Cash Concentration and Disbursement (CCD)
Cash concentration and disbursement is a type of electronic funds transfer typically used to transfer funds among commercial business accounts. Usually integrated with invoicing systems, CCD can be involved when clarifying billing terms with customers, using an automated billing service to contact customers immediately, using electronic payment processing for collection purposes, and staying on top of collections with an aging receivables report. The National Automated Clearing House Association (NACHA) developed cash concentration and disbursement to facilitate electronic transfers for corporations as well as to help provide for an integrated invoicing system with business partners. In terms of payables in general, payable management solutions involving CCD typically facilitate direct payroll deposits, electronic payment processing for expenses, and a variety of disbursement controls. For small and mid-sized business managers in particular, CCD can reduce the need for high-interest credit, also helping them potentially expand while keeping their cash management in control.
What Is Cash Concentration and Disbursement (CCD)?
Cash concentration and disbursement is a type of electronic funds transfer typically used to transfer funds among commercial business accounts. Funds can be consolidated from various locations and so-called concentrated into a single collection account. Funds can also be quickly and easily disbursed to intra-accounts, vendors, or accounts payable entities. The National Automated Clearing House Association (NACHA) developed cash concentration and disbursement to facilitate electronic transfers for corporations as well as to help provide for an integrated invoicing system with business partners. CCD supports rapid, secure transactions. Disbursements can clear overnight through the Automated Clearing House (ACH) system.
Understanding Cash Concentration and Disbursement
Cash concentration and disbursement can be a key component in a company’s accounting department. CCD is a corporate tool that companies can use for bill payment, bill collection, and cash account balance consolidation. The use of CCD can be useful for several reasons. Overnight payments can ease cash flow burdens, helping accountants disburse payments more quickly and easily than standard payment methods. Incoming payments can be accessed more quickly for immediate use. CCD can reduce the need to hold higher levels of cash and working capital, potentially putting money to work in other areas. CCD may create a lower demand for credit, which leads to money saved on interest expenses.
CCD is often an option available for corporate clients through a bank. Banks may offer different terms and conditions, with some banks also offering interest on balances. Online banking also helps to create new opportunities for smaller businesses to access large-scale cash management technologies.
With CCD, cash can be concentrated from various business locations and banking accounts. Cash may be moved throughout the day and then disbursed for bill payment overnight.
Special Considerations and Applications
CCD is a tool that is usually integrateable with multiple aspects of a company’s recordkeeping. Different types of software systems, including all types of Treasury software and Intuit QuickBooks, are usually compatible with CCD. These systems may also involve CCD coding and modeling, which can help improve efficiency. Typically, CCD will also be integrated into an invoicing system.
CCD entries are one form of managing time-sensitive cash transactions related to receivables. Usually integrated with invoicing systems, CCD can be involved when clarifying billing terms with customers, using an automated billing service to contact customers immediately, using electronic payment processing for collection purposes, and staying on top of collections with an aging receivables report.
In terms of payables in general, payable management solutions involving CCD typically facilitate direct payroll deposits, electronic payment processing for expenses, and a variety of disbursement controls.
CCD and CCD+
Related terms:
Accounts Payable (AP)
"Accounts payable" (AP) refers to an account within the general ledger representing a company's obligation to pay off a short-term debt to its creditors or suppliers. read more
Accounts Receivable (AR) & Example
Accounts receivable is the balance of money due to a firm for goods or services delivered or used but not yet paid for by customers. read more
Automated Clearing House (ACH)
The Automated Clearing House Network (ACH) is an electronic funds-transfer system run by NACHA, formerly the National Automated Clearing House Association. read more
Batch Header Record
A batch header record is a standard record of information regarding the transfer of a group of data (a batch), usually within the banking field. read more
Cash Management
Cash management is the process of managing cash inflows and outflows. Cash monitoring is needed by both individuals and businesses for financial stability. read more
Cash
Cash is legal tender or coins that can be used to exchange goods, debt, or services. Cash in its physical form is the simplest, most broadly accepted and reliable form of payment. read more
Checking Account
A checking account is a deposit account held at a financial institution that allows deposits and withdrawals. Checking accounts are very liquid and can be accessed using checks, automated teller machines, and electronic debits, among other methods. read more
Corporate Trade Exchange (CTX)
The corporate trade exchange (CTX) is a money transfer system used by businesses and government agencies to make recurring payments. read more
Descriptive Statement
A descriptive statement is a bank statement that lists deposits, withdrawals, service fees, and other such transactions in chronological order. read more
Disbursement
Disbursement is the act of paying out or disbursing money, which can include money paid out for a loan, to run a business, or as dividend payments. read more