ERPNext User Manual

A complete end-to-end guide covering every business workflow — from Purchase and Sales to Manufacturing, Finance, HR, and beyond. Follow the steps, use the navigation paths, and run your business smoothly.

Open Source ERP Python / Frappe Multi-Company GST Ready

Modules Covered

10

Purchase · Sales · HR · Finance

Workflow Steps

60+

Documented with nav paths

Master Documents

9

Company to Employee setup

Business Flows

7

End-to-end processes

What is ERPNext?

A free, open-source Enterprise Resource Planning system built on the Frappe framework

🛒

Buying

PO, RFQ, Receipts

📦

Inventory

Stock, Warehouse

💰

Sales

Orders, Invoices

🏭

Manufacturing

BOM, Work Orders

🧾

Accounts

GL, Payable, Receivable

👥

HR & Payroll

Attendance, Salary

ℹ️

Use the sidebar to navigate through each workflow. Every section includes the navigation path, purpose, and key notes for each step.

✅

First time? Start with Master Data Setup before attempting any transaction. Without proper masters (Company, Items, Customers, Suppliers), transactions will fail.

Master Data Setup

Configure all master records before any transaction workflow begins

⚠️

Master data must be set up in the correct sequence. Skipping steps will cause dependency errors in later configuration.

Setup Sequence

1Company

→

2Users & Roles

→

3Warehouse

→

4Item Groups

→

5UOM

→

6Items

→

7Customers

→

8Suppliers

→

9Employees

⬡ Foundation Layer

Company — Setup → Company
Users & Roles — Setup → Users
Warehouse — Stock → Warehouse

⬡ Item Layer

Item Groups — Stock → Item Group
Units of Measure — Setup → UOM
Items — Stock → Item

⬡ Party Layer

Customers — Selling → Customer
Suppliers — Buying → Supplier

⬡ HR Layer

Employees — HR → Employee
Salary Structure — HR → Salary Structure
Leave Types — HR → Leave Type

#	Master	Navigation Path	Key Fields
1	Company	Setup → Company	Name, Currency, Country, Fiscal Year
2	Users & Roles	Setup → User	Email, Role Profile, Module Access
3	Warehouse	Stock → Warehouse	Name, Type, Parent Warehouse
4	Item Groups	Stock → Item Group	Group Name, Parent Group
5	UOM	Setup → UOM	Unit Name (Nos, Kg, Ltr, Box…)
6	Items	Stock → Item	Code, Name, Type, UOM, Rate
7	Customers	Selling → Customer	Name, Group, GSTIN, Credit Limit
8	Suppliers	Buying → Supplier	Name, Group, GSTIN, Payment Terms
9	Employees	HR → Employee	Name, Designation, Department, DOJ

Purchase Workflow

From material request to vendor payment — 7 steps

Step	Document	Navigation	Purpose	Auto-Update
1	Material Request	Buying → Material Request → New	Raise internal request for materials	—
2	Request for Quotation	Buying → Request for Quotation	Invite pricing quotes from suppliers	—
3	Supplier Quotation	Buying → Supplier Quotation	Receive & compare supplier pricing	—
4	Purchase Order	Buying → Purchase Order	Issue approved order to supplier	—
5	Purchase Receipt	Stock → Purchase Receipt	Record material receipt in warehouse	✅ Inventory Updated
6	Purchase Invoice	Buying → Purchase Invoice	Record supplier bill / vendor invoice	✅ Accounts Payable Updated
7	Payment Entry	Accounting → Payment Entry	Make payment to supplier	✅ Vendor Account Settled

Sales Workflow

From lead capture to payment collection — 7 steps

Step	Document	Navigation	Purpose	Auto-Update
1	Lead Creation	CRM → Lead	Capture potential customer inquiry	—
2	Opportunity	CRM → Opportunity	Convert lead to business opportunity	—
3	Quotation	Selling → Quotation	Send commercial proposal to customer	—
4	Sales Order	Selling → Sales Order	Confirm customer order (enables stock reservation)	✅ Stock Reserved
5	Delivery Note	Stock → Delivery Note	Dispatch goods to customer	✅ Inventory Reduced
6	Sales Invoice	Accounts → Sales Invoice	Generate customer tax invoice	✅ Accounts Receivable Updated
7	Payment Entry	Accounting → Payment Entry	Record customer payment received	✅ Outstanding Settled

Inventory Management

Stock entry types, reconciliation and warehouse transfers

Stock Entry Types

Material Receipt

1

Stock Entry

Stock → Stock Entry → New

2

Select Type: Material Receipt

Choose target warehouse

Used when stock is received directly without PO

Material Issue

1

Stock Entry

Stock → Stock Entry → New

2

Select Type: Material Issue

Choose source warehouse

Used for internal consumption / production use

Entry Type	Navigation	Direction	Use Case
Material Receipt	Stock → Stock Entry	IN	Direct stock receipt without Purchase Receipt
Material Issue	Stock → Stock Entry	OUT	Internal consumption, scrap, production
Material Transfer	Stock → Stock Entry	MOVE	Transfer stock between warehouses
Stock Reconciliation	Stock → Stock Reconciliation	ADJUST	Physical stock count adjustment

💡

Run Stock Reconciliation at the end of every month after physical count. It automatically adjusts stock levels and posts a Journal Entry for the difference.

