Rounding off problem.

[Abhinav]

Hi Michael...

On Tuesday 25 Mar 2008 1:35:44 am you wrote:
> Oddly enough, pretty difficult to implement. Since it seems that it 
> would be easy, I will explain the issue (back when I did this for a 
> living, often had to compute or correct a less experienced
> programmer's "fuzz" value).

Thanks a lot for taking time out to explain this so well. Let me explain
why exactly we need to round off specific figures.

When we invoice a customer, there are two components for that invoice.
One is the income component and other is, say, a service tax component.
The service tax is a percentage of what we are invoicing the customer
and is usually a decimal percentage of the income. For example, at the
moment, in India the service tax rates are 12.25% of the invoice amount.

So if we invoice a customers for Rs 40,000, the tax amount (at 12.25% of
this) is Rs 4,900. Hence the full invoice amount is Rs 44,900. We expect
this amount from the customers.

Now in India there are further laws which state that if you pay a vendor
more than X amount in a year you need to deduct income at source before
paying the vendor. The amount of tax to be deducted at source varies on
the type of service and vendor. When customer customers pay us, they
hardly ever pay the full amount above. They will deduct tax at source
based on the stipulated rate and pay us the resulting amount. The tax
percentage to be deducted at source for contractors (for, say, software
development) is 2.091%. For the above bill amount, the customer will
hence deduct Rs 938.86 at source and pay us the remaining amount.

Most of the times, they will round-off the payment they make to us. In
the above example, they will usually deduct Rs 939 and pay us the rest
of the money. The software they use for calculating such tax lets them
do such round-offs.

The problem arises because when Gnucash calculates receivables from the
customer it does so on the exact amount as calculated based on the tax
percentages above. While we are able to split the invoice amount
properly across tax payable and tax receivables, we always have problems
re-coinciling the figures that customers round off while paying us.

Based on the funds that we actually receive from customers, Gnucash will
either show a few tenths of the currency payable to us or by us.

So to rephrase my earlier question: Its not so much about Gnucash
rounding off figures (sorry for my misleading question) as about
re-coinciling rounding off done by others while dealing with payments.
In fact, even we round off amounts while paying to other vendors.

Would there be a way to take care of balancing such amounts?

Thanks a lot for your rely...

Regards, Abhinav.