I have two companies, let’s say company A and company B. Company A has a contract with a client and purchases services from company B, a contract exists to say that company A can discharge its liability to company B by getting a client to pay money directly to company B. Company A doesn’t have a bank account as such, so the client of A is making payment directly into the account of company B.
I’ve created the appropriate invoices / purchases for each company, so now I need to get the amount owed to company A by the client to reduce the amount owing from company A to company B (These amounts will offset each other to zero). As company A doesn’t have a bank account there’s nothing to tag against. What’s the best way to account for this?
Should I create a new control account, or should I apply a journal to one of the control accounts provided by default in the CoA?