Disbursement vs. Expense: What’s the Difference?
While often used interchangeably, disbursements and expenses aren't the same. A disbursement is any outgoing payment, while an expense is a cost recorded on the income statement. For example, buying equipment is an expense, but the actual payment is a disbursement. Understanding this distinction is vital for accurate financial reports. Properly labeling both can improve budgeting, support clearer profit analysis, and ensure better decision-making. Don’t mix the two—your accounting accuracy depends on it.