In Simplicate, financial data is primarily rounded using the bankers’ rounding method. Bankers’ rounding means rounding to the nearest even number when dealing with a half value. For example, an amount of €100.50 would be rounded down to €100, while €101.50 would be rounded up to €102. This rounding method is fairer because in half of the cases with half values, it rounds up, and in the other half, it rounds down. This differs from the standard rounding method, where half values are always rounded up.

An exception to using bankers’ rounding occurs on invoices. This is due to how accounting software calculates VAT.

It is important that the invoice in Simplicate matches the total in the accounting records. If not, a customer might pay a different amount than what is expected in the bookkeeping, which could cause an invoice to remain open incorrectly or lead to the false impression that an overpayment has occurred.

That’s why Simplicate already anticipates how the invoice lines will be processed in the accounting system and what the total including VAT will be in the bookkeeping. It then applies the difference between that total and the total that would result from bankers’ rounding to the first invoice line.

This ensures that the subtotal always matches the sum of the invoice lines, and the total including VAT always matches the total in the accounting records. The following example scenario best explains how this works:

Suppose you invoice 2 fixed-price services with a quantity of 2.25 and a unit price of €124.50. This brings the total per service to €280.125. Rounded with bankers’ rounding, this gives a price of €280.12. The subtotal then becomes €560.24.

With a VAT rate of 21%, the total VAT would be €117.65.

In the accounting records, the subtotal is calculated by adding up the unrounded amounts. In this case, the subtotal becomes €280.125 + €280.125 = €560.25. The VAT on this amount at 21% is €117.65, making the total including VAT €677.90.

This results in a difference of 1 cent between the invoice subtotal on which VAT is calculated in the bookkeeping and what would appear on the invoice.

To prevent this discrepancy, this 1 cent difference is adjusted on the first invoice line. The invoice then becomes:

And with that, the total including VAT in the accounting records matches the total including VAT shown on the invoice. This ensures that an invoice is always fully paid when the debtor pays the total amount including VAT as stated on the invoice.