I’ve seen a lot of discussion about invoices and tax rounding issues but I couldn’t see anything that applies to my issue.
If I purchase something on Amazon and create a purchase invoice, when I select the “Tax Code” from the dropdown for each item, Manager makes the tax calculations and every so often a purchase invoice’s (tax) totals will not match the invoice total and there is a difference of 1-2 cents. When I pay the invoice based on the total charged to our credit card, the difference shows up in Liabilities as an amount owing and then in Purchase Invoices, the invoice shows as being “overdue” for the small amount.
Am I the only one having this problem or is there a workaround or fix?
Contrary to what you say, @noopykat, there have been many forum discussions of exactly your issue. Searching the forum for “tax rounding purchase invoice” generates over 50 responses (and that is just where the software stops counting). Granted, not every one of those is directly on point, but many are.
Your problem is inevitable due to variations in rounding and calculation processes in different systems. You will need to choose one of the methods for dealing with it that has already been discussed and learn to live with it. Understand that this is not unique to Manager, and tax authorities have encounter the issue thousands of times, which is why reported figures themselves are often rounded.
enter invoices tax inclusive so the totals match exactly.
read you tax authorities rounding requirements and comply with those. In Australia the rounding method is clearly specified including acknowledging the rounding on the supplies records does not need to be identical to the customers records as long as both comply with the tax authorities requirements.
Pay the tax as calculated in Manager, with rounding required by your tax authority.
@Tut I did find some solutions but I thought there might have been something easier than having to go through and “fudge” the numbers when I ran into this with an invoice. I do wish that companies like Amazon would include the total taxes on each line item but that isn’t the case.
IMO, it seems like there are different rounding methods depending on the company however, the way in which Manager handles it is the way I expect it to work.
Don’t forget that @Patch operates in a VAT regime where input tax is fully recoverable (offsettable against output tax). That may or may not be true in your jurisdiction. If input tax is not offsettable, don’t use tax codes on purchases at all. Just include tax in the unit price. Then there is no issue to begin with.
in my jusrisdiction we can offset the purchase tax with the sales tax meaning purchases are tax credits.
so i just created a 100% tax code to enter the rounding differences. this keeps my tax liability account in tally with my tax authorities automatically.
additional line on the purchase invoice for the rounding difference
