A large firm operating over a wide geographical area can speed up its collection by

The correct answer is Concentration banking

Key Points

•  Concentration banking: A financial institution that serves as the main bank for a certain organization is known as a concentration bank.

• Concentration banking is transferring of funds from a number of bank accounts into an investment account where it can be invested more profitably.

• The Concentration Banking setup is one that businesses utilize to collect or concentrate funds from all regional banks located in several regions into a single bank account.

• Banks usually use concentration accounts in order to make fund transfers, private banking transactions and foreign transactions more easier.

• Concentration accounts combine funds from multiple locations within one consolidated account.

• Some Functions of Concentration banking:
  • Increasing Collection
  • Reducing accounting errors
  • Quick/ timely information etc.

• A large firm operating over a wide geographical area can speed up its collection with the help of concentration banking.

Hence, the correct answer is Concentration banking.