Why is it different in Sage?

5 Feb 2009

Something that we get asked a lot is “Why are the final figures different in Sage Line 50 than the original figures in my CRM system or Excel spreadsheet?”. This refers, of course, to the different ways that computer systems can be set up to mange ’rounding’ from 3 decimal places into the more common and acceptable 2 decimal places.

This is down to the differences between just dropping the 3rd decimal place (as if it does not exist) and Symmetric Rounding .

If I were to take an example as follows;

Product Cost £41.50 – Inc VAT (15%) £47.725 (no rounding)
2 Decimal Place Rounding

Symmetric Rounding £47.73

In isolation this figure creates the 1p problem that many software developers and accountants have come across. The fact that there is a discrepancy between the original figures and the Sage calculated figures.

If you couple this with a set of other calculations, such as one system calculating the VAT based on the overall sub total, and then rounding (that’s the 1p problem), and a second system calculating the VAT on each line item, and these line items being rounded, then the discrepancies can be much larger.

Which is correct? Well, I guess they both are, although your local tax office might be more inclined to want to accept the individual line items being rounded, as this will enable them to recover more VAT. The key is not to mix and match the different types in one system.

So in Sage Line 50, traditionally, the Symmetric rounding is carried out on each line Item and therefore the VAT calculation is not a simple subtotal of all VAT types, rounded using Symmetric Rounding, so this goes to show that it is not just about which rounding system is used, but also how this is applied on the page.

When we next get asked “why is it different in sage”, I guess the answer is above. However, what can we do with OpenCRM to help this situation? Given that we have embarked on a major project to rewrite the Sage Line 50 integration that we already have in place, it makes sense that we should mirror, wherever possible, what Sage are doing. At least in the local UK market, Sage are the major player in mid market accounting and as such, we come across Sage 50 more than any other single accounting product.