 # Wrong VAT amount being calculated

I am very grateful that I found Manager for the accounting of our Yogalessons. It saves so much time, I really enjoy working with it.

Now I came across something weird however.

It seems that the program is calculating a wrong number when calculating my 21% vat over a figure of €247.50. The outcome is €299.52 but it should be €299.48. The amount that’s is being calculated consists of 9 lines €27,50 each. What I think the program does is calculate the VAT amount over each line and makes that a 2 decimal answer. In which it rounds up the actual €33,275 to 33,28.

At the end of the invoice that adds up to a 4 cent increase in the invoice outcome.

Can this be solved by giving more decimals in the outcome for each line? For I have a lot of clients who specifically want to see the details for each line instead of an add up with the same figure.

Yes, Manager does calculate tax as per each line item individually. But this is standard and almost every accounting software does it this way. As far as I know, all tax authorities accept and recognize this calculation method.

Why is this a problem?

Well i’ve had it a couple of times now that people paid the invoice by I think submitting the vat free total sum of the invoice into their accounting software and thus paying me instead of the whole sum the €-0,04 figure. Which leaves me with a shortage on income… but thinking about it myself I’d probably do it myself that way.

Wouldn’t it be more logical to calculate with the sum of each line not rounded off? Or is it just me thinking that?

One way you could make your customers pay you correct amount is to simply give them invoices where amounts on line items are tax inclusive. Tick the box `Amounts are tax inclusive` when creating invoice.

Or if your invoice consists of 9 lines of 27,50 each, why not use 27,50 as unit price and enter 9 into quantity column. Then you end up with single line item so you won’t have this rounding issue.

Manager will be always calculating and rounding tax amounts on line item level. It’s important for rounding to occur at that step to make sure all reports adhere to double-entry accounting principles without showing excessive number of decimals. This is reason why almost every accounting system does rounding at line item level. There is no way around that.

Ok thanks for the quick response, it makes it clear why it works this way and I’ll simply work my way around it using your suggestions.

The program is really very nice. but I have a problem with the calculation of VAT.
See the Purchase Invoice. The VAT should be 3,87 and not 3,86, it happens all the time, please fix it

Each line is calculated & rounded individually and then added up, the sub-total is not used for VAT.

5.25 x .24 = 1.26 (1.2600)
8.06 x .24 = 1.93 (1.9344)
2.80 x .24 = 0.67 (0.6720)

Total = 3.86

Or to put it another way, if each item was on a separate Invoice, the VAT on the three Invoices would total 3.86

Thank you for the explanation

I have some similer problem find just a one day before. I attached the photo for the refrence. There are 0.02 points mistake in calculation. Sub-total amount is 1350.00 And if we calculate 12.5% tax on it… its must be 168.75. But software display 168.76 similarly in 2.5% VAT calculation.

You do not calculate VAT on Sub-total figures - you calculate VAT per line item rounded then added up. Please check out the calculation example in 3 post earlier

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Ok Thanks, I understand the software calculation mathod.