Final answer:
Firms decrease float for receipts by using electronic payment systems like ACH, lockbox banking, remote deposit capture, strategic banking relationships, wire transfers, and treasury management systems to speed up the process and availability of funds.
Step-by-step explanation:
Firms attempt to decrease float for receipts by implementing several strategies that aim to reduce the time between when a check is issued and when the funds are available in the firm's bank account. They might use electronic payment systems such as automated clearing house (ACH) transactions, which process payments faster than traditional check processing.
Another strategy is lockbox banking, where payments are sent to a post office box that is accessed by the bank, speeding up the collection process. Additionally, remote deposit capture allows firms to deposit checks electronically without having to physically transport them to the bank. Companies may also establish banking relationships in strategic locations to reduce mail float or use wire transfers for immediate fund availability. To optimize these processes, treasury management systems can be used to streamline operations and provide better visibility into cash flows.