I am accounting for several companies that are independent but have the same owner. We transfer cash between these entities to cover expenses in the cash poor companies. These intercompany payables/receivables will not be paid back or settled. Therefore the intercompany a/r or payable just keeps increasing. What is a better way to account for these transfers since they are not true a/rs or payables?
If the businesses are run as sole proprietorships, then it's easy to do. Money going out of a profitable company is recorded as a draw to the owner. Deposited into the cash poor company as a contribution of equity from the owner.
If the companies are incorporated, then there are problems. I would suggest talking to a CPA about what to do.