Legal Entities
An entity is a legal company operating inside your application. One company in one country means one entity you can largely forget about. A group with subsidiaries is what entities exist for.
Where to find it
Architect Panel → ERP - Setup:
- Legal Entities — one row per legal company
- Entity Permissions — which security groups may see and write which entity
Entity is not tenant
- A tenant is a customer of the platform. Tenants are sealed from one another and data never crosses.
- An entity is a legal company one customer operates. Entities are designed to be crossed, deliberately.
Both central group-accounting operations require crossing. An intercompany journal writes both sides in one transaction; a consolidation reads every subsidiary at once. Tenant isolation forbids both by construction, and should. Entity exists so those are possible without weakening it.
Setting one up
Add a row per company with its name, its functional currency (the one it keeps its books in) and its reporting currency (the one the group consolidates into). For a single-company system the two are usually the same.
Granting access
Use Entity Permissions. Access is an ordinary security group grant rather than a parallel permission system, so entity restrictions appear in the security screens your administrators already review instead of hiding in a module-specific corner.
A user permitted one entity sees only that entity everywhere. A finance user needing the group view is granted several.
What is filed by entity
Journals, stock, assets, price lists, documents and projects all carry one. That is what makes a trial balance, a stock valuation or a sales report answerable for one company rather than for everything at once.
Worked example — a group of three
A holding company with two trading subsidiaries sets up three entities. Each subsidiary keeps books in sterling; the group reports in sterling too, so functional and reporting match. Operational staff are granted their own subsidiary only. The finance team is granted all three, which is what makes consolidation and intercompany possible for them and impossible for everybody else.
Plan this before you post
Adding an entity later is easy. Splitting one into two after a year of postings is not — every historical record has to be attributed, and some genuinely will be ambiguous.
Recommendations
- Create the second entity now, dormant, if there is any prospect of one.
- Set both currencies at creation. Changing a functional currency after postings exist has no clean fix.
- Grant entity access through groups, never per user.
- Name entities as they appear on their statutory accounts, not by trading name.