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Hello Team,
Hope everyone doing well.
I would like to understand the purpose of Inv. Rounding Precision, and Amount Rounding Precision at General Ledger Setup.
Inv. Rounding Precision - When will it perform its work? Is it related only to the invoice transactions?
Amount Rounding Precision - When will it perform its work?
I am confused about these concepts.
Please share your thoughts.
Thanks in Advance!
Hi,
The amount rounding is very important for general ledger.
In many countries the requested/recommended/suggested rounding precision is 0,01, like in Germany we have to work with 2 decimals (= 0,01 amount rounding precision).
This is used for rounding the transactions in your General Ledger and should apply to the local legal accounting rules.
For reporting we shoudl not use 3 decimals, but only 2 decimals (or less).
Invoice rounding is not only for "invoices", but also for other documents, like the credit memo or the finance charge memo and the reminder.
You can specify that invoices are rounded to full amounts, like 1 EUR
Find some descriptions here (if you didn't see it already)
docs.microsoft.com/.../finance-set-up-invoice-rounding
Imagine you create a sales order which has an amount of 105,47.
With the invoice rounding to 1,00 you will get a customer ledger entry and a g/l entry on the receivables account with the amount of 105,00.
So your cusotmer will have to pay 105,00 (rounded).
But the other corresponding g/l entries of the sales order / sales invoice, for the entries the ones for the tax/VAT, the revenue and the rounding expenses you'll get 2 decimals, like 0,47 on the expense account for the invoice rounding.
I hope this helps
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