Configurable Rounding Method for Tax Calculation
Problem statement:
Difference in rounding method leads to small but problematic differences in tax calculation.
Proposed Solution:
Add a setting to supplier rules and/or item details to configure Dext to use the rounding method used by the supplier.
Context:
I'm seeing frequent cases where the tax calculated by Dext differs by a penny or so from the tax calculated by the retailer on a receipt. This has to be dealt with before publishing. Line items can be edited to solve the problem, but this invariably results in accounting entries that do not match the original document.
These two error messages are generated:
- Line item totals are greater than the item total.
- Line item tax is greater than the item tax.
It's clear that this is happening because the receipt retailer and Dext are using different methods to deal with rounding to the nearest penny for the tax amount, resulting in a total tax amount that is off by a penny or two in either direction.
Dext is using line-item rounding , like this:
- For each line item; apply the tax rate to the line item amount, and then apply rounding rules to that result to get the line item tax amount.
- Then total the line item tax amounts to get the total tax amount.
The receipt retailer (i.e. supplier) is using global rounding, like this:
- Add the line item amounts to get a total net taxable amount.
- Apply the tax rate to the net taxable amount, and then apply rounding rules to that result to get the total tax amount.
A configurable setting on the item and/or the supplier could be toggled to use the same rounding method used by the supplier. This would bring the calculated tax amount back into alignment.
