORACLE PO Processor. Any
purchases are for approval by the ASM or the Assets and Supplies Managements. A PO or Purchased
Order will then be printed to be forwarded to the chosen supplier. The item or material can now be
acquire and the supplier bill out the company for the amount dues. Attached will be the SOA or
Statement of Accounts and the original copy of the PO and a copy of the Charge Invoice. Upon receipt,
Mrs. Bagao, processes the RFP or the Request for Payment which will again be approved and signed by
the OIC. Afterwards, an AP will be created thru the company’s accounting system, ORACLE. AP
processor, which has the account INVOICES, keeps the AP journal entries or the payable transactions
with respective details. An AP voucher will be printed and be forwarded back to OIC with attached RFP,
JO, and SOA. After review and sign, the voucher and its attachments are kept to file for later use.
DISBURSEMENT. Any Accounts Payable due for payments is listed in the system. Mrs. Bagao will then
look for the documents approved for payment and kept earlier. Inside the ORACLE System, the AP
processor is opened to see the file. A Check Disbursement Voucher is printed and attached to RP,
Original Check, and (3) three more check copies. (1) one check copy is kept for file while others will be
forwarded to the OIC for review and signature. Then the Check disbursement voucher, original check,
and (1) check copy are given to the supplier. The RFP is kept for file. As the supplier receives the check,
he will sign on the voucher and on the check copy. These will now be forwarded back to the company
for file.

RECONCILIATION. To ensure that the company only disburse sufficient and exact amount, a bank to
book reconciliation is done. Bank Statement provides all the necessary transactions which will be used
to update the system. Mrs. Bagao, the Accountant, Opens the Oracle System and clicks the Bank
Statement and reconciliation. List of Available banks will appear and then the branch bank account is
chosen. After the details are transferred, it will then Auto –Reconcile the Bank to Book records. If
discrepancy occurs, the actual records and system records has to be reviewed until that particular
transaction labeled reconciled.

Estrada, JC
Nodalo, JA
Tadea, MRG