Manufacturing Workflow

From BOM design to finished goods — 6 key steps

Step	Document	Navigation	Purpose	Result
1	BOM Creation	Manufacturing → BOM	Define raw materials & operations for product	Blueprint saved
2	Production Plan	Manufacturing → Production Plan	Plan production quantities based on demand	Material requirements listed
3	Work Order	Manufacturing → Work Order	Authorize the manufacturing process	WO submitted to floor
4	Material Transfer	Work Order → Transfer Materials	Move raw materials to production area	✅ Stock moved
5	Job Card	Manufacturing → Job Card	Track per-operation production activities & time	Labour time recorded
6	Manufacture Entry	Work Order → Finish	Convert raw material into finished goods stock	✅ Finished goods stock updated

Finance Workflow

Accounts Payable, Receivable, Journal Entries and Reconciliation

Receivables Flow

1

Sales Invoice

Accounts → Sales Invoice

Creates AR entry automatically

2

Accounts Receivable

Accounting → AR Ledger

3

Payment Entry

Accounting → Payment Entry

Settles outstanding customer balance

Payables Flow

1

Purchase Invoice

Buying → Purchase Invoice

Creates AP entry automatically

2

Accounts Payable

Accounting → AP Ledger

3

Payment Entry

Accounting → Payment Entry

Settles outstanding vendor balance

Document	Navigation	Purpose
Journal Entry	Accounting → Journal Entry	Manual debit/credit entries → General Ledger
Payment Entry	Accounting → Payment Entry	Bank & cash transactions, bank reconciliation
Bank Reconciliation	Accounting → Bank Reconciliation	Match bank statement with system entries
Trial Balance	Accounting → Trial Balance	View all debit/credit balances
Balance Sheet	Accounting → Balance Sheet	Assets vs Liabilities at a point in time
Profit & Loss	Accounting → Profit and Loss	Revenue and expense summary for period

HR & Payroll Workflow

Employee management, attendance, leave, and monthly payroll

Payroll Process

1Employee

→

2Attendance

→

3Leave Application

→

4Salary Structure

→

5Payroll Entry

→

6Salary Slip

Step	Document	Navigation	Purpose
1	Employee	HR → Employee	Create employee master with designation, department, DOJ
2	Attendance	HR → Attendance	Mark daily present/absent/half-day records
3	Leave Application	HR → Leave Application	Apply and approve employee leaves
4	Salary Structure	HR → Salary Structure	Define earnings and deductions formula
5	Payroll Entry	HR → Payroll Entry	Run monthly payroll for all employees
6	Salary Slip	HR → Salary Slip	Individual payslip with net pay calculation

Other HR Features

Expense Claims

HR → Expense Claim

Employee Transfer

HR → Employee Transfer

Leave Allocation

HR → Leave Allocation

Quality & Asset Management

Inspection workflows and fixed asset lifecycle management

Quality Inspection

1

Purchase Receipt

Trigger quality inspection on receipt

2

Quality Inspection

Quality → Quality Inspection

3

Accept / Reject

Update warehouse accordingly

Types: Incoming · In-process · Final · Vendor QC

Asset Lifecycle

1

Asset Purchase

Purchase Receipt → Asset

2

Asset Creation

Assets → Asset → New

3

Depreciation Schedule

Auto-posted monthly/annually

4

Maintenance / Disposal

Assets → Asset Maintenance

ℹ️

Asset depreciation entries are automatically posted by ERPNext based on the depreciation method (Straight Line or Written Down Value) you configure at asset creation.

Complete Business Lifecycle

End-to-end flow from customer inquiry to financial reporting

🎯

This lifecycle covers the complete ERPNext journey — from the first customer inquiry through production, delivery, invoicing, and financial reporting. Each node is a linked document in ERPNext, so data flows automatically without re-entry.

How are documents linked in ERPNext? ▼

ERPNext uses a document-linking system. When you create a Sales Order, you can then create a Delivery Note directly from it — all item details are auto-populated. This chain continues through to the Sales Invoice and Payment Entry. No data needs to be typed twice.

Can I skip steps in the workflow? ▼

Yes, many steps are optional depending on your business process. For example, if you don't use CRM, you can start directly from Quotation or Sales Order. If you don't need quality inspection, you can skip it. ERPNext is flexible — configure only what you need.

What is the role of "Submit" in ERPNext? ▼

Most transaction documents in ERPNext go through: Draft → Submit → Cancelled. You must Submit a document (e.g. Purchase Order) for it to be legally binding and for downstream documents (Purchase Receipt) to reference it. A submitted document cannot be edited — you must amend it or cancel it.

ERPNext — Overview