How the Sold-To Legal Entity Is Determined

The sold-to party on a purchase order is the party that's liable for the purchase order, and has relationship with the location of the supplier that's going to fulfill the purchase order.

Settings That Affect Determination of the Sold-To Legal Entity

The following attributes are used by the application to determine the sold-to legal entity on a purchase order.

• Supplier

• Supplier Site

• Country of the supplier site

• Deliver-to location

• Receiving Organization

• Item Category

• Item Asset Indicator

How the Sold-To Legal Entity Is Determined

These steps are performed in and by the application to determine the sold-to legal entity on a purchase order.

1. Information for an order such as requisition BU, supplier, and supplier site is entered. For requisition to purchase order automation the application knows this and other information from the requisition.

2. The application checks to see if Oracle Fusion Supply Chain Financial Orchestration is implemented. If so, it calls the SFO process and passes all the necessary information.

3. SFO gathers some additional information such as profit center BU and asset indicator and identifies a financial orchestration flow based on available attributes. The sold-to legal entity (LE) is associated with the financial orchestration flow.

4. If SFO isn't implemented or SFO returns no agreement, and hence no LE is found, then the application finds the inventory organization using this logic:

   • If Multiple Legal Entities on Order attribute is set to either Allow or Warning, which means centralized procurement, then the legal entity of the Requisitioning BU is used.

   • If Multiple Legal Entities on Order attribute is set to Error, which means decentralized procurement where every LE orders for themselves, then the header level legal entity defaults from the inventory organization for the ship-to/deliver-to organization. The hierarchy for determining the deliver-to organization on the requisition is as follows:

     1. If the deliver-to location on the requisition line is associated with an inventory organization, then that becomes the ship-to/deliver-to organization.

     2. If the deliver-to location on the requisition line isn't associated with an inventory organization, then the application checks whether the deliver-to location in the requester's preferences is associated with an inventory organization. If it's, then that becomes the ship-to/deliver-to organization.

     3. If neither location (on the requisition line or in the requester's preferences) is associated with an inventory organization, then the application uses the default deliver-to organization defined for the requisitioning BU.

Here's a simplified example of how that might work:

1. A requisition is selected on the Process Requisitions page and added to the document builder.

2. The application identifies the country of the supplier site from the supplier master for the purchase order.

3. The application determines the inventory organization associated with the deliver-to location

4. The application identifies the profit center BU of the inventory organization.

5. The application checks if Oracle Fusion Financial Orchestration is enabled.

6. If enabled, it determines the financial orchestration flow by matching the profit center BU to the receiving BU and supplier country.

7. The sold-to legal entity specified on this flow is returned back which is included in the document builder.

8. The sold-to legal entity is carried over to the purchase order.