 be you're paying people and you're paying people as the bills come in and you're paying them with electronic transfers is typically the easiest things these days because then you might be able to connect the bank feeds and use the bank feeds as they come in to just record the related expenses as you purchase things. That would mean that you're on a cash-based system but not only on a cash-based system you're actually even a step easier you're paying for everything as with electronic transfers as they happen as the bill comes in you just pay it you're not going to enter the bill as a bill in the system you're just going to pay it with an expense type form and this it looks like a check form here but you might not actually do a check but rather an electronic transfer. Now one of the reasons that's the easiest thing to do is because you could you could set up a system where you're reliant on the bank feeds meaning because it's an electronic transfer you don't have a big separation of time between when you actually write or make the payment and when the payment clears the bank and and therefore because we feel pretty secure about these transfers normally now we could take a step away from the full-service accounting system oftentimes and wait till it clears the bank and then record it in our books as it clears the bank that's the easiest thing to do it's not exactly the full-service accounting system because normally what you would want to do is when you make the payment you record it in our books with a check form or expense form and then we would use the bank feeds or the bank reconciliation to verify that we that we have paid it as a part of a reconciliation a double check but because we're pretty comfortable with the electronic transfers these days and because they're pretty close in a time frame we don't have outstanding items to for the most part then you can that would be the easiest thing that that can be done now obviously a lot of small businesses are able to do that but some businesses might not be able to do that possibly because they're tracking their accounts payable or possibly because they're using checks if you actually use physical checks you might still be on a cashed based system but you might like the idea of actually you know writing the checks and be able to track the check numbers and whatnot and you might not be as comfortable yet with the electronic transfers even though everything's basic clears the bank before you enter the check into the system because if I write a check today it might not clear for like a month because it has to actually go in the mail to somebody else they have to deposit it it has to clear the bank and then it's going to come through if you have the bank feeds connected and you can record it now the reason that's an issue is because when we're dealing with checks what we want to see is did we write the check and did the check clear there's two different questions so it's really important when we actually enter physical checks that we enter the check when we write the check so that if there's a question from the vendor about us paying them we can at least say hey look I wrote the check here it is in my system it didn't clear maybe it got lost in the mail or whatever happened at that point in time and so we have to actually enter the check before it clears the bank to do that so again if you have the electronic transfers because the transfer happens within you know one to three days we don't have that big gap between when we enter the the check and when it clears so that so those are the cashed based systems now some sometimes the company is gonna well the other thing you could do is you could still be on somewhat of a cashed based system you might think of it as a cashed based system but you're paying with a credit card which means you're you still have a liability you'll actually pay it with out of your checking account but you're paying it with the credit card and the reason that's a similar process is because the credit card can also be connected with the bank feeds so you're still in a situation where if a bill comes in and you pay it with a credit card because it's an electronic transfer and because you can connect the bank to the to QuickBooks we can wait till it comes through on the bank feeds and just record that transaction as it clears the bank feeds once again so that is a fairly easy process to do now sometimes people will have to deviate from a cashed based system all together and then they're gonna be entering a bill form now usually this happens when you get to a larger type of companies most small companies they're gonna be they're gonna be paying their expenses as they come do either with checks or credit cards right but even small companies might end up where they want to enter the bill when it comes in and then track it and then pay it as late as possible the reason this becomes very important in large companies is because of the volume of transactions and the size of transactions means that cash management becomes more and more important in other words if you got your utility bill today and it was like $70 or something and you paid it today instead of 15 days from today when the due date was not a big deal although from a cash management standpoint you would say hey look I would like to pay it as late as possible because I want to hold on to my money as long as possible because theoretically the longer I hold on to my money the more cash flow benefit I have the more I'm able to make interest on it and so on that's just the general best practices however if it's only $70 and it's only one transaction you only have a few transactions it's not that big of a deal to pay it today versus 15 days from today whatever but if you're talking about thousands of transactions a day that are $70 or whatever or if you're talking about less transactions that are much bigger dollar amounts there's $7,000 transactions instead of $70 transactions that 15 days becomes important for cash flow so that's why accounts payable becomes a really important thing so that you can try to hold on to your money as long as possible by entering the bill into the system