Price rounding problem

General Information about POS Pizza 6 and 7
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Price rounding problem

Postby bambinou » Fri Nov 22, 2013 10:02 am

Hi All,

I am having a real problem with the way the software is rounding the numbers

I have 3 products:

Gross price V.A.T charged Price excluding V.A.T
Product 1 €9.50 €1.45 €8.05
Product 2 €8.50 €1.30 €7.20
Product 3 €7.00 €1.07 €5.93

The software cannot show the V.A.T inclusive of the prices but instead shows the prices excluding the V.A.T this is one little problem, so I added the gross price in the descriptions instead.

Now my next a biggest problem is the way the software deals with rounding.
If you add product 1 + Product 2 + Product 3 Excluding V.A.T price, it should be:
8.05 + 7.20 + 5.93 = €21.18

Now if you add the V.A.T on it which is:
1.45 + 1.30 + 1.07 = €3.82

Now adding both together, the total should be:
€25

But your software shows €24.99

Do you have a solution for this please?

Thank you,

Regards,

Ben

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Re: Price rounding problem

Postby Scott » Sat Nov 23, 2013 10:24 am

It is quite normal to have individually priced items round differently than groups of items. The items are all subtotaled first, and then the tax applied to that subtotal.

so if you had a 6% sales tax and an item that sells for .46 you would get.

1 item .46 + .03 tax = .49

2 items .46*2 = .92 + .06 tax = .98

3 items .46*3 = 1.38 + .08 (not .09) = 1.46 instead of the expected 1.47 (.49 * 3).

This is because at the tax rate the following subtotals generate the following tax amounts;

6% of .46 = 0.0276 which rounds up to .03

6% of .92 = 0.0552 which rounds up to .06

6% of 1.38 = 0.0828 which rounds down to .08 (instead of up to .09)


POS Pizza uses standard "bankers rounding".


One thing you can do to try to counter this if you want each item is either include the tax in the item always, or use a slightly higher tax rate than what you have. So if your tax rate ws 6% you could try using 6.05% or 6.04% and testing it until you get the mostly desired effect.


Scott

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Re: Price rounding problem

Postby bambinou » Sat Nov 23, 2013 5:04 pm

Hi Scott,

As always thank you for your great advice. I will give it a try on Monday to see how it goes by adding the tax slightly higher.

Thanks again.

Regards,

Ben

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Re: Price rounding problem

Postby bambinou » Mon Nov 25, 2013 6:52 am

Hi Scott,

Setting the V.A.T to 18.02 seems to have sorted the problem.

Thank you!

Ben

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Re: Price rounding problem

Postby bambinou » Mon Nov 25, 2013 1:33 pm

Hi Scott,

I thought adjusting the .V.A.t would work but it only works on small orders, as soon as you rack up the price, the rounded is being seen even more.

Now, regarding your solution about adding the prices with the V.A.T included, what will happen on the website ordering system?
I was thinking, the prices right now are all exclusive of Tax, but then again, it seems that on the website, the customers will see the prices with the tax excluded which is wrong as customers must be able to see the total including tax during the purchase and not at the end.

Please let me know how the website ordering will behave if all the prices have been added without tax.


Thank you,

Ben

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Re: Price rounding problem

Postby Scott » Mon Nov 25, 2013 4:32 pm

The only side effect of including the tax in the price of each item would be that taxes would not be separated out by the system for reporting. You would have to calculate the taxes manually if you needed any type of reporting.

The online ordering will see the items just like the main POS does. So if you disable all sales taxes on your items, and then include the taxes directly in the price of the item, the online ordering will see it that way too. You can remove the Tax: x.xx column from the HTML so that it doesn't show a 0.00 tax in the cart page.


