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Community Contributor **

Incorrect VAT - rounding error?

Hi

 

A small but irritating problem - I created an invoice but QB has added VAT of 1p less than expected.  I suspect this is either because it's rounding down or truncating the amount at two decimal places.   (I get the amount I expect if I work it out it on a calculator or in Excel).

 

However, this has just resulted in my customer rejecting a large invoice because the VAT on it doesn't match what their system says it should be!

 

Obviously I can adjust the figure manually but surely that isn't what QB is all about ..... ?

 

Thanks

SueB

23 REPLIES 23
QuickBooks Team

Re: Incorrect VAT - rounding error?

Hello SueB3,

 

Welcome to the Community.

 

I can confirm that QuickBooks will be rounding down the transaction in question. We have had some feedback for this aspect of QuickBooks Online but this is how the system has been developed, the only thing I could suggest would be to leave Feedback through the Cog Wheel in the top right of your QuickBooks. This will then go to our Product development team which could result in changes made.

 

Please let us know if there is anything else we can help with.

Community Contributor **

Re: Incorrect VAT - rounding error?

Hi Edward

 

So let me get this straight, QB will round down even when that is mathematically incorrect?  In this instance I have, the amount is £44.968 to three decimal places.  Therefore, following the accepted rules of rounding, it should be rounded UP to £44.97 (as the third DP is greater than 5).

 

Are you therefore telling me "that's how it works - nothing we can do"?  Even though it's wrong?   This is just bad design and lack of basic maths.

 

So how do I get round it?  Do I have to manually calculate the VAT in case QB can't get it right, then manually adjust the figure if necessary?

 

Sorry, just not good enough.  Please direct me to someone that can help me sort this out.

 

Best wishes

Sue

 

 

QuickBooks Team

Re: Incorrect VAT - rounding error?

Hello Sue,

 

I was not aware of the value of the transaction being 44.968 which I agree should be rounding up. I have just replicated the transactions in my QuickBooks which is rounding up correctly, can I please confirm how many line items are included on the transaction could you also please send a screenshot?

 

Thank you.

Community Contributor **

Re: Incorrect VAT - rounding error?

Thanks for the swift reply Edward.  

 

There were two line items on the invoice.  Both were entered exclusive of VAT, both then attracted 20% VAT.

 

I've just created an invoice again with the same figures as before and the error is still there.  I know it should have rounded up because I worked the calculation in Excel to three DP to get the final .968

 

Can you let me have an email address to send a screenshot please, I prefer not to post it in a forum.

 

Thank you

Sue

 

 

QuickBooks Team

Re: Incorrect VAT - rounding error?

Hi Sue,

 

I can understand you not wanting to include a screenshot on a public forum. I am unable to provide you with an E-mail address to send information to, are you able to upload an image without any of the personal information?

 

The only other option would be to contact our support team via telephone I have included a link to our contact us page here.

 

Community Contributor **

Re: Incorrect VAT - rounding error?

Hi Edward

 

I've run a whole number of invoices with varying figures and the problem keeps appearing.

 

Attached is an example  - the figures in Excel to show the calculation/rounding, and the entry in a QB invoice which shows the VAT rounded down.  

 

How do I solve this please?

 

Sue

QuickBooks Team

Re: Incorrect VAT - rounding error?

Thanks for sending the screenshots Sue.

 

I have replicated the transaction as you have in your QuickBooks and am receiving the same rounding result I understand how important it is for QuickBooks to be accurate for your business. The reson happens is because QuickBooks Online rounds the invoice line by line, the only thing which I can suggest is leaving feedback for our product development team for any changes to be made.

Community Contributor **

Re: Incorrect VAT - rounding error?

Hi Edward

 

As you say - I understand how important it is for QuickBooks to be accurate for your business.

 

Currently, it isn't.    I've left feedback but I don't expect that'll solve the problem any time soon.

 

Please tell me how to escalate this.

 

Best wishes

Sue

QuickBooks Team

Re: Incorrect VAT - rounding error?

Hello Sue,

 

I have taken time to go through some further information with regards to your rounding question.

 

 

The rounding with in QuickBooks Online is known as 'Floating Point Rounding' which is to with the size of the fractions which are being calculated due to the number of decimal places which are used. With QuickBooks Online each individual line item is rounded which is why it is behaving in this way on your transaction. The only way you could try and go around the rounding would be to manipulate the numbers to reach the correct amount.

Super Explorer *

Re: Incorrect VAT - rounding error?

Hi Edward,

 

I have the same problem as Sue does and it is extremely annoying. I am constantly left with small differences that I have to correct.

 

There is no point in calculating VAT on a line by line basis. It has no use, adds no benefit and is not recognized by any governmental agency. HMRC are only interested in the total amount of taxable supply, with the relevant rate applied to it.

 

I have an invoice of many lines, driven off a Purchase Order which totals 172.26 before VAT, QBO has calculated the VAT at 34.48,  but we all know it should be 34.45 at 20% standard rate. 

