i totally understand this.
but this rounding expense is forever shown as an expense for us which is unnecessary. the supplier had invoiced us and we need not keep a record of what the supplier might have rounded in the invoice. that expense is something the supplier needs to worry about.
No, if it reduces the invoice total (like a discount does) then it doesnât get paid.
No, the Accounts Payable only needs to know the TOTAL of the invoice, not the breakdown.
Yes, you do need to keep a record of that rounding. Your Purchase Invoice MUST be a direct replica of the Suppliers Sales Invoice. You canât have the two invoices being recorded differently.
my point exactly. it is an exact replica when i am able to replicate the purchase invoice.
what purpose does this provide? the supplier has given me an invoice for say 1000, i recorded an invoice for 999.70 where i need to add the 0.30 to make an exact replica. all i need is a purchase invoice that says i owe my supplier 1000, not an account that shows how i made it to 1000. i do not need it. the supplierâs invoice does not show 0.30 anywhere.
i have suppliersâ invoices where they explicitly show the rounding amount.
in any case, an Expense account called Round off is a far better option.
in case the round off is not explicitly mentioned, Just save the Purchase invoice, see the difference and add/subtract that.
multiple suppliers may have different rules to rounding off, and you cant expect Manager to cater to every method.
so in your case you are maintaining an account which shows the supplierâs profit or loss incurred due to rounding on every invoice they make to you?
a liability to supplier is the total of the invoice value and the tax amount they will file in their tax returns. i just cannot understand the need to maintain a rounding expense account for purchases.
see, the exact cost of inventory purchased is the amount before rounding off and taxes,
and the rounding off is an additional expense/income regarding the purchase.
the total accounts payable is including this round off (+/-), and tax payable is as shown in the invoice.
in all cases, the round off is done after the tax is calculated, and so there isnt really any other option but to show an additional account.
even if Manager implemented the rounding off in purchase invoices, it would still need an account for that, the 0.49 cant vanish or arrive from thin air.
It doesnât have to be a specific âroundingâ account, you can use any account to suit.
it is indeed needed feature. some suppliers create the invoice with rounding off option and some donât.
if supplier uses this feature in his invoice then the invoice individual will create have a difference as manager calculates the total plus tax amount on unit charges @lubos