Scott

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Re: Price rounding problem

Postby bambinou » Mon Nov 25, 2013 5:13 pm

Hi Scott,

In fact our main problem is that your software has to have the Prices excluding of V.A.T rather than inputting the price as a gross price which your system could calculate back to get the net price.
I have tested a lot of POS systems the last 12 months and many have this feature of adding the price directly with the V.A.T(Gross) so it could then calculate backward the net from the Gross at the checkout. I think this method is far better so you never get it wrong.
Will you ever change this please? As it cannot work for EU companies this way. Changing the V.A.T amount for 18.02% for example would be illegal for us. It will also show on the customer's receipt that we are charging more.
If you think about it, the last thing you want is calculating individual V.A.T operations per groups of items, the V.A.T should only be applicable to the whole price at the checkout, this removes all possible mistakes.
I see this as a major problem and right now we have no idea on how to get around this. The V.A.T cannot be adjusted and if we include the V.A.T to the price, we will void all our reports as you explained.

Thank you,

Ben

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Re: Price rounding problem

Postby Scott » Tue Nov 26, 2013 10:05 am

That would not be a simple change since it would involve complete restructuring the internal data and objects. We currently have quite a few customers in the EU using the system, and many have been doing so for years. This is the first time that we have heard the suggestion of putting in prices with taxes built in and having the system work backward to calculate the price + tax amounts. We have had our tax structure like this for over 13 years and not one person has asked for it to be done that way.

It won't be a quick change, so if it ever does get done it will have to be during a major upgrade and not just an update. These types of upgrades involve data conversions for all current users, and major changes to the internal structures.


Scott

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Re: Price rounding problem

Postby bambinou » Tue Nov 26, 2013 1:20 pm

Hi Scott,

Thank you for the reply.
I have no idea how the others do it to be honest, they will have to change their V.A.T base rate which is not allowed in EU.

I have now inputted all the prices with the V.A.T included and disabled the software Sale tax, that's the only way but I will lose many of the reports.

Regarding adding the gross price and have the system working out the net price is actually very common in all the online cloud POS systems of nowadays, when you think about it, it makes life easier for the person who inputs all the prices as he can do it directly from the menu and does not need to ask the accounting department all the net prices for 200-300 items. I give you a simple example, because we have added all our prices with V.A.T excluded first, the staff cannot tell the customer the real price on the phone while being on the front screen of the POS. Some customers may ask on the phone, "could you please read back the bill and the different prices", but as it was set, all the prices were all excluding of V.A.T so it was impossible. We then added descriptions but because some of our products have long names, the price at the end was cut in the selective POS menu an putting the prices at the front would have destroyed the sorting order of the products.
We really tried everything and the last option was to add the Gross price and forget about the report.

I also totally understand your point about the huge amount of work needed to have this implemented, this is why we will try to work around it instead and keep this software only for record keeping (and clock in and out software)and not actually as a V.A.T capable POS that can give fiscal receipts to our customers. We will have to buy another V.A.T printer and input everything again by hand after each purchase.

Thank you for your support.

Regards,

Ben

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Re: Price rounding problem

Postby Scott » Fri Nov 29, 2013 10:18 am

In US and Canadian based tax systems the sales tax is applied to the taxable total of the order. This is how the system was designed to work, so working from the total back on each item wouldn't be hard until you did something like applied a global discount to the entire order. Allowing for all of these possibilities would require redesigning the database to hold additional information for each item, which would be the reason that conversions, and low-level changes would need to be made. That isn't something that can be done in a day or two. A report for taxes that works backwards on all items equally would be doable, but the other stuff would need to wait until a major upgrade, if at all.

Quite honestly keeping up with the US laws is hard enough for us on its own, so I really have doubts that we will do fiscal printing for the EU or Australia (I think they do something similar). We are currently 3 months behind because PCI suddenly decided to change some more laws that had a direct effect on our software. Our programming schedule is basically full until about next July now. We are also now having to deal with about a dozen states that now added state-level PCI laws. We simply can't follow every regions laws and keep our prices where they are.

It sounds like what you are doing now is probably the best way. Maybe you can take your daily totals and input them into a spreadsheet that will do tax reporting for you.


Scott

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Re: Price rounding problem

Postby bambinou » Fri Nov 29, 2013 2:25 pm

Hi Scott,

Thank you for your reply.
No worry, we understand your point and your business model, this is why we will still use it and try to go around certain difficulties ourselves by creating a secondary software that will help us fill up the missing data. Your software is already incredible as it is, I can tell you that yours with it's functionality is way above anything I have tested the last 12 months.

Thank you,

Regards,

Ben

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