Round off Tax Totals on Sales Order

When you see few minor differences in the total tax values for Purchase or Sales Order, this is normally due to rounding off of values per line, which is a general practice to accurately compute actual taxes per entry. Some businesses calculate the total value of all the lines, and apply the tax to the total.

TradeGecko's standard system is to calculate the tax PER LINE, rounded off, then add all the values to get the total. This is generally accepted method is also used by multiple accounting softwares like Xero. If you have integrated your TradeGecko's account with Xero, you can be assured of consistency across both platforms.

Example:

Instance A: Getting the total of all lines before calculating the tax

Line 1: Product A Total $ without Tax is 94.50

Line 2: Product B Total $ without Tax is 94.50

Line 3: Product C Total $ without Tax is 17.25

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TOTAL VALUE BEFORE TAX is 206.25

7% TAX should then be 14.4375 or 14.44

Instance B: Standard TradeGecko's Calculation of Tax PER LINE

Line 1: Product A Total $ without Tax is 94.50, 7% Tax is 6.615, round off to 6.62

Line 2: Product B Total $ without Tax is 94.50, 7% Tax is 6.615, round off to 6.62

Line 3: Product C Total $ without Tax is 17.25, 7% Tax is 1.207, round off to 1.21

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TOTAL TAX for all the lines is 14.45 (value reflected on the actual system)

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