USA As a subcontractor, recording mutual client payment less contractor commissions

[dorange]

We are a subcontractor who will invoice for the full cost of our services. The contractor will in turn invoice the client and when the contractor receives payment, they will deduct their commission and early pay discount if applicable before submitting payment to our company. I am not sure how to record this. A credit memo is not appropriate as we are not issuing the credit. The contractor is acting as a pass through entity for our mutual client. Thoughts?

 

[kirby]

You are paid by the contractor, who I see as your true client. Why not use the credit memo?