Use Multi-company or Cost Center approach for Parent Business with multiple brands


I want to look for the best approach to implement ERPNext in our business

I have a One Registered Taxable Business. Like a parent company for consolidation.

But we have multiple business models that we work on it like brands, this brands are registered as assets under the parent so our customers make business with us like brands but the invoice is from the parent:

Parent Company:

  1. Beauty products(Selling Fragrances and clothing)
    We manufacture the clothing
    We Import from USA the fragrances

  2. Electronics products(Selling Products)
    We Import from USA the products

  3. Software development(Sell services)
    We outsource software development

  4. Import and Customs Services(Sell services)
    We provide a service of merchandise importing from USA to our country with fixed prices
    We only have 1 bank account for all our transactions

My idea is to use Multicompany approach or a Profit/Cost Center

Our Parent company actually is the one responsible to manage:

  • Human Resources
  • Payroll
  • Assets
    • Even if an asset has been purchased to use on one brand
  • Expenses
    • Advertising expenses on each brand.

Our brands manage his own:

  • Inventory(If exists)
  • Customer information
  • Invoicing

So im looking for a practical approach, but Iā€™m mainly interested on have my accounting properly

Thanks for any help,
Best regards,
Jeans K. Real

If you have only one legal entity (Company) then you should not go for multi-company set up, you should try to use cost center.

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Multi company approach would mean 2 payrolls, 2 employees sets etc. Might make your life complicated in the future.
Especially if people or products transfer between these brands. Using 1 company and different brand segment + cost center might be relatively easier.

Another suggestion is not to engineer all the details from day-1. First implement general process, and then manage the changes slowly as you learn. Look for 6months to 12 months horizon of change management.


Best practice to match books to legal entity. Since you have one legal entity I would choose Profit/Cost Center.

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