Multi-company scenario - best practices sought

ERPNext
1

I have a situation here where 2 legal entities in the end share expenses & profits of all business activities divided by 2.

Now I am wondering how to set this up in the best way in ERPNext multi-company setup.
Especially whether there is any need of a hierarchy like the below …


                   Parent Company (no legal entity)

                          /          \
                         /            \
                        /              \
                       /                \

   Child 1 (legal entity)           Child 2 (legal entity)

… or just to have 2 equal companies which (in order to share expenses/income)
issue invoices to each other at the end of each month is sufficient.

If someone would want to share how he/she is doing this I’d be
happy to read some best practices

2

A lot of the best approach here will depend on your accounting standards, but if invoicing between the two companies works from that perspective it should work fine in ERPNext.

We’ve been playing with that set up in some of our testing, and it’s worked fine. You can use document-level permissions to grant some users access to one company but not the other. There are a few quality of life improvements that could be made, but generally it’s worked for us.

3

“that set up” in your sentence is the two equal companies version, not the Parent with 2 Children variant, right?

4

Yes, sorry, that wasn’t clear: they are two equal companies, and there is no parent entity.

In the case we were testing, one company was functionally the parent, but the only way that was realized within ERPNext was which direction the money flowed. Unless you actually have a third company in a legal sense, with separate books and invoices, I don’t think you’d have any reason to create one ERPNext.

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