Zikpro - ERPNext Company Setup
A company is a legal entity created by individuals to operate a business or industrial venture.
In ERPNext, the initial company is created during the installation of your ERPNext account. You can select the business type—such as manufacturing, retail, or services—according to what your company is involved in.
If you want to create additional companies, go to:
1. How to Create a New Company
Open the Company page in ERPNext.
Click on the New button to create a new company.
Enter a short name for your company. For instance, if your company's name is "M & J Traders", just enter M&J.
Select the currency your company will be operating in. If your company is based in the UK, select GBP. In Pakistan, select PKR.
Choose the country your company is situated in. For instance, United Kingdom.
Is Group: Check this only if this company is a holding or parent company. If it's a regular working company, leave it blank.
Select a holiday list for your employees. You may name one like "UK Holidays 2025" and select it here.
Select your firm's official letterhead which will appear on invoices and printouts. It typically contains your company name and logo.
Enter your company's tax number (such as VAT or NTN). You can skip it if not needed for now.
Domain: Only needed if you’re handling different types of businesses. You can also leave this blank.
Date of Establishment: Enter the date your company officially started. For example: 01 January 2022.
If your company is part of a bigger group, mention the parent company. If it’s your only company, just leave it empty.
Once everything is filled, just click Save at the top right corner.
1.1 Multi Company Structure
Suppose you have several companies—some large, some small—and they are all part of a group.
ERPNext lets you set up more than one company. The companies can be at the same level (sisters), or you can have parent-child companies.
Parent company: a large company that has other companies.
Child company: a smaller company that is subordinate to the parent.
You can see all the companies in a tree view.
After building the tree, ERPNext will check if child companies have the same accounts as the parent. All accounts can be shown together in a combined chart of accounts.
1.2 Other Options When Creating a Company
1. Domain: This informs ERPNext that you're operating a specific type of business — such as Manufacturing, Retail, Services, or Distribution. This allows the system to display only those features you require.
For instance:
- If you select Manufacturing, ERPNext will display production planning tools, BOM, etc.
- If you choose Services, it will emphasize more project and timesheet features.
2. Is Group: Check this box only if this is not an actual working business, but a parent business used to aggregate other businesses under it for reporting.
For instance:
- If "M&J Group" has 3 companies (M&J Foods, M&J Textiles, M&J Logistics), then "M&J Group" will have Is Group = checked, and the rest won't.
3. Parent Company: If this new company is owned by a larger company, choose the Parent Company here. This indicates ERPNext that this company is a part of a group. When you make a parent, ERPNext will attempt to replicate the chart of accounts from the parent to the new company.
For instance: - If you are creating "M&J Foods" and the parent "M&J Group" already exists, choose that as the parent to have the same accounting structure.
1.3. Tax Details
1. GSTIN / UIN: This is just your company’s official tax number, like a license that shows you’re registered to collect and pay indirect tax (like VAT or GST). If your business is registered for tax in your country, you’ll usually get this number from the tax department.
Example: Something like TX-987654321, just a sample to show what it might look like.
2. GST Category: This informs the system what type of taxpayer your business is. Are you registered, not registered, or offshore? Depending on that, you select options such as Registered, Unregistered, Composition, or Overseas.
Example: If your business operates overseas and does not have to pay local tax, you simply select Overseas.
3. PAN: Consider this your company's primary business ID number for tax purposes. Other nations refer to it by other names, but the idea remains the same — it's employed to monitor tax payments. If your business possesses such an ID, enter it here to remain compliant and organized.
Example: A basic fictional ID of ABC1234XYZ simply to demonstrate the format.
1.4. Address and Contact
1. Date of Incorporation: This is the date your business formally began or got registered. It's primarily for record or legal purposes.
Example: If your business got registered on March 5, 2020, put 05-03-2020.
2. Fax: If your business still has a fax machine (a few businesses do), you can put your fax number here. It's optional and hardly used anymore these days.
Example: +123-456-7890
3. Phone No: Put your company's primary contact number here. This will appear on invoices, quotes, and elsewhere.
Example: +92-300-1234567
4. Website: If your firm has an official website, you can put it here. Directs clients and users to your site from ERPNext.
Example: www.mycompany.com
5. Email: Put in your company's official email address here — such as the one used with customers or suppliers. This email can also be used to send invoices or receive responses.
Example: info@mycompany.com
6. New Address: Where you can put in your company's physical address. It can contain office address, city, postal code, etc., and can be helpful for printing on documents.
Example: Click New Address → then enter like 123 Street Name, City, ZIP Code.
7. Company Description: You can provide a brief introduction of what your company does. This field is not strict — you can enter text, formatting, or even tables if required.
Example: "We are a software company providing cloud-based ERP solutions for small and medium businesses."
1.5 Chart of Accounts
There is a Chart of Accounts for every company. This allows each company to have its own accounting regulations. You can also import accounts with the Chart of Accounts Importer.
ERPNext supports country-based charts of accounts. When creating a new company, select:
Standard Chart of Accounts
Use another company's Chart of Accounts
If a parent company is chosen, the new company will replicate its chart of accounts.
1.6 Defaults
You can define default values for accounts and settings in the company master. They will be used while performing accounting tasks. While creating a company, ERPNext creates a Chart of Accounts and Cost Center automatically.
You can define the following defaults:
Default Letter Head
Default Holiday List
Standard Working Hours
Default Terms and Conditions
Country
Tax ID
Date of Establishment
Domain
2. Features
2.1 Monthly Sales Target
Here you define a monthly sales target for your company. Suppose you want to sell things worth $10,000 per month — just enter that here. ERPNext will then display how much you sold actually, so you know whether you achieved your target or not.
