I personally just post the payment due for each company.   Then I set up and use  "Due To"  (Liability) account for the company  owes the money to the other  & Due From (Asset) account  for the company that is due the money.  

You can use these accounts for any transactions between the two companies.  At some point, the company that owes the money can transfer or write a check to the other one.

Due to and Due from between the two companies should ALWAYS equal each other.

Shirley

Best Business Strategies I have a somewhat similar situation...We put in 1 purchase order but for whatever reason the vendor is asking that they be able to invoice us for example "50%"  of the order and then their other company will invoice us the remainder.  (we are assuming the balance or last percentage will be for "commission").  For example: PO 123 for 20kgs of product X at a cost of 50$/kg = Total PO of $1000.  Then once the product ships, Vendor will invoice us for $500 and the other company will invoice us $500.  How can I make this work???  Will I need a breakdown on the cost for the original PO we sent before entering their PO?  I am assuming that I should not enter the secondary company as a vendor as it is a subsidiary of the first company.