G’day @Brucanna, I have just spent some time searching for this since this is my new hot topic for the moment.
As I hope everyone appreciates, I have grown to LOVE manager and I love the fact manager does it line-by-line. Most of my suppliers do.
But some don’t!
As I recently mentioned in another post, I have a multi-national company operating in Australia who do it on the invoice total (well, for only those items that incur GST. It is a very sad invoice indeed). What makes it worse is that some line items don’t have GST and others do and some prices I get from them are ex-GST and quoted to me as such, and others the GST is calculated on a GST inclusive price (so it works backwards). It’s a VERY painful invoice when it comes time to enter it.
Short version: I HAVE to enter the invoice NOT “tax inclusive” (since some items are ex-GST price, and if I ADD GST line-by-line the calculation is incorrect) and have some lines that ARE “tax inclusive”, so I have to manually work it out and add it myself (I possibly said those the wrong way around there). Point is, their invoicing is a right royal pain in the butt! And I’m forever $0.01 out on the GST calculation.
Back to your point that “those who are calculating tax on the sub-total are not tax law compliant”:
about a week ago I went searching for this exact reference within the ATO website. I didn’t think to bookmark it and the closest I can find at the moment is this (this refers to a pdf I did find from the ATO, but it does not appear in my search history, which sux, because this was the title exactly as it appeared on the document “certainty for business in gst calculations and rounding”:
Now I’m not sure if this is still current, and I’d like for anyone to prove that it’s not, because I’ll hand deliver the relevant ATO documentation to them personally.
My point being, and as far as I can tell, just because someone doesn’t caluclate the GST line-by-line, doesn’t necessarily make them non tax compliant.
If you can find me any reference that specifically says otherwise I would be most appreciative. I have more than one supplier I could send this too 
@lubos, I think @anony253’s suggestion of having a “calculate tax on sub-total” option per invoice may in fact (mostly) solve this problem, especially in jurisdictions that do allow either method of calculation, like Australia.