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The only problem with this shortcut is a bookkeeping one. How is B’s bookkeeper going to pick up the transaction? So, he/she has to be notified by whoever made the payment.

Then the entry in the company’s books is via a journal – Debit C and Credit A, with a decent explanation as to what the transaction was all about.

Because of this problem, it is better, if possible, not to take the shortcut.


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