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Documentation Index

Fetch the complete documentation index at: https://mintlify.com/frappe/erpnext/llms.txt

Use this file to discover all available pages before exploring further.

The Company doctype is the foundation of your ERPNext instance. It stores essential information about your organization including accounting defaults, warehouses, and system preferences.

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Creating a New Company

1

Navigate to Company List

Go to Home > Setup > Company or search for “Company” in the search bar.
2

Create New Company

Click New to create a new company record.
3

Enter Basic Information

Fill in the required fields:
  • Company Name: Full legal name of your company
  • Abbreviation (abbr): Short code appended to account names (auto-generated from company name)
  • Country: Select your country for regional fixtures
  • Default Currency: Base currency for all transactions
4

Configure Chart of Accounts

Choose how to create your chart of accounts:
  • Standard Template: Use ERPNext’s built-in chart of accounts
  • Existing Company: Copy structure from another company in the system
5

Save and Let ERPNext Initialize

When you save, ERPNext automatically creates:
  • Default accounts (Cash, Bank, Receivable, Payable, etc.)
  • Default warehouses (Stores, Work In Progress, Finished Goods, Goods In Transit)
  • Default cost centers (Main cost center)
  • Default departments (Accounts, Sales, Purchase, etc.)
The company abbreviation is mandatory and must be unique. It’s automatically appended to account names like “Cash - WP” where “WP” is the abbreviation.

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Key Company Fields

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Basic Information

FieldDescriptionExample
Company NameLegal name of the company”Wind Power LLC”
AbbreviationShort code for accounts”WP”
CountryCompany’s country of operation”United States”
Default CurrencyBase currency for accounting”USD”
Tax IDGovernment tax identification number”12-3456789”

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Accounting Defaults

ERPNext auto-creates and assigns default accounts during company setup: 
# From company.py:617-641
default_accounts = {
    "default_cash_account": "Cash",
    "default_bank_account": "Bank",
    "round_off_account": "Round Off",
    "accumulated_depreciation_account": "Accumulated Depreciation",
    "depreciation_expense_account": "Depreciation",
    "capital_work_in_progress_account": "Capital Work in Progress",
    "asset_received_but_not_billed": "Asset Received But Not Billed",
    "default_expense_account": "Cost of Goods Sold",
    "stock_received_but_not_billed": "Stock Received But Not Billed",
    "default_inventory_account": "Stock",
    "stock_adjustment_account": "Stock Adjustment",
}

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Inventory Settings

When enabled, stock movements automatically create accounting entries:
  • Purchase Receipt creates entries in Stock and Payable accounts
  • Delivery Note creates entries in Stock and Receivable accounts
  • Stock Entry affects inventory accounts in real-time
Requirements:
  • Must set a Default Inventory Account
  • Cannot be disabled once transactions exist
Track inventory for each item separately instead of warehouse-level tracking.
Cannot be changed after Stock Ledger Entries exist. This is a one-way switch validated in company.py:210-226.
Choose how inventory is valued:
  • FIFO: First In, First Out
  • Moving Average: Weighted average cost
  • LIFO: Last In, First Out
Cannot change valuation method once stock transactions exist for items without their own valuation method (company.py:185-208).

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Parent Company and Group Companies

ERPNext supports multi-company hierarchies using a nested set structure: 
# From company.py:591-610
def set_chart_of_accounts(self):
    """If parent company is set, chart of accounts will be based on that company"""
    if self.parent_company:
        self.create_chart_of_accounts_based_on = "Existing Company"
        self.existing_company = self.parent_company

def validate_parent_company(self):
    if self.parent_company:
        is_group = frappe.get_value("Company", self.parent_company, "is_group")
        if not is_group:
            frappe.throw(_("Parent Company must be a group company"))
1

Create Parent Company

Create a company and check Is Group to make it a parent company.
2

Create Child Companies

When creating new companies, set the Parent Company field. The chart of accounts will automatically copy from the parent.
3

View Hierarchy

Use the tree view to see your company structure and navigate between related companies.

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Default Warehouses

When a company is created, these warehouses are automatically set up: 
# From company.py:378-411
default_warehouses = [
    {"warehouse_name": "All Warehouses", "is_group": 1},
    {"warehouse_name": "Stores", "is_group": 0},
    {"warehouse_name": "Work In Progress", "is_group": 0},
    {"warehouse_name": "Finished Goods", "is_group": 0},
    {"warehouse_name": "Goods In Transit", "is_group": 0, "warehouse_type": "Transit"},
]

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Default Departments

ERPNext creates a comprehensive department structure automatically:
  • All Departments (parent group)
    • Accounts
    • Marketing
    • Sales
    • Purchase
    • Operations
    • Production
    • Dispatch
    • Customer Service
    • Human Resources
    • Management
    • Quality Management
    • Research & Development
    • Legal

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Important Validations

Cannot change default currency once transactions exist. The system validates this in company.py:318-332.
Cannot delete company if GL Entries or Stock Ledger Entries exist. All transactions must be cancelled first.
All default accounts must belong to the company and cannot be group accounts or disabled accounts (company.py:243-293).

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Advanced Settings

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Exchange Rate Revaluation

  • Auto Exchange Rate Revaluation: Automatically revalue foreign currency accounts
  • Auto ERR Frequency: Set frequency (Daily, Weekly, Monthly)
  • Submit ERR Journal Voucher: Auto-submit revaluation entries

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Account Freezing

# Prevent backdated entries
accounts_frozen_till_date = "2024-03-31"
role_allowed_for_frozen_entries = "Accounts Manager"
Set Accounts Frozen Till Date to prevent users from creating or modifying transactions before that date. Specify a role that can bypass this restriction.

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API Reference

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Create Company Programmatically

import frappe

company = frappe.get_doc({
    "doctype": "Company",
    "company_name": "My Company",
    "abbr": "MC",
    "country": "United States",
    "default_currency": "USD",
    "create_chart_of_accounts_based_on": "Standard Template",
    "chart_of_accounts": "Standard",
    "enable_perpetual_inventory": 1
})
company.insert()

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Create Tax Templates

# From company.py:239-241
company.create_default_tax_template()
This method sets up country-specific tax templates based on the company’s country setting.

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