Allow Account Creation Against Child Company - What does it do?

Hi community,

In the Company doc, there’s a checkbox field named “Allow Account Creation Against Child Company”, could anyone explain the function of this?

Thank you.


Usually creation of an account in a child company is only possible if it added in the parent company. In case this checkbox is checked in the child company, the system will allow you to create account in the child company without creating the same in the parent company.

Hope this helps.

Hi Michelle, thank you for your help.

@michelle could you please explain with some example. I can’t understand what this function actually does.
Thanks in advance.


So you can create multiple companies in ERPNext, right? If these companies have parent-child relationship as shown below, the Chart of Accounts of the parent company gets copied in the child company.

For example, Unico Plastics is the parent of M. A. Tech. So the chart of accounts of M. A. Tech will be same as that of Unico Plastics. In case I need to add any new account in M. A Tech, I will have to first add it in Unico Plastics and then it will get created automatically in M. A. Tech.

If the “Allow Account Creation Against Child Company” in child company is checked, it will directly allow you to create an account in child company without creating an account in the parent company first.

Hope this helps.

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@michelle Thanks for your clear explanation.What is the implication of the account created directly in the child-company without being created in the parent-company has on consolidation? Will such accounts get consolidated?
Edit: I have tested it and discovered that such account can never consolidate in the parent company.
My question then is what is the use of creating such account if it cannot be consolidated. I would love to know the use case please. Thanks

Hi @Fred1,

Yes, as you said, such accounts cannot be consolidated as there exists no such account at the parent company level. Hence, it is advisable to create an account in the parent company first and then have it copied in the child company. The checkbox however lets you create a company at the child level (without it being present at the parent level) in cases where it has nothing to do with the parent company, but the account is specifically used in the child company only.

However, it’s best to create the account at the parent level first. Though no balance will be shown at the parent level, it will help during consolidation.

Hope this helps.


@michelle Deeply appreciate your response.But if you create such account.It will hinder consolidation because the system will complain that the account is not in the parent company.
Currently creating chart of accounts for a group of companies that are not into similar business (and in real life group of companies will not be doing similar things) is a big problem.Because accounts created from the parent company are replicated in all subsidiaries whether needed in one subsidiary or not.Someone has raised the issue of mapping accounts of subsidiary to the parent company as a solution to this pain point.Do help to look at this direction.Thanks

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Hi @michelle

Trust you’re doing well. Is there any solution in the works for the issue highlighted by @Fred1 above ?

Kind regards,

There is an error in one company. When I am trying to add child under the company in chart of accounts, there is no option for ADD CHILD. I am also sharing an Image for reference. How can we resolve the issue?


And one more thing, there is a parent company, in which ADD CHILD is not showing. Please look into the image below:-


Hi, Where is the option of "Allow Account Creation Against Child Company” in company settings?

You can find it under Account Settings, on the Company detail page. See attached screenshot!