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Other banks concentration banking allows companies to take advantage of economies scale in cash management and investment. The purpose is get available funds to where they are needed to centralize payables which permits the financial manager to evaluate the payments coming due date this allows the company to have a pay schedule to transfer cash to meet the needs of a company...
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Controlling disbursements some companies use the Zero-Balance account, this account that has a zero balance on which disbursement checks are written. Some companies establish several zero-balance accounts in their concentration bank then funds Zero-balance accounts from master accounts. As checks are written on the account the money is pulled from the master account to pay disbursements the company may have...
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