[GNC] rounding of Invoice vs Accounts Receivable

[Etienne]

In the Bill I enter the amount 109.95, and then select the columns Taxed, Taxes Included and the Tax Table entry. It then calculates both values 18.33 and 91.63, which add up to 109.96 but the total I entered in the first amount column remains at 109.95.

Only when I Post the Bill, I see a 109.96 entry in A/Payable. So the Bill copies the sum of the 2 calculated values to the A/P and not my total entered.

I think for the time being that manual entry in the ledger correcting the 1ct will have to do. Hopefully GNC will have some option down the line for this.

VAT is charged at every stage of the “production process” until the end-consumer. So a lot of reverse tax charges and collected taxes on purchases to offset the VAT on the sale to the end-consumer.
That is why I use tables too, else I need to calculate taxes manually on every bill (as not every bill show taxes, just a “reverse tax charge” text only).
VAT in Europe depends on the country and varies between 19% and 25%.

@Michael, you pay VAT on the total invoice, but both items already have the VAT included on the item line. So the rounding happens at the total level. Else you get too big rounding errors (especially supermarkets when you have 9% categories and 21% items (e.g. rounding a 9% tax on a 49ct can of tomatoes is terrible with a full basket), they have to round on subtotals per tax category.
On 17 Oct 2022, 23:30 +0200, R. Victor Klassen <rvklassen at gmail.com>, wrote:
> We encounter the same problem in jurisdictions with tax computed after. Which is to say this problem is not unique to having tax-in pricing advertised.
>
> Where I see it is in bills where the GnuCash rounding differs from that used by the vendor. And it only happens when there are multiple line items in the bill. GnuCash appears to total tax the taxable items and then round and sum the tax, whereas most vendors hereabouts add the taxable items and then multiply by the tax rate and round. Because the “bill” I create within GnuCash is only for internal use, I add a pair of entries - one taxable and one non-taxable, that balance out the amount in Accounts Payable, while adjusting the amount of VAT paid to match that on the bill from the vendor.
>
> In your case, is it making the invoice have the wrong total, or just your internal Accounts Receivable and/or VAT payable? In the latter case you can make an adjusting transaction to fix it. Ugly, and error prone, but possible. At least it only happens <some> of the time.
>
> > On Oct 17, 2022, at 3:50 PM, Michael or Penny Novack <stepbystepfarm at comcast.net> wrote:
> >
> > On 10/17/2022 11:03 AM, gnucash at boeziek.nl wrote:
> > > Hi,
> > > I created a Sales Tax Table entry of 20%.
> > > When I create an Invoice of EUR 109,95 with tax included and select my Tax table, GNUCash calculates EUR 18,33 tax and EUR 91,63 in net revenue.
> > > My Accounts Receivable however will not increase by EUR 109,95 but by 109,96. So 1 cent difference. (the precise amounts are: sales is EUR 91,625 and tax EUR 18,325 and thus both are rounded up)
> > >
> > > Is there a way to have the tax rounded down (by 0,5cent) so that the total stays EUR 109,95?
> > > I really prefer to have accounts being 0 at the end of a period, instead of all these loose cents adding up (makes reconciliation harder).
> > >
> > > Thanks,
> > > Etienne
> >
> > This is NOT a rounded-up rounded-down issue. It is a when calculated issue if both a set of items and their sum.
> >
> > Rounded (A+B) does not (necessarily) equal (Rounded A) + (Rounded B) And how far the distance can become depends on the number of items involved. If there were a couple dozen items the range of "answers" could vary by several units. The calculation of "fuzz" is a fine art (when a computer program is checking for equality between amounts calculated in different ways the program decides they are equal if the difference between them is less than the "fuzz" -- and I have had to figure what the correct fuzz should be in my days in the cypher mines)
> >
> > SO --- what are the actual tax rules of the jurisdiction? If several items are bought at the same time is the correct VAT the sum of the VAT due for each item or is it the VAT due on the sum of the items?
> >
> > Michael D Novack
> >
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