diff --git a/main/preload.ts b/main/preload.ts
index 679f62b2a..e0a700e98 100644
--- a/main/preload.ts
+++ b/main/preload.ts
@@ -117,6 +117,13 @@ const ipc = {
     )) as ConfigFilesWithModified[];
   },
 
+  async getDbDefaultPath(companyName: string) {
+    return (await ipcRenderer.invoke(
+      IPC_ACTIONS.GET_DB_DEFAULT_PATH,
+      companyName
+    )) as string;
+  },
+
   async getEnv() {
     return (await ipcRenderer.invoke(IPC_ACTIONS.GET_ENV)) as {
       isDevelopment: boolean;
diff --git a/main/registerIpcMainActionListeners.ts b/main/registerIpcMainActionListeners.ts
index d92e8c628..7194dad0e 100644
--- a/main/registerIpcMainActionListeners.ts
+++ b/main/registerIpcMainActionListeners.ts
@@ -8,7 +8,7 @@ import {
 } from 'electron';
 import { autoUpdater } from 'electron-updater';
 import { constants } from 'fs';
-import fs from 'fs/promises';
+import fs from 'fs-extra';
 import path from 'path';
 import { SelectFileOptions, SelectFileReturn } from 'utils/types';
 import databaseManager from '../backend/database/manager';
@@ -38,6 +38,22 @@ export default function registerIpcMainActionListeners(main: Main) {
     return true;
   });
 
+  ipcMain.handle(
+    IPC_ACTIONS.GET_DB_DEFAULT_PATH,
+    async (_, companyName: string) => {
+      let root = app.getPath('documents');
+      if (main.isDevelopment) {
+        root = 'dbs';
+      }
+
+      const dbsPath = path.join(root, 'Frappe Books');
+      const backupPath = path.join(dbsPath, 'backups');
+      await fs.ensureDir(backupPath);
+
+      return path.join(dbsPath, `${companyName}.books.db`);
+    }
+  );
+
   ipcMain.handle(
     IPC_ACTIONS.GET_OPEN_FILEPATH,
     async (_, options: OpenDialogOptions) => {
diff --git a/src/App.vue b/src/App.vue
index 71fab550d..c40b1b279 100644
--- a/src/App.vue
+++ b/src/App.vue
@@ -19,6 +19,7 @@
     <DatabaseSelector
       v-if="activeScreen === 'DatabaseSelector'"
       ref="databaseSelector"
+      @new-database="newDatabase"
       @file-selected="fileSelected"
     />
     <SetupWizard
@@ -136,7 +137,7 @@ export default defineComponent({
         return;
       }
 
-      await this.fileSelected(lastSelectedFilePath, false);
+      await this.fileSelected(lastSelectedFilePath);
     },
     async setSearcher(): Promise<void> {
       this.searcher = new Search(fyo);
@@ -156,13 +157,11 @@ export default defineComponent({
       await this.setSearcher();
       updateConfigFiles(fyo);
     },
-    async fileSelected(filePath: string, isNew?: boolean): Promise<void> {
+    newDatabase() {
+      this.activeScreen = Screen.SetupWizard;
+    },
+    async fileSelected(filePath: string): Promise<void> {
       fyo.config.set('lastSelectedFilePath', filePath);
-      if (isNew) {
-        this.activeScreen = Screen.SetupWizard;
-        return;
-      }
-
       if (filePath !== ':memory:' && !(await ipc.checkDbAccess(filePath))) {
         await showDialog({
           title: this.t`Cannot open file`,
@@ -183,12 +182,10 @@ export default defineComponent({
       }
     },
     async setupComplete(setupWizardOptions: SetupWizardOptions): Promise<void> {
-      const filePath = fyo.config.get('lastSelectedFilePath');
-      if (typeof filePath !== 'string') {
-        return;
-      }
-
+      const companyName = setupWizardOptions.companyName;
+      const filePath = await ipc.getDbDefaultPath(companyName);
       await setupInstance(filePath, setupWizardOptions, fyo);
+      fyo.config.set('lastSelectedFilePath', filePath);
       await this.setDesk(filePath);
     },
     async showSetupWizardOrDesk(filePath: string): Promise<void> {
diff --git a/src/pages/DatabaseSelector.vue b/src/pages/DatabaseSelector.vue
index b4a0cb894..f4e76bd68 100644
--- a/src/pages/DatabaseSelector.vue
+++ b/src/pages/DatabaseSelector.vue
@@ -260,7 +260,7 @@ export default defineComponent({
     Modal,
     Button,
   },
-  emits: ['file-selected'],
+  emits: ['file-selected', 'new-database'],
   data() {
     return {
       openModal: false,
@@ -363,17 +363,12 @@ export default defineComponent({
         (a, b) => Date.parse(b.modified) - Date.parse(a.modified)
       );
     },
-    async newDatabase() {
+    newDatabase() {
       if (this.creatingDemo) {
         return;
       }
 
-      const { filePath, canceled } = await getSavePath('books', 'db');
-      if (canceled || !filePath) {
-        return;
-      }
-
-      this.emitFileSelected(filePath, true);
+      this.$emit('new-database');
     },
     async existingDatabase() {
       if (this.creatingDemo) {
@@ -390,17 +385,12 @@ export default defineComponent({
 
       this.emitFileSelected(file.dbPath);
     },
-    emitFileSelected(filePath: string, isNew?: boolean) {
+    emitFileSelected(filePath: string) {
       if (!filePath) {
         return;
       }
 
-      if (isNew) {
-        this.$emit('file-selected', filePath, isNew);
-        return;
-      }
-
-      this.$emit('file-selected', filePath, !!isNew);
+      this.$emit('file-selected', filePath);
     },
   },
 });
diff --git a/uitest/index.mjs b/uitest/index.mjs
index ed3c6cb9b..cbeb8c5b7 100644
--- a/uitest/index.mjs
+++ b/uitest/index.mjs
@@ -44,10 +44,6 @@ const appSourcePath = path.join(root, 'dist_electron', 'build', 'main.js');
   });
 
   test('fill setup form', async (t) => {
-    await electronApp.evaluate(({ dialog }, filePath) => {
-      dialog.showSaveDialog = () =>
-        Promise.resolve({ canceled: false, filePath });
-    }, ':memory:');
     await window.getByTestId('create-new-file').click();
     await window.getByTestId('submit-button').waitFor();
 
diff --git a/utils/messages.ts b/utils/messages.ts
index 2f3ec75be..d470556d4 100644
--- a/utils/messages.ts
+++ b/utils/messages.ts
@@ -25,6 +25,7 @@ export enum IPC_ACTIONS {
   GET_DB_LIST = 'get-db-list',
   GET_TEMPLATES = 'get-templates',
   DELETE_FILE = 'delete-file',
+  GET_DB_DEFAULT_PATH = 'get-db-default-path',
   // Database messages
   DB_CREATE = 'db-create',
   DB_CONNECT = 'db-connect',