Cash Float

Definition

Cash in transit between accounts or between a company and its bank, where it technically belongs to neither for a brief period. The financial phenomenon accountants use to explain why the bank and the company's records disagree.

Example Usage

The $50K check we sent last Friday is in float, which is why the bank balance and accounting records are different.

Origin

Banking term referring to the time delay in check clearing

Fun Fact

Companies sometimes exploit float by timing check payments and deposits strategically to improve their apparent cash position

Source: Banking and Cash Management Standards

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