We are part of a group located in different locations/Countries, and we also have vendors in these same countries.
So we often have vendor invoices due for payment, and we ask our sister company to pay on our behalf as it speeds up the payment process and we then net off the balances through our intercompany accounts.

In order to maintain a correct transaction list of invoices from these vendors, we record them in A/C's Payable, but this leaves a payable outstanding as the payment has already been paid through the intercompany account.

What would be the best way to handle this?

I was considering setting up a bank - which is tied to the GL account of the sister company who pays these vendors on our behalf. Would this work???? Or do you have a better suggestion.