Why is there a rounding difference between Promotional Office and my Sage 50/200 system?
So this is a long-standing “issue” with Sage50 itself and its method of VAT calculation.
(I found an article here from 2011 that goes into these rounding differences)
Sage50 has decided that it will take the net total price of a single invoice line, (round this off to 2 decimals) then calculate VAT off of it and then also round the VAT total off to 2 decimal places. It then repeats this for every line on the invoice.
Promotional Office does not do that, as specific to our industry, products are often priced up to 4 decimal places. This means rounding is often inevitable.
Therefore, it takes the complete net total of all lines (rounds this to 2 decimals) and then applies the relevant VAT. Thus, minimizing VAT rounding issues.
Here is an example that does not work well in Sage50:
If I would sell 50 different product lines each at £0.02 and would apply VAT per each line and then round to 2 decimals: 0.02 X 20% = £0.004 => rounded to 0.00 VAT per line. Each line is separately calculated so the VAT total for the invoice is 50 x 0.00 = 0.
Within Promotional Office it would first add all the net pricing together: 50 X 0.02 = £1 and then it would apply Vat: £1 x 20% = £0.20
Sage50 is fully aware of this, and even has the same “issue” within their own software:
here is an article off of their own website explaining why there is a possibility for a couple of p difference between a Sage Sales Order and an Sage Invoice.
Apparently the only “solution” sage offers for this is within their sage200 package, where there is a setting to use gross instead of nett. (thus calculating VAT backward from the gross value, so that the total value never changes)
We at Promotional Office have found a way to get around this conflict by creating a single line import into sage, rather than importing each product line individually it will import the invoice as a singular value and prevent the rounding inconsistency within sage.