 

The only solution to this being users manipulating the number to get the correct VAT amount is  not acceptable for such a fundamentally basic issue. That would require users to manually calculate every invoice to check that the VAT is correct.

 

Every query I have raised to date ends up with me being referred to the cog wheel. We can all see that the calculations are wrong, so it is a programming error, rather than a user wishlist item.  

 

How do we escalate this so that it is corrected asap?

 

Thanks

 

 

QuickBooks Team

Re: Incorrect VAT - rounding error?

Hi ccascs100

 

We can certainly bring this up as feedback to our engineers as the previous post advises the floating point rounding is the way Quickbooks Online works worth the decimal places currently there is no plan to change this method, so if you can provide  feedback yourself as the requests for something to be changed from users of the program are something our engineers do look at and it has meant things like progressive invoicing have recently been added to the product, so it does get looked at

 

 

Super Explorer *

Re: Incorrect VAT - rounding error?

Hi Emma,

 

Thank you for your response.

 

I am not sure why your engineers are unable to see that the methodology they apply is simply mathematically flawed. 

 

Net of VAT amount of 172.26 attracts VAT of 34.45 at 20%, not the 34.48 as calculated by QBO. What more proof do they need?

  

Community Contributor **

Re: Incorrect VAT - rounding error?

Hi Emma

 

I have gone into this in some detail with your colleagues when I first had the problem.  It appears that the errors are introduced by (a) rounding in the wrong direction and (b) rounding each line item individually and then totalling (and possibly rounding again).

 

Basic mathematics dictates you round as late as possible.  QB should total all the VAT unrounded and as a final step round the VAT.

 

I am getting very, very frustrated at having to manually calculate all my invoices and often then adjust QB.  Sending one with the VAT incorrectly calculated resulted in a client rejecting the invoice because the VAT wasn't in line with their accounts software.  How professional does QB look in that scenario?

 

PLEASE advise how we escalate this.  It isn't a design feature, it's a fundamental flaw in the maths.

 

SueB

QuickBooks Team

Re: Incorrect VAT - rounding error?

Hi csacs100 and SueB3,

 

I appreciate this is causing frustration, however as my previous colleagues mentioned I would recommend to leave feedback to the developers of the website as the more feedback they receive about the same issue, the more likely they are to implement this into the product. To leave feedback click the Cog wheel and then Feedback.


Please let me know if there is anything else I can help with.

Community Contributor **

Re: Incorrect VAT - rounding error?

Hello CarlyL

 

I did.  Weeks ago.  I was ignored.

 

So, and I am asking this very nicely, how do we escalate this please?  There must be somebody who is responsible for the technical design of the product.

 

SueB

QuickBooks Team

Re: Incorrect VAT - rounding error?

Hi SueB3,


I'm sorry to hear you didn't receive a response to the feedback you left through the cog wheel.

 

You can email the developers directly at feedbackUK@intuit.com and the team will pick this up.

 

Thanks, Carly. Smiley Happy

Super Explorer *

Re: Incorrect VAT - rounding error?

Thank you for the email address.

 

I have emailed them directly with images to highlight the problem.

QuickBooks Team

Re: Incorrect VAT - rounding error?

You're welcome csasc100 Smiley Happy

 

Super Explorer *

Re: Incorrect VAT - rounding error?

Sent my email 3 days ago.  No confirmation of receipt yet, let alone a response.

 

Is there anybody out there?

QuickBooks Team

Re: Incorrect VAT - rounding error?

Hi,

 

You are welcome to send all of your concerns to the above E-mail Address, they may not reply; but they will log your concerns and they will investigate them, and they will implement them based on our Customer driven feedback model; which is done based on priorities and how many people are requesting the same feature.

 

I have to stress, that our software has been tested, accepted by HMRC as a valid VAT calculation engine, it's been signed off as per HMRC's testing and calculation criteria. As it stands, HMRC have not reported this to us as being a problem - potentially because we give you the option to override it, in the minor occasions this happens.

 

I don't want you to bang your head against our feedback and suggestions processes, as speaking to someone above me, or above this department will not change the developers timescales and developers current projects. The development team are not customer facing.

We wish we could offer you more, but you've done all you can. - I've emailed the details of this thread to my manager, regardless.

The only OTHER place i can think you MIGHT get a response, but even that's a push, because you're not using the site for it's accurate purpose, you can use the developer site which is https://developer.intuit.com - Sign in with your Intuit Login information and log a support ticket. Again, that site is designed for developers, for our developing partners designing 3rd party Apps for QBO - Don't expect an answer as if you were a customer, they'll answer as if you too are a developer.

 

Thanks,

Super Explorer *

Re: Incorrect VAT - rounding error?

Thanks for escalating this to your manager.

Community Contributor **

Re: Incorrect VAT - rounding error?

Hello

 

I've actually now stopped using QuickBooks so won't be following up on this.

 

Best wishes

Sue

QuickBooks Team

Re: Incorrect VAT - rounding error?

Hi Sue

 

Thank you for letting us know

 

Kind regards

 

Emma