 Revenue side of things. Now in the revenue side of things, it's quite possible that a small business is doing a cash-based system for the expense side, but are forced to do it and a cruel thing for the revenue side because of the industry that they are in. So let's talk about the easiest to the most difficult on the revenue side of things to do your books with just the bank feeds. The easiest system you get paid by like YouTube or like any other kind of platform where they just pay you money. You're not dealing with inventory or anything like that. You just have services that you provide or something and they pay you money. In that case, the bank feeds will work quite well because you can just wait till you get the money, record it with the bank feeds and use basically the deposit form, which is the form used when you increase the checking account through the bank feeds to record the income at that point in time. You're going to lose a little bit of detail in your reports that way because the deposit form is not used in a full-service accounting system to record income. The sales and invoice forms are used to do that. So you lose a little bit of detail in the sub reports tracking the sales by customer, tracking the sales by item that you're selling. But the ease of doing that if you're in that kind of system is often worth it and you can set that up. So that's once again a step away from a cash-based system to one that's dependent on the bank. You're not doing a full accrual. You're not doing a full accounting, not even a full cash-based system. You're just constructing your books from the bank. And then a step away from that to a cash-based system would be one where you have like a cash register, for example. So if I have a cash register, now I'm getting the money. I can't really wait. I could, you could imagine, you could say, well, if I have a cash register, I can get the money. Even if it was cash, and then I could go to the bank and deposit the money, wait till it clears the bank, and then use the bank feeds to record my revenue. You could do that, but most people that are at a cash register don't want to do that because they want the internal controls of being able to record the sale with a sales receipt, generally, at the cash register and then be able to count the cash, for example, and try to compare the counting of the cash to the amount that they actually have recorded in sales as an internal control. And then they're going to deposit it in the bank, grouping together all the cash deposits together, and they want, they want the amount that's going into the bank to tie up to what's in the system. So usually, in that kind of system, you're going to use the bank feeds to double check the deposit that you have already entered into the system. Now, you can also imagine the bank feeds like matching up to the sales receipt. You could have the sales receipt that goes directly into the checking account or, but we'll talk some about those options. But the most common option would be you enter the sales receipt, you make the deposit, and then you use the bank feeds to match as part of the bank reconciliation process. All right, then you might have to go from a cruel standpoint, in which case you would actually create an invoice. That would be something like a landscaping firm, a bookkeeping firm, a law firm, where we have to do the work first, and then we invoice the client, and then we have to track the accounts receivable to make sure that we're getting the payment. Like with the bill form, the accounts receivable isn't a cruel thing. We've departed from a cash-based system. Therefore, of course, the bank feeds can't enter a transaction for an invoice because there's no cash involved for it. So in that case, of course, we'll have to do the work, enter the invoice, and then again, you could imagine like you wait till the customer pays you. And if they pay you, when they pay you, then you try to match the deposit to the invoice to record the transaction. But most of the time, what's going to happen is you're going to invoice, then you're going to receive the payment from your client. You're going to record a received payment, lowering accounts receivable, the other side possibly going into the checking account or possibly into undeposited funds, and then you make the deposit and then you use the bank feeds to double check that the deposit is correct, which is part of a reconciliation process. So we'll talk more about some different options you can do. You can do there, but that's the general idea with those. Now, if you have inventory, that also confuses things because inventory usually forces you to step away from a cashed based system. So if you have inventory, you could imagine you try to stay in a cashed based system with inventory. And you might just say, when I buy inventory, I'll wait till it clears the bank and I'll just record it to the expense account of cost of goods sold. And then, and that's how I'll deal with the inventory. And then when I make the sales, I'll just record the sales side of things with a deposit account or something like that. But most of the time, if you have a significant amount of inventory on hand, you can't do that because the tax code might stop you from doing that. And you want to track the inventory as an asset because it's significant and then record it as an expense when you consume the inventory, when you sell it in order to generate revenue. And that's in a cruel type of thing, which kind of messes up the bank fees. There's a couple of ways you can do that. You can do a periodic type of system, tracking the inventory in an Excel sheet outside of the system and then making periodic adjustments. Or you can do the perpetual inventory system where you track inventory in units on a sub ledger inside the system. If you, and if you do that, then you're forced to use the invoices and the sales receipts when you record sales, because those are going to allow you to kind of track the sale of the inventory. You can't just record it with a deposit. So we'll talk more about the inventory, how that can complicate things going forward. And then with the employee E cycle or payroll cycle, you, if you, there's two ways you can do the payroll. One, you can turn on payroll within QuickBooks and track it internally. Or two, you can hire a third party payroll provider to just do the payroll. You only entering the information necessary to get the financial statements correct. Now, if you hire a third party payroll provider outside of QuickBooks to run payroll, you might still be able to be basically in a cash to based system, because you can kind of wait till everything clears the bank and just record it as payroll expense in one account as it clears the bank. And then you can provide basically all the payroll reports from the third party provider to your, and your financial statements to your accountant, maybe at the end of the year, who can make any adjustments necessary as of that point in time, meaning making sure that you're making adjustments to make sure your accounts tie out to the W2s, the W3s, the 941s and the 940 on a periodic basis. So if you're trying to automate everything, then that might be the easier way to go, although you have to depend on a third party payroll provider to do that and trust them to do their job and pay them to do their job and to trust someone that knows how to do adjusting entries at the end of the period, a tax preparer or CPA firm to help out with that. Otherwise, if you're doing payroll within the system, payroll has these accrual components to it again. When you pay the payroll, you're going to have to have withholdings, which are going to increase the liability account so you can't just wait till the thing clears the bank. The bank feeds will fit in by basically double checking the checks that have been written, because you're going to have to actually write the checks using the payroll system and then write the checks for the liabilities using the little payroll system rather than waiting till it clears the bank. So you can use the bank feeds as a verification, as a type of bank reconciliation. All right, so that's the general idea. So for this practice problem, we're going to basically use the bank feeds to construct and try to think about our default as the easiest system. We're on the cash-based system. We're trying to construct our entire books from the bank feeds. But then we'll talk about where we deviate from that easy system. So we'll talk about the easiest way and then we'll go, okay, what if we had the sales receipt situation? What if we had an invoice and we'll add levels of complexity with a couple of examples.