Efficient funds management attempts to reduce mailing and clearing time.Two methods do this by:

Question

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Moving collections and deposits closer together in concentration banks reduces the time it takes for checks to clear. Wire transfers allow for quick movement of surplus funds, reducing the time and cost associated with mailing physical checks. Option B involves cross-country mailing, which would increase the mailing time, and depository drafts still require physical transportation of funds. Option C involves drawing checks against zero balance accounts, which may lead to overdraft fees and is not an efficient use of funds. Option D involves wiring funds to zero balance accounts, which is efficient, but using lockboxes in many cities may not be cost-effective.

Efficient Funds Management Attempts to Reduce Mailing and Clearing Time