Availability Float

Availability float is another banking terminology that can be useful for the accounting functions and accounting concepts. Availability float can be defined as the time period that exists between when the amount is deposited and when it is actually available in the account in which it is deposited. The concept of the Availability float is specifically related to the check deposits within the banks. The availability float exists because there is a short physical time in the process where the checked is received by the bank, analyzed and processed by the bank and then after completing this process the funds are release to the account. This means that the person who has deposited the amount in the bank has to wait until the entire process is completed and the funds actually physically loaded in his or her account. The time required to complete this process starts from the moment the check is deposited and ends when the actual amount is transferred to the account and this time interval is called as availability float.

Most of the companies who want to remove this availability float prefer to move to the electronic fund system and electronic fund transfer. The electronic fund transfer procedure reduces the reliance on the bank transfer speed for the procedure of transferring money physically to the account. Another concept of float also exists that is called as payment float and the difference between the availability float and the payment float is called as the net float.

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