National Check Professional (NCP) Certification Practice Test

What is one of the general benefits of controlled disbursement services?

1. Reduction in idle balances

2. Higher interest rates

3. Increased borrowing costs

4. Avoiding payment disputes

The correct answer is: Reduction in idle balances

Controlled disbursement services primarily aim to optimize cash management for businesses. One of the main benefits of these services is the reduction in idle balances. When a company uses controlled disbursement services, it gains the ability to manage its cash flows more effectively by knowing exactly when payments will be made. This allows the organization to minimize excess funds that would otherwise remain in non-interest bearing accounts, thereby freeing up capital for investment or other uses. While options such as higher interest rates or increased borrowing costs may impact a company's financial strategy, they do not directly relate to the primary function of controlled disbursement services. Additionally, avoiding payment disputes is important but does not capture the essence of controlled disbursement services, which focuses on cash management efficiency rather than dispute resolution.