ERPNext complete configuration guide

Initial setup - from a fresh install to a system ready for your team

This guide covers the one-time setup work an admin or owner does before associates start using ERPNext
day to day - everything in the 12-stage training series assumes these are already in place. Work through it
roughly in order; later sections build on earlier ones.

Take a backup before making large configuration changes (see the last section) - account structures, naming series
and tax templates are far easier to plan correctly up front than to undo afterwards.

1. The setup wizard (first login on a fresh site)

The first time anyone logs into a brand-new ERPNext site, a Setup Wizard runs automatically and asks a
handful of questions that configure the basics of the whole system.

Step 1. Choose your Language and Country/Region - this affects default date formats, currency, and
which Chart of Accounts template is offered.
Step 2. Enter your Company Name and Company Abbreviation. The abbreviation (e.g. 'WC' for 'Wood
Crafts') is appended to every account and warehouse name created for this company (e.g. 'Stores - WC'),
so keep it short and choose carefully - it is hard to change later.
Step 3. Set the Default Currency (e.g. PKR) and Time Zone.
Step 4. Enter an opening Bank Account name - ERPNext creates a matching account under 'Bank
Accounts' in the Chart of Accounts.
Step 5. Choose a Chart of Accounts: pick the standard template for your country (recommended for most
businesses) or 'Standard' for a generic set you can edit later.
Step 6. Optionally add email addresses for other Users you want to invite - or skip this and add them later
(Stage 12 of the training series).
Step 7. Click 'Complete Setup'. ERPNext creates the Company, Fiscal Year, Chart of Accounts, default
warehouses, and a few standard records to get started.
This wizard normally runs only once per site. If something was entered incorrectly - especially the Abbreviation or Chart
of Accounts - it is usually easier to fix it manually afterwards (see the sections below) than to redo the wizard.

2. Company - core settings and default accounts

Step 1. Type 'Company' in the search bar and open your company's record.
Step 2. Under the Settings section, set the Domain (e.g. 'Manufacturing', 'Retail', 'Services', 'Distribution') -
this affects which fields and features appear elsewhere in the system.
Step 3. Under 'Default Holiday List', link a Holiday List once you've created one (Section 11) - this is used
for attendance and leave calculations.

Field / button What to select or type

Default Bank Account / Used as the default 'Paid From' / 'Paid To' on new Payment Entries.
Default Cash Account

Default Receivable Account / Used as the default Debtors/Creditors account on new Customers
Default Payable Account and Suppliers.
 Default Cost Center Applied to new transactions if no other Cost Center is set.

Round Off Account / Write Used to post small rounding differences and written-off amounts.
Off Account

Stock Adjustment Account / Used by Stock Entries and Manufacture entries - see the
Expenses Included In Manufacturing guide (Stage 6).
Valuation

Step 4. Upload a Company Logo under 'Company Logo' - this appears on print formats by default.
Step 5. Fill in the company Address and Tax ID under the 'Address and Contacts' tab - click 'New Address'
if none exists yet.
Step 6. Click Save.

3. Fiscal Year and Accounting Settings

Step 1. Type 'Fiscal Year' in the search bar. The setup wizard usually creates the current one
automatically - check its Year Start Date and Year End Date match your accounting calendar (e.g. 1 July
to 30 June, or 1 January to 31 December).
Step 2. If the new year hasn't been created yet, click + New, enter a Year (name), Year Start Date and
Year End Date, then Save.
Step 3. Type 'Global Defaults' in the search bar and confirm the Default Company and Current Fiscal Year
are correct.
Step 4. Type 'Accounting Settings' in the search bar to review company-wide accounting behaviour.

Field / button What to select or type

Determine Address Tax Choose whether tax rules are based on the 'Billing Address' or
Category From 'Shipping Address' on transactions.

Book Asset Depreciation When enabled, depreciation Journal Entries (Stage 9 of the training
Entry Automatically series) post on schedule without manual action.

Enable Trial Balance Report Lets you view a Trial Balance for an open period rather than only
Without Closing after a Period Closing Voucher.

Toggle names and exact wording can vary slightly between ERPNext versions - if you don't see one of these, search the
Accounting Settings page for the closest match.

4. Chart of Accounts and Cost Centers

Step 1. Type 'Chart of Accounts' in the search bar to see the tree created by the Setup Wizard.
Step 2. Add company-specific accounts as needed - e.g. additional bank accounts, or specific expense
heads such as Rent, Utilities, Salaries - by selecting a parent group and clicking 'New'. Set Account Type
appropriately (Bank, Expense Account, etc.).
Step 3. Type 'Cost Center' in the search bar to set up Cost Centers if you want to track income and
expense by department, branch, or project. A root Cost Center named after your company is created
automatically - add others underneath it.
 Step 4. Set a Default Cost Center on the Company record (Section 2) and/or on specific Items,
Customers, or Suppliers if you want their transactions to default to a particular Cost Center.

5. Tax templates
Tax templates let ERPNext calculate sales tax, GST, or VAT automatically on transactions instead of you
typing it every time.

Step 1. Type 'Sales Taxes and Charges Template' in the search bar, then + New.
Step 2. Give it a descriptive name, e.g. 'Sales Tax 18% - WC'.
Step 3. In the table, add a row: set Type to 'On Net Total', Account Head to your sales tax account (e.g.
'Sales Tax - WC', create it if needed under Chart of Accounts with Account Type 'Tax'), and Rate to the
percentage (e.g. 18).
Step 4. Tick 'Is Default' if this should be applied automatically to every Quotation, Sales Order and Sales
Invoice for this company.
Step 5. Click Save. Repeat the same steps for 'Purchase Taxes and Charges Template' using your
purchase tax account.
If certain items have a different tax rate, create an 'Item Tax Template' for them and link it under that item's Taxes tab -
it overrides the default template for that item only.

