DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Sales Tax Error


#1

I have encountered a problem with my sales tax calculation. The tax method is not rounding correctly. I’ve attached a photo

Notice on this invoice, the item total comes to $13.94 before tax. The $13.94 plus 8% sales tax comes to $15.0552. In the US we are required to use the rounding method in a situation like this so the amount should be rounded to $15.06. I know this is only a one cent difference but I have checked across my sales amount and my tax calculation is off which will cause me problems when I report my sale and tax amounts. My question is there any way to correct this problem? I can manually figure it out so I won’t get in trouble but hoping it can be corrected for future use. Since my tax code was not included, I made a custom tax code of 8% which is what is required in my state and county here in the US. I’m still really liking Manager so keep up the great work! If it is something that I can do to personally correct this problem please let me know.


#2

Here is another that it did the same thing to as well.

The total came to $86.61. The amount of $86.61 plus 8% sales tax comes to $93.5388 so it should be rounded to $93.54. I have checked others where the amount came to several decimal places and it did those correctly so I’m not sure what’s going on.


#3

Now here is one that it did correctly

The labor and parts comes to $208.86. Labor here is not taxable so $208.86 minus $135.00 leaves the amount of $73.86 that is taxable. The amount of $73.86 plus 8% sales tax comes to $79.7688 so it would be rounded to $79.77. The labor price of $135.00 plus the amount of taxed parts of $79.77 comes to the correct amount of $214.77. I just wanted to post this one as an example of how it did it correctly but the others I’ve posted it did not.


#4

I encountered the same error with some companies. The problem is not a fault with Manager but rather the fact that different companies calculate the tax in different ways. Manager does the calculation line by line, but some companies do it by the total so the rounding up/down is sometimes off by a cent. I noticed the problem occurred with specific companies that I use. Although I have not had the issue for a few months, but what you need to do is change an item by a penny up or down to get the balances to match accordingly.


#5

Almost all double-entry accounting systems calculate tax amounts per each line item first. There is technical reason for this.

Since you mention you are in USA, you really worry about something that is not an issue. Quickbooks is calculating tax amounts exactly the same way as Manager (that is line by line)


#6

@lubos @dalacor Thanks! I was hoping it was not an error in the system but I could not figure out what was going on with it. I’ve personally never used quickbooks but I’ve been told it is pretty similar to Manager. I came close to using quickbooks but after all the bad feedback I decided to give Manager a try. I’m no accountant but love it so far. Has really helped me in my business and looking to use cloud version soon.


#7

The only similarity between Quickbooks and Manager is that Quickbooks is easy to use compared to other accounting programs. But that is a relative term as Manager is by far easier to use than Quickbooks. The problem with a lot of accounting programs is that they are not designed for business owners to use. They are designed for accountants and are too difficult for business owners to use. This is the reason that Quickbooks and to a lesser extent Sage have been so successful.

However, people are leaving Quickbooks and Sage becauase of all the problems with support, running costs and the attitude of both Quickbooks and Sage Companies. In addition, while Quickbooks and Sage are far easier to use than most accounting programs, they are still relatively difficult to use and they are bloated. This is where Manager really scores - it is lightweight and very simple to use and is in constant development adding new features all the time.

I also nearly went with Quickbooks more because there was a complete absence of anything else suitable and then finally find Manager! :grinning: