Rounding differences in tax amounts may arise due to different tax calculation methods between Perk and suppliers. For example, Perk calculates tax at line item level and then adds up the tax amounts to derive the total tax amount for the invoice. However, some suppliers may calculate tax directly at invoice level, bypassing line item calculations.
This discrepancy can lead to rounding differences between the total gross amount for tax calculated by Perk (line item total) and the total gross amount stated on the invoice, as extracted in the invoice header. Since posted invoices must exactly match the invoice received from the supplier, any minor differences may cause problems with suppliers, tax authorities, auditors.
You can configure Perk to perform optimized rounding on tax amounts in line items.
Once enabled, the calculation is applied to all extracted invoice line items during invoice upload.
Applying optimized rounding to line items
With optimized rounding, Perk rounds the tax amount based on the value of the third decimal. This adjustment ensures that any rounding discrepancies are carried forward and accounted for in the subsequent line items.
Line items with the same tax percent are handled as a group, with each item rounded individually within its respective tax percent group.
For example, Supplier A submits an invoice for a net amount of EUR 168.69, tax rate of 5%, a total tax amount of 8.43, and a total invoice amount of 177.12.
The invoice contains two line items, which cause a discrepancy of EUR 0.01 in the tax amount (and hence the invoice total amount):
| Line no. | Net amount | Tax rate | Line item tax amount | Line item total with tax |
|---|---|---|---|---|
| 1 | 113.51 | 5% | 5.68 | 1119.19 |
| 2 | 55.18 | 5% | 2.76 | 57.94 |
| Total | 168.69 | 8.44 | 177.13 |
With optimized rounding, Perk calculates the tax amount without rounding and adjusts the line items to result in a tax amount that matches the extracted tax amount. By applying the stored adjustment to the next line before rounding the tax, Perk maintains consistency and accuracy across all line items, ultimately minimizing rounding differences at the invoice level.
| Line no. | Net amount | Tax rate | Calculated tax amount before rounding | Applied adjustment amount | Rounded tax amount | Adjustment value |
|---|---|---|---|---|---|---|
| 1 | 113.51 | 5% | 5.6755 | 0.000 | 5.68 | +0.005 |
| 2 | 55.18 | 5% | 2.759 | -0.005 | 2.75 | |
| Total | 168.69 | 8.4345 | 8.43 |
If you update any amount-related data in the line items, the standard amount calculation (i.e. no optimized rounding) is applied to that line. Other line items are not changed.
If a discrepancy between the line item tax amounts and the extracted tax amount remains after applying optimized rounding or if a difference is introduced by manually adjusting a line item, an amount mismatch message is displayed.
Caution: By applying optimized rounding, one or multiple line items may not comply with the formula: Net × Tax rate% = Tax amount.
Make sure that your finance system does not use either the net amount or the tax rate to calculate tax amounts. If it does, then optimized rounding is not compatible.
Enabling optimized rounding
To set up optimized rounding for all invoices in the company:
- Go to Settings > Supplier invoices > Invoice settings.
- In the Tax settings section, select Apply optimized tax rounding to invoices.
- Click Save.