Yes, in part, but that forum topic also strayed into other issues.
Your problem stems from the fact that Manager (like virtually all accounting programs) calculates taxes line item by line item, then sums them up, then rounds to displayed precision. Your spreadsheet no doubt sums them up, then calculates tax, then rounds. The reason your last test matches the spreadsheet is that in both cases there was only one tax calculation for each tax. The potential accumulated difference between the methods grows with more line items, but both ways would be accepted by tax authorities. If you were to enter many invoices, some would probably differ slightly in one direction, some in another, possibly coming out even. I suspect the only reason you even noticed is that every entry in your sales invoices happens to differ in exactly the same way. Even so, your biggest difference is .00046% at the bottom line.
Note–and this is important for tax audits–that your books will balance perfectly if you use Manager’s method. No-one is going to run alternate calculations and argue about 3 cents. Your accounts will not be the first time an auditor has encountered this.
Your solution is not good accounting, @Isaac.Abouganem. While the amount is small, it misstates your income and will make it impossible to reconcile the cash account. You have entered a transaction that did not occur.
I did that because with time will add up and what is in Manager cash account do not match with that is actually in the bank.
I know the term “cash count” does not exist or is contemplated in the accounting system. I know if this were a negative balance for me, for example I would put it in account 659 “Other current operating losses”. But since is a positive one, I put it in the mirror account in group 75 “extraordinary income”.
I’m not an accountant at all, so any tip is greatly appreciated. What is the correct way to equal Manager’s cash account and the bank account?
What I am telling you, @Isaac.Abouganem, is that you should issue a sales invoice with the tax amount as calculated by Manager. Your customer will pay you the amount invoiced. You will receive it into Manager as a deposit to a cash account. Everything will match. You will have no extraordinary income, no other current operating losses, no imbalances, no unpaid balance due on invoices, and no errors.
You seem to be fixated on the fact that two perfectly acceptable calculation approaches sometimes produce very small differences in the calculated tax amounts. You should put this worry aside. Why is it that you think there is a disparity between Manager and the bank account?
That is what i’m doing from day one. I’m using Manager’s invoice and send it to the customer. I also have to pay some insurance that is deducted. So here is the math.
But this the amount that was deposited in the bank. The actual total with those 2 deductions sent by the client
What was deposited in the bank $6,322.61 does not match Manager $6,322.59 and the difference is $0.02 which you can see in my previous post as a “Cash Count” transaction.
But if you do the whole math, as you said, summing up and calculate tax and then round (Excel or Calc). (I’m guessing the client is imputing my invoice in that way).
This statement is confusing. You say you have to pay the insurance. But your example suggests the two insurance amounts are deducted by the customer before payment. Which is it?
If you are paying the insurance, the receipt from the customer should be for the full amount invoiced. If not, the invoice was paid incorrectly by the customer, and that problem must be worked out separately. The insurance payments should go on a payment voucher reflecting the transaction in proper fashion, that is, showing who the amounts were paid to and being allocated to appropriate expense accounts.
If the customer is deducting the insurance, they have still paid incorrectly. You have used (with Manager) a valid calculation method. Nothing gives the customer the right to arbitrarily compute taxes you are required to collect on behalf of the government. That is the issue to work out, not a process for constantly adding or subtracting a few cents at customers’ whims.
Apparently, someone at your customer is checking the calculations with a spreadsheet or calculator. I would guess that if they entered your sales into their accounting program on a line by line basis as you have billed them, they would obtain the same result as Manager. Or you could stop billing based on individual time entries, instead entering a single, lumped amount for the invoice period.
My message–and I promise this is the last time I will say it–is that fake transactions in Manager to adjust for differences in calculation procedures (not errors or disputes over charges) are not the answer.
Insurance is being deducted by the customer from the amount in the invoice. (Which is reflected in Manager by marking the transactions in the proper categories).
I agreed with you, if they process my invoice directly where will be no issue. But i have to log the time in their SAP, so yes, is 2 different accounting system.
At the end, the important point is that is not a bug is a expected behavior of the software.
I will change the invoice to a single amount.
Thank you from your time, advice and quick response. Really greatly appreciated.
Booking the difference of 0,02 as a cash-transaction is not the correct way, because there is no (petty) cash involved.
When you want to book the difference in a correct way, then you book as a bank deposit the total of your invoice and as a bankwithdrawal or disposal, on a separate/extra line the difference of 0,02 on an general expense-account.
