The cash management practice of remote

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Unformatted text preview: float”—the time between when checks were issued and when the funds were deducted from their accounts. In reply, the particular bank justifiably insisted there was more to the story, noting its expertise in processing many small-dollar checks. The cash management practice of “remote disbursing”—writing checks on banks located in geographically isolated locations to take advantage of the difficulty of presenting checks to them in a timely manner was common before the Federal Reserve issued wire transfer An electronic communication that, via bookkeeping entries, removes funds from the payer’s bank and deposits them in the payee’s bank. Working Capital and Current Assets Management a policy statement in 1979 to discourage the practice. Cash managers overlooked the fact that putting money in one’s own pocket took it out of someone else’s. E.F. Hutton, at the time one of the most prominent stock brokers in the United States, took advantage of banks’ inability to track deposits and transfers and gained interest-free use of multipl...
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This document was uploaded on 01/19/2014.

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