6. Naming series - document numbering

Step 1. Type 'Naming Series' in the search bar.
Step 2. Select the Document Type you want to change, e.g. 'Sales Invoice', from the 'Select Transaction'
dropdown.
Step 3. In the 'Series List' box, you'll see patterns like '[Link].-'. The '.YYYY.' part inserts the current
year, and the number increments automatically (e.g. SINV-2026-00001, SINV-2026-00002, ...).
Step 4. Add a new pattern on its own line if you want a different prefix (e.g. for a second branch), or
reorder the list and click 'Update' to make a different pattern the default for new documents.

7. Item, warehouse and stock settings

Stage 2 of the training series covers creating individual Items and Warehouses. This section covers the
system-wide defaults that apply when new ones are created.

Step 1. Type 'Item Group' in the search bar and build out your category tree (e.g. 'Raw Material', 'Finished
Goods', 'Services') under the default 'All Item Groups' root - this is used for reporting and as a default on
new items.
Step 2. Type 'UOM' in the search bar if you need units beyond the defaults (Nos, Kg, Box, Meter, etc.
already exist).
Step 3. Type 'Warehouse' in the search bar and confirm the default warehouses created by the Setup
Wizard (usually 'Stores', 'Work In Progress' and 'Finished Goods', plus an 'All Warehouses' root) match
what your business needs - add more if you operate multiple locations.
Step 4. Type 'Stock Settings' in the search bar.

Field / button What to select or type

 Default Warehouse Used when no warehouse is specified on a new document.

Default Valuation Method FIFO or Moving Average - applies to new items unless overridden
on the Item itself.

Allow Negative Stock Leave off for most businesses - prevents issuing more stock than is
available.

Stock Frozen Upto Set a date to prevent any stock changes before that date - useful
once a period is closed and finalised.

8. Price lists, selling and buying settings

Step 1. Type 'Price List' in the search bar. ERPNext creates 'Standard Buying' and 'Standard Selling' by
default - each has a Currency and can be marked 'Enabled'.
Step 2. To set rates, type 'Item Price' in the search bar, + New, and enter the Item, Price List, and Rate.
Step 3. Type 'Selling Settings' in the search bar and set the default Customer Group, Territory, and Selling
Price List used when creating new Customers and Quotations.
Step 4. Type 'Buying Settings' in the search bar and set the default Supplier Group and Buying Price List
used when creating new Suppliers and Purchase Orders.

9. Print settings and letter head

Step 1. Type 'Letter Head' in the search bar, then + New. Upload your company header image (logo,
address, contact details) and tick 'Set as Default'.
Step 2. Type 'Print Settings' in the search bar to set system-wide print preferences, such as whether to
show the company logo, the default currency symbol display, and whether line items with zero quantity are
hidden.
Step 3. Per document type, you can also set a specific default Print Format - Stage 12 of the training
series covers creating custom ones.

10. Email accounts and notifications

Step 1. Type 'Email Account' in the search bar, then + New - enter the address and authenticate with your
email provider. Tick 'Default Outgoing' so documents can be emailed directly (Stages 1 and 12 of the
training series).
Step 2. Type 'Notification' in the search bar to create automated alerts - e.g. an email to a manager
whenever a Sales Order over a certain value is submitted. Set the Document Type, the trigger (Save,
Submit, Days After, etc.), an optional Condition such as 'doc.grand_total > 100000', and the message.

11. HR basics (if using the HR module)

If your team will use the HR module (Stage 11 of the training series), a few masters are worth setting up
early.

Step 1. Type 'Holiday List' in the search bar, then + New. Give it a name and date range, then use 'Add to
Holidays' to mark weekly offs (e.g. every Sunday) and add national or company holidays individually.
 Step 2. Link this Holiday List as the company's 'Default Holiday List' (Section 2).
Step 3. Type 'Department' and 'Designation' in the search bar to create the department and job-title lists
your Employee records will use.

12. Manufacturing settings (if using Manufacturing)

If you'll use the Manufacturing module (covered separately in the manufacturing guide), a few defaults are
worth confirming.

Step 1. Type 'Manufacturing Settings' in the search bar.

Step 2. Set the Default Work In Progress Warehouse and Default Finished Goods Warehouse - these
pre-fill on new Work Orders.
Step 3. Choose how raw materials are deducted, under 'Backflush Raw Materials Based On': either 'BOM'
(deduct standard BOM quantities when a Work Order is marked as Manufactured) or 'Material Transferred
for Manufacture' (deduct exactly what was transferred, even if it differs from the BOM).
Step 4. Decide whether Production Plans should be able to pull directly from Sales Orders, and whether
capacity planning (based on Work Station hours) should be enforced.

13. Backups
Step 1. Type 'Backups' in the search bar to download an on-demand backup of your database and files -
useful before making major configuration changes.
Step 2. Scheduled, automatic backups are normally configured at the server or hosting level rather than
from within ERPNext - if you're on a hosted plan, your hosting provider typically handles this; if self-hosted,
confirm with whoever manages the server that a backup schedule is in place.

Where this fits in

With this configuration in place, your associate can begin Stage 1 of the training series (Basics and
Navigation) on a system that already reflects your company's setup - the Customer, Item, and Warehouse
examples in the training PDFs will line up with real categories, accounts and tax rates you've configured here.