To pay a bill the traditional way, you have to write out a check, record it in your checkbook, subtract, put the check in the envelope (without obscuring the little address window), add your return address, and find a stamp, then a mailbox. But this year 40 million Americans are expected to pay their bills on the Internet, clicking mice instead of licking envelopes. That's a 38 percent increase over last year, thanks in large part to how easy the new technology has made the dreaded task.

Generally, here's how it works: Money is transferred directly from your bank account to that of, say, your electric company or mortgage holder. Encryption technology, which scrambles data so they can't be read while en route in cyberspace, ensures that the process is secure. Most banks let you pay 15 bills a month for less than $5, and many charge nothing. Here's how to pay bills on-line and avoid all the painstaking paperwork.

PICKING A SERVICE
If you're just starting or want a simple plan.
BANKS
The first place to look is the bank where you have your checking account. Make sure it offers a timeliness guarantee so that as long as you put in your payment requests on time, the bank takes responsibility for any late fees. Two free and easy-to-use sites that allow accounts to be set up on-line from any state are:

BANK OF AMERICA (www.bankofamerica.com).

CITIBANK (www.citibank.com).

If you want to expand your on-line banking.
PAYMENT SERVICES
Another option is an on-line bill-paying service, which you authorize to withdraw money from your bank account to pay creditors. Two we like are offered by Yahoo! and Paytrust.

YAHOO! BILL PAY (finance.yahoo.com) offers a free service that allows unlimited payments, but only to the more than 100 large companies on the service's list. The Premium Plan, which includes more than 200 companies, costs $5 a month for 12 payments and 40 cents for each extra one.

PAYTRUST (www.paytrust.com) lets you receive all your bills electronically, whether or not the company you owe sends them via e-mail. You just have all your bills redirected to Paytrust, and it e-mails them to you. The service costs $5 a month plus 50 cents per transaction, or $13 for 30 transactions a month plus 50 cents per transaction if you go over that limit.

If you want to move all your bookkeeping on-line.
SOFTWARE SYSTEMS
Computer software packages, used in conjunction with the software makers' websites, may be the best option for folks who want to keep all their financial records on the computer in addition to handling bills there. Quicken and Microsoft Money enable you to coordinate monthly bill paying with end-of-year tax calculations.

MSN BILL PAY (www.billpay.msn.com) lets you put your bills on a calendar and have them paid automatically. If you buy the Microsoft Money 2004 Premium software program, you get two free years of bill paying (up to 15 transactions a month). The standard fee is $3 for unlimited payments to a list of 900 billers. If you have payees that aren't on that list, the fee goes up to $6 a month.

QUICKEN BILL PAY (www.intuit.com) costs $10 a month but allows users to make payments from up to 10 different bank accounts. Users are allowed 20 transactions a month. Each block of five additional transactions costs $2.50.

GETTING STARTED
First, locate the website of your bank or an on-line bill-paying service (see Picking a Service, above, for options) and register. Then, for each creditor you wish to pay on-line, you will be asked to enter your account number and possibly the creditor's address. Mercifully, you enter this information only once for each payee.
Each month, take your stack of bills to the computer, return to the website, scroll the list, and type in how much you want sent to each company and when. Aim to schedule payment a few days before each bill is due to make sure you don't incur any late charges. (Payments typically clear in one to three days, but to be safe, allow four.) When you've entered all the amounts and dates, click Send.

OTHER WAYS TO PAY BILLS
Even if you're not ready to move your entire bill-paying operation on-line, you can still avoid licking stamps by following one of these three strategies.

Direct debit: Many companies allow you to have their payments drawn directly out of your checking account. Just mark your calendar to make sure the money is there to cover the automatic withdrawals each month. To pay this way, call the company and say you want to set up a direct debit. Each month, you will receive a bill in the mail notifying you when the money will be withdrawn.

Phone pay: Some companies, including American Express, provide 800 numbers their customers can call to pay bills over the phone. You typically must provide your bank-account number, your bank's routing number, and a check number. (Many companies charge a fee for this privilege.) Citibank, for instance, lets its customers phone in to have the bank pay their bills; the cost is $5 a month.

Web pay: Virtually every major company lets you go to its website to make payments free of charge. But this is an inconvenient way to manage a long list of bills. Logging on to 15 different websites to pay 15 different creditors could take as long as writing checks. The savings in postage might not be worth it.