Legal Entities

Every order product and order product consumption schedule has a Legal Entity field. You can control several treatment setups by creating a legal entity for each setup, then assigning your legal entities to order products as needed.

When an order product is created, it inherits the billing rule, tax rule, and revenue recognition rule from the parent product. Salesforce Billing then looks for a match between the order product’s legal entity and the legal entity on one of the billing rule’s billing treatments, and one of the tax rule’s tax treatments. Design your implementation so that the order product’s legal entity matches at most one treatment on the billing rule and on the tax rule. If multiple treatments are required for an order product, create matching rules such that the rule can be updated on the order product to achieve the result you want. Updating the rule or legal entity triggers the Billing package to update the treatment. Updating only the treatment can result in unanticipated outcomes.

Salesforce Billing uses the same process to assign a revenue recognition treatment to a revenue schedule. However, the lookup to the revenue recognition treatment appears only on the revenue schedule.

Tip By default, order products and order product consumption schedules don’t have a value for their legal entity. We recommend using a process builder, Flow, or manual assignment to assign legal entities to your order products and your order product consumption schedules. A useful process builder for this situation would run on Create, while a Flow would run upon record creation and before the record is saved. You could also use after insert triggers.

Legal entities and rules can’t be updated on activated order products or for order product consumption schedules that look up to an activated order product.

Salesforce Billing accepts null values for the Legal Entity lookup field. However, this configuration can cause data validation issues, especially in orgs with a combination of null and populated Legal Entity lookup fields across different objects. We recommend always using legal entities in your Legal Entity lookup field.

When you invoice your order, the invoice line inherits the legal entity from its originating order product. However, you can also set the legal entity manually on invoice lines that haven’t been posted. A revenue schedule inherits its legal entity from the parent order product or invoice, but you can set legal entity manually on the revenue schedule too. In both cases, you must manually change the associated treatment, because it doesn’t happen automatically on these objects. You can also have different legal entities between an order product and a related Bill to Account record or Ship to Account record.

In multicurrency orgs, legal entities of one currency can evaluate records in other currencies.

Note Order products and order product consumption schedules have independent legal entities. Each legal entity must be set individually.