2.2. Account Settings
When you create a new company, ERPNext will automatically set up some simple accounts for you — such as cash, sales, etc. They are part of a thing known as the Chart of Accounts, which is essentially a list of all the money-related things your business keeps track of. Don't worry if you don't understand everything right now — you can add or modify them later when you need to.
These accounts are:
Default Bank Account
Default Cash Account
Default Receivable Account
Round Off Account
Round Off Cost Center
Write Off Account
Discount Allowed/Received Accounts
Exchange Gain/Loss Accounts
Default Payable Account
Default Employee Advance Account
Default Cost of Goods Sold Account
Default Income Account
Default Deferred Revenue/Expense Account
Payroll Payable Account
Expense Claim Payable Account
Default Cost Center
Credit Limit
Default Payment Terms Template
2.3 Exhange Gain / Loss
1. Exchange Gain / Loss Account: This account records the money you win or lose when exchange rates fluctuate during foreign currency payments.
For instance: If someone pays you in USD and the exchange rate fluctuates before you receive the money, the difference (gain or loss) goes to this account. It assists you in viewing the actual impact of differences in currencies on your business.
2. Unrealized Exchange Gain / Loss Account: Occasionally, differences in exchange rates occur before you receive the payment (such as when you've issued an invoice but not yet received the money).
This account is employed to post such unrealized gains or losses temporarily — only to ensure your accounts are correct. When the money is received, the actual gain/loss is transferred to the main account.
2.4 Round Off
1. Round Off Account: Occasionally totals turn out as 99.99 or 100.01, and you'd like to tidy them up (i.e., to precisely 100). This account holds those small adjustments so all balances remain correct. It's helpful when invoices or payments are rounded up or down.
2. Round Off for Opening: When you're first opening your business and entering opening balances, small rounding differences will show as well. This category takes care of those rounding adjustment done only at the time of setup.
3. Round Off Cost Center: It is simply where ERPNext will consolidate those rounding amounts. It assists you in monitoring where rounding adjustments occur — such as under "Main" or any cost center you've created. Visualize it as a folder that stores all rounding-related alterations.
2.5 Fixed Asset Defaults
In fixed assets, these accounts are utilized (most of them are automatically created):
Accumulated Depreciation
Depreciation Expense
Journal Entry Series for Asset Depreciation
Expenses Included In Asset Valuation
Gain/Loss on Asset Disposal
Asset Depreciation Cost Center
Capital Work In Progress
Asset Received But Not Billed
To utilize more than one Finance Books, enable the box Enable Finance book and select a default one.
2.6 Stock and Manufacturing Settings
The Perpetual Inventory feature tracks changes to stock in accounts. It is enabled by default.
Default Inventory Account
Stock Adjustment Account
Stock Received But Not Billed
Expenses Included In Valuation
Default Provisional Account
Default In-Transit Warehouse
Default Operating Cost Account: Define overhead manufacturing costs here.
When you make an entry for manufacturing through a work order, the system takes this account for operating expense. Once the stock entry is posted, the cost gets posted to this account. You will need to make a Purchase Invoice to complete it.
2.7 HRA Settings (House Rent Allowance)
This allows your organization to configure salary components such as basic pay, HRA (house rent), and any overdue pay (arrears). After it is configured, the system can calculate the amount of tax to deduct from salary, particularly for individuals who receive house rent allowance. It makes salary and tax calculations easy.
2.8 Bank Remittance Settings
This is used whenever your business pays individuals (such as workers or suppliers) directly into their bank accounts. You select the correct file format (such as CSV or XML) that the bank requires, and include information such as account number and payment reference. It assists in making many payments at a time, securely and accurately.
For UK:
The Payment Order feature is also supported, but bank remittance types and upload options vary with banks.
UK banks commonly accept bulk payments through BACS, CHAPS, or Faster Payments.
The majority of banks accept a CSV or XML format file as opposed to a plain text file.
No Client Code or Product Code like in the case of Kotak. Banks might request:
Sort code
Account number
Company/Payment reference
You should verify the particular format and your UK bank requirements (e.g., Barclays, HSBC, Lloyds) prior to uploading the remittance file.
2.9 Budget
An ERPNext budget is similar to a spending quota you assign to your projects or departments — to help contain costs. If anyone attempts to spend beyond the budget, the system will prevent it unless an Exception Budget Approver permits it.
Example: If you have the marketing budget as $5,000 and someone attempts to spend $6,000, only the designated approver can approve the extra $1,000.
You can also assign a role named Exception Budget Approver. This individual can authorize expenses despite the budget being overspent.
2.10. Company Info
You can save these company records:
Date of Incorporation
Phone Number
Fax
Email
Website
Address
Registration Details (You can save the VAT number, company registration number (CRN), and bank details for reference.)
2.11 Deleting All Company Transactions
You can delete all orders, invoices, and other transactions. Be careful—this cannot be undone.
Requirements:
You must be a System Manager
You must be the creator of the company
Steps:
Click Delete Transactions under Manage
Enter your password
Type in the company name to confirm
Done! Just transactions are deleted. Master data (items, employees, etc.) remain.
2.12. Deleted items
Sales/Purchase Orders, Invoices, Receipts, Notes
Monthly sales and history
Notifications
Linked Lead Addresses
Communications
Naming series
Stock Entries linked to Warehouses
2.13. Change Parent Company
To change an existing company's parent company, go to the Parent Company field, select the new parent, and save.
3. Related Topics
Setting up Taxes
Users and Permissions
Adding Users
Letter Head
Email Account
Administrator.