Legal Entities

An entity is a legal company operating inside your application. If the business you are modelling is one company in one country, you will have exactly one entity and can largely forget about it. If it is a group with subsidiaries, entities are what let one application run all of them.

Entity is not the same as tenant

The platform already has multitenancy, and it is tempting to assume a second company is a second tenant. It is not, and the distinction is deliberate.

• A tenant is a customer of the platform. Tenants are sealed from one another — data never crosses, and that isolation is enforced at the lowest level.
• An entity is a legal company that one customer operates. Entities are designed to be crossed, carefully and on purpose.

The reason is that the two central group-accounting operations require crossing. An intercompany journal has to write both sides — one company owes, the other is owed — in a single transaction. A consolidation has to read every subsidiary at once. Tenant isolation forbids both by construction, and rightly so. Entity exists precisely so those operations are possible without weakening the isolation that protects one customer from another.

Setting one up

Create a row per legal company, with its name, its own currency and its reporting currency. The functional currency is the one that company keeps its books in; the reporting currency is the one the group consolidates into. For a single-company system they will usually be the same.

Granting access

Entity access is granted as an ordinary security group permission rather than through a separate system of its own. That is deliberate — it means entity restrictions appear in the security screens your administrators already use, alongside every other grant, instead of hiding in a module-specific corner where they will be forgotten during an access review.

A user who is permitted only one entity sees only that entity's records, everywhere in the application. A finance user who needs the group view is granted several.

What is filed by entity

Ledger journals, stock, assets, price lists, documents and projects all carry an entity. That is what makes a trial balance, a stock valuation or a sales report answerable for one company rather than for everything at once.

Plan this before you post anything

Adding an entity later is easy. Splitting one entity into two after a year of postings is not — every historical record has to be attributed, and some of them genuinely will be ambiguous. If there is any prospect of a second legal company, set both up at the start even if one is dormant.