A multi-entity ledger is a database architecture designed to support organizations with multiple legal entities, subsidiaries, or distinct brands under one umbrella. Unlike a standard ledger which assumes a single "owner" of accounts, a multi-entity ledger introduces a hierarchical dimension to the data model.
This architecture is essential for marketplaces (buyer/seller entities), platforms (tenant/sub-merchant structures), and global fintechs (regional subsidiaries like US-Corp and EU-Ltd). It allows for strict data segregation at the transaction level while enabling real-time consolidated reporting via a unified API surface.
Data Modeling: Namespaces and Hierarchy
Technically, this is handled by tagging every account and transaction with an entity_id or tenant_id. Segregation: The ledger enforces strict boundaries. A query for Entity A balances must never leak data from Entity B. This is often achieved through logical sharding or row-level security policies in the database. Hierarchy: The model supports parent-child relationships. A "Group Level" query can aggregate the cash_on_hand across all child entities, converting them to a base reporting currency on the fly, without physically moving the money.
The Inter-Entity Bridge
A critical function of multi-entity ledgers is managing relationships between entities. If Entity A pays a vendor on behalf of Entity B, the ledger must record this not just as a withdrawal, but as an intercompany loan. Automated Due-To/Due-From: The system automatically generates the reciprocal journal entries. A debit in Entity A creates a corresponding credit in Entity B's intercompany payable account, ensuring the global balance sheet remains neutral (Net Zero).
