How is a bill paid through the intercompany ? if it refers to transactions between related companies

No. Because QuickBooks only allows Bank or Credit Card accounts as payment sources in the Pay Bills feature, you can’t select an intercompany account directly. Instead, create a Clearing/Wash account, use a Journal entry to clear the open balance against your intercompany liability account, and link that entry to the Bill.

Here’s how to do it:

Step 1: Make a Clearing or Wash account

1. Go to All apps > Accounting > Chart of accounts.
2. Click the New account button in the top right.
3. Name the account something like Clearing/Wash Account.
4. Set the Account type to Bank, then the Detail type to Cash on Hand.
5. Click Save and close.

Step 2: Record a Journal Entry to Clear the Bill

1. Navigate to +Create, then select Journal entry.
2. On line 1, select the Clearing/Wash account you created under the Account column.
3. Debit the amount of the bill, and in the Name column select the Vendor.
4. On line 2, select your intercompany account.
5. Credit the same amount, then click Save and close once done.

Step 3: Apply the Journal Entry to the open Bill

1. Go to +Create, then Pay Bills.
2. Make sure to select the Clearing/Wash account in the Payment account section.
3. Check the box to apply the credit to the bill in the credits section, then click Save and close.

If you have an accountant, you can also consult them to ensure the Journal entry aligns with your corporate structure.

If you have more questions about QuickBooks, feel free to reply below.