What is a disbursement?
- By Book Keeping Pros
- Sources checked 15 Oct 2026
Definition
A disbursement is money a business pays out, by any method, for any purpose. Paying a supplier's bill, buying equipment, repaying a loan and transferring drawings to the owner are all disbursements, so the term is wider than an expense: it describes cash leaving the business, whatever that cash was used for.
Many bookkeeping systems keep disbursements together in a payments journal or on the payments side of a cash book, listing the date, who was paid, how much and the account each payment belongs to. That account is not always an expense: the principal part of a loan repayment reduces the loan, and money the owner takes for personal use is drawings.
Some service businesses also use the word for costs they pay on a client's behalf, such as search or filing fees, and then pass on to that client. Those payments need to be tracked against each client so that none is missed when the client is invoiced.
In Australia
business.gov.au's glossary defines disbursements simply as money a business spends. Its cash flow statement template uses cash outgoing for any payment the business makes, with examples including advertising and marketing, purchases, rent and rates, and utilities.
Its record keeping guidance counts bank records, and records of every business expense down to cash purchases, among what a business has to keep, and sets 5 years as the usual period for keeping most of them.
Worked example
| Date | Paid to | Account | Amount (AUD) |
|---|---|---|---|
| 2 Mar 2026 | Landlord | Rent | 2,200.00 |
| 3 Mar 2026 | Packaging supplier | Accounts payable | 640.00 |
| 4 Mar 2026 | Bank | Equipment loan and loan interest | 1,150.00 |
| 5 Mar 2026 | Owner | Drawings | 1,000.00 |
| 6 Mar 2026 | Electricity retailer | Utilities | 385.00 |
| Total paid out | 5,375.00 |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Posting every payment to an expense account, including the owner's drawings and the part of each loan repayment that reduces the loan.
- Making cash payments without keeping a receipt or a note of what each one was for.
- Losing track of costs paid for a client that should have been added to the client's invoice.
Related terms
Related service
Accounts payable and receivable
Bills and invoices tracked, with you approving every payment.
Sources
- Key financial terms
business.gov.au, Australian Government. Current at 15 October 2026, released 9 July 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.
- Set up a cash flow statement
business.gov.au, Australian Government. Current at 15 October 2026, released 22 May 2025. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.
- Record keeping
business.gov.au, Australian Government. Current at 15 October 2026, released 7 November 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.