How to fix 'local account not allowed' when adding Managed Accounts in SharePoint 2013

Problem

If you add a new Managed Account in SharePoint that is a local account rather than a domain account then you will see the following error message.

The specified user 'accountname ' is a local account. Local accounts should only be used in stand alone mode.

Sometimes you need to use a local account and you can get around this error message using the following PowerShell commands.

Solution

1. Right click on SharePoint 2013 Management Shell > Run as Administrator
2. In the PowerShell window - type: $cred = Get-Credential
3. When prompted to enter an account and password type in a local account credentials
4. Back in the PowerShell window - type: New-SPManagedAccount -Credential $cred
5. You will see the following warning however the account will have been added successfully 

WARNING: The specified user "ServerName\Account" is a local account.  Local accounts should only be used in stand alone mode.

You can check this has worked in Central Admin > Security > Configure Managed Account