What is this page about: how Light handles accounts payable when your business runs more than one legal entity. That covers vendor setup across entities, the Entity field on a bill, how intercompany costs get resolved, and how to report on payables by entity.
On this page
- Vendors across entities
- The Entity field on a bill
- Intercompany considerations
- Reporting across entities
- Edge cases and limits
- Related articles
Light runs accounts payable across multiple legal entities from a single account. Each bill posts to exactly one entity, a vendor can serve several entities at once, and you report on payables one entity at a time.
Vendors across entities
A vendor in Light is a single record shared by every entity it works with. Assign a vendor to as many entities as it works with, and set defaults for each entity separately. On the vendor form these fields are labelled:
- Default account (GL account)
- Default tax code
- Default from account (bank account)
One of a vendor's entities can also be marked as its default, which matters for bill parsing (see Edge cases below).
Each entity can use different values for the same vendor. Open the Light app to assign a vendor to another entity or update its entity-specific defaults.
The Entity field on a bill
Every bill in Light carries an Entity. You set this when you create the bill, and it needs to be in place before the bill posts to the books.
The Entity determines:
- Which legal entity's books the bill posts to.
- Which bank accounts show up as options when you pay the bill, in the Pay from account field on the bill detail view (shown as Payment from in the enter-payment dialog).
- Which currencies the amounts convert into. The bill keeps the currency of the vendor's invoice, and Light converts the amounts to the entity's local currency and to your group currency when the bill posts.
The Bills list has an Entity filter, so each entity's finance team can work from a filtered view.
Approval on a bill is configured at the vendor level in Light, not by entity. If a vendor has an approver assigned, that approver reviews bills from that vendor regardless of which entity the bill belongs to.
Intercompany considerations
When one entity pays for something that benefits another entity, enter the bill against the entity that's actually paying it. Don't split the bill across entities to reflect the benefit.
Resolve the shared cost afterwards, either with an intercompany journal entry or through an intercompany billing process, depending on how your team handles recharges.
Reporting across entities
Run AP aging and other payables reports one entity at a time. If you operate more than one entity, check each entity's payables separately to see the full picture.
Consolidation across entities is available on the financial statement reports: Profit and Loss, Balance Sheet, Trial Balance, and Cash Flow. See Multi-Entity Consolidation for how that works.
Edge cases and limits
- A vendor only appears as an option for entities it's been explicitly assigned to. One of those entities can be marked as the vendor's default. If a bill is parsed with an entity that isn't allowed for that vendor, Light falls back to the vendor's default entity and the bill carries on.
- Entity-specific defaults (default account, default tax code, default from account) apply only within that entity. Changing a default on one entity doesn't affect the vendor's setup on any other entity.
Related articles
Also searched as: Multi-entity AP, intercompany AP, entity field on a bill, vendor defaults per entity, cross-entity vendor setup, consolidated AP by entity, company entity Light.