Question

Why isn't human resources a department that is typically involved in the cash disbursment process?

Answer 1

In order for a Company's long run and for Funds to use in Investments, company should maintain higher Cash or Bank balance. To achive this objective company should maintain a balance in between it's collection and Disbursement (Higher collection and lower Disbursement) to make sure that enough liquid cash is available for expansion and Investment.

There will be several factors which will affect the collection process like Checks clearance time, Customer payment issues and others which will lag the collection process, If company can't collect the money from customers in time there will be shortage of cash in company's hand to invest which will affect the company's profit and will have negative affect toward company's goal. Cash managers should be aware of the collection and disbursement policies in order to achieve the cash management system.

Finance team needs to plan on collecting the cash from customers as soon as Sales happen and has to maintain a delay in Disbursement of payment. So collection and payment needs to be done by a particular Finance department (Centralised) which can achive these objectives. So obviously cash disbursement will not be given to Human Resource department as it will not have any connection related to cash management.