Accounts Settings in ERPNext

ERPNext allows you to configure various accounting behaviors according to your business requirements. These settings help manage transactions, taxes, accounting periods, deferred accounting, printing preferences, currency exchange handling, and financial reports.

1. Transaction Settings

Over Billing Allowance (%)

Defines the percentage by which a transaction can be billed beyond its original value.

Example:

• Order Value: ₹10,000
• Over Billing Allowance: 10%
• Maximum Billable Amount: ₹11,000

Role Allowed to Over Bill

Users assigned this role can overbill transactions beyond the configured allowance percentage.

Check Supplier Invoice Number Uniqueness

Prevents duplicate Purchase Invoices from being created using the same Supplier Invoice Number.

This helps avoid duplicate accounting entries and supplier invoice processing errors.

Unlink Payment on Cancellation of Invoice

When enabled:

• Linked payments are automatically unlinked when an invoice is cancelled.
• The payment becomes an advance payment.
• The invoice can be amended without cancelling the payment entry.

Automatically Fetch Payment Terms from Order

When enabled:

• Sales and Purchase Invoices inherit payment schedules from linked orders.
• Due dates are recalculated based on the invoice posting date.
• Invoice payment amounts are recalculated using invoice totals.
• Company default payment terms are ignored.

When disabled:

• Payment terms must be entered manually or fetched from Company defaults.

Delete Accounting and Stock Ledger Entries on Deletion of Transaction

Allows ERPNext to delete linked General Ledger and Stock Ledger Entries when a cancelled transaction is deleted.

Useful when document naming series must be reused after cancellation and deletion.

Book Asset Depreciation Entry Automatically

Automatically creates depreciation entries according to the depreciation schedule configured on Assets.

Unlink Advance Payment on Cancellation of Order

Removes links between advance payments and Sales/Purchase Orders when orders are cancelled.

Enable Common Party Accounting

Automatically creates adjustment Journal Entries when the same party exists as both a Customer and Supplier.

Allow Multi-Currency Invoices Against Single Party Account

Allows invoices in multiple currencies while maintaining a single receivable/payable account in company currency.

Create Ledger Entries for Change Amount

Creates accounting entries for change returned during Point of Sale transactions.

Enable Discount Accounting

Allows Discount Accounts to be specified at the item level in Sales Invoices.

Benefits include:

• Separate discount tracking
• Automatic fetching of default discount accounts
• Improved reporting of discount expenses

2. Tax Settings

Determine Address Tax Category From

Choose whether tax categories should be derived from:

• Billing Address
• Shipping Address

Automatically Add Taxes and Charges from Item Tax Template

Automatically populates taxes in transactions when Item Tax Templates are configured on Items.

Book Tax Loss on Early Payment Discount

When enabled, ERPNext separates discount deductions into:

• Income Loss
• Tax Loss

3. Period Closing Settings

Accounts Frozen Till Date

Prevents accounting entries from being created or modified up to a specified date.

Role Allowed to Set Frozen Accounts and Edit Frozen Entries

Users assigned this role can:

• Freeze accounting periods
• Modify entries within frozen periods

Credit Controller

Allows designated users to submit transactions exceeding customer credit limits.

4. Deferred Accounting Settings

Book Deferred Entries Based On

Choose how deferred revenue or expense amounts are recognized.

Days

• Recognition is based on the actual number of days in each month.

Months

• Recognition is distributed equally across months.

Automatically Process Deferred Accounting Entry

When enabled, deferred accounting entries are processed automatically by ERPNext.

Book Deferred Entries Via Journal Entry

Creates deferred accounting transactions using Journal Entries instead of direct ledger postings.

5. Print Settings

Show Inclusive Tax In Print

Displays tax amounts already included in item prices on printed documents.

Show Taxes as Table in Print

Displays taxes in a separate table on printed documents.

Show Payment Schedule in Print

Displays Payment Schedule information generated through Payment Terms.

6. Currency Exchange Settings

Allow Stale Exchange Rates

Controls whether older exchange rates can be used in foreign currency transactions.

When enabled:

• ERPNext uses the latest Currency Exchange record.
• If unavailable, market exchange rates are fetched automatically.

When disabled:

• Only rates within the configured Stale Days limit are used.
• Otherwise, current market rates are fetched.

Stale Days

Defines how old a Currency Exchange rate can be before being considered outdated.

7. Report Settings

Use Custom Cash Flow Format

Allows organizations to create customized Cash Flow Report layouts instead of using the default ERPNext format.

Custom Cash Flow Formats provide greater flexibility for management reporting and statutory reporting requirements.

Related Topics

• Chart of Accounts
• Journal Entry
• Payment Terms
• Asset Depreciation
• Process Deferred Accounting
• Cash Flow Report