VAT Rounding Tax generating discrepancies between Invoice vs POS

ERPNext
1

I know this is an issue that has been extensively discussed in this forum, however, having read through all this I am still facing issues which I would appreciate some guidance.

The typical example:

  • I have an item set at item price = €17.00
  • VAT is set to 19%
  • Sales and Tax Charges Template I have enabled

    “TAX included in Basic Rate”, and
    “Considered in Paid Amount”

  • System Setting have

    Float Precision set a 4
    Currency Precision set at 2
    Rounding Method “Banker’s Rounding”

  • In the Company Settings

    Round off Account is set

Now when I go to the POS, I see the item price at €17.00. The customer pays €17.00 however, when I go to sales invoice I see the amount rounding to €17.01.

Here is a live example

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The solution could be to increase the Currency Precision to 3 digits however then the POS also starts working in 3 digits…

Am I doing something wrong?

Also FYI I am using:

Installed Apps

ERPNext: v15.44.0 (version-15)
Frappe Framework: v15.48.1 (version-15)
Frappe HR: v15.35.3 (version-15)

2

In a sense I believe that the solution to the above is to answer the question: How do I increase Rounding precision for Taxes at 3 or 4 decimal places and then Round those results to 2 decimal places for the purposes of POS / sales and invoicing

3

Has no one had a similar experience as me? Very surprised

4

Hi @iCornerstone

There are two options;

  1. Set the precision for associated float and currency fields particularly by customizing sales invoice doctype. it has more control than setting precession globally from system setting doctype.

  2. Disabling rounding off can also help in this case either from global defaults or within sales invoice doctype itself by marking disabled rounding total check box on as following;

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5

Hi @ahsantareen,

Thank you for the reply. I appreciate the suggestions. To help me implement them correctly, I need some clarification on two points.

1. Question on Disabling Rounding
Your second point suggests disabling rounding. My goal is to have clean, rounded final totals on customer invoices without the underlying calculation discrepancies. Simply disabling rounding doesn’t seem to address the root cause—it might just hide the symptoms. Could you explain the intended mechanism here?

2. Status of Precision Customization (POS Invoice)
Regarding your first point, I have already attempted to set precision by extensively customizing the POS Sales Invoice doctype and its child tables (POS Invoice Item and Sales Taxes and Charges ). I applied 4 decimal places to relevant fields (Rate, Amount, Net Total, Total, Tax Amount, and more). Interestingly there are 2 fields for each of these (e.g. Amount and Amount (Company Currency)) which I have not managed to understand how they are different.

However, this process raised two issues:

  • Confusion: It’s unclear whether changing precision affects the float, the displayed currency value, or both.
  • Practicality: A 4-digit accuracy is excessive for final customer-facing invoices.

3. Suspected Root Cause: Rounding Inconsistency
My manual calculations lead me to believe this is actually a bug related to inconsistent rounding in the tax calculation algorithm. When starting with a VAT-inclusive price, the sum of the calculated net price and VAT should always equal the original price if rounding is applied consistently. The discrepancy (shown in the attached image) suggests intermediate values are rounded at different stages.

I would appreciate your insight on this analysis and clearer guidance on customizing the POS Invoice specifically.

See image below which proves my point:

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1 Like
6

Hi all, I still have not managed to resolve this. Does anyone else have similar experience or a different solution / approach?

7

To me it looks ERPNext is not usable with Currency Precision as 2 because there’s too many rounding errors in such case.
For example I have purchase receipt with:

  • 6 items at 0.55 EUR including 21% VAT
  • 6 items at 0.10 EUR including 0% VAT

This should be:

  • 2.73 excluding 21% VAT
  • 0.57 for 21% VAT
  • 0.60 with 0% VAT
  • Total without VAT 3.33 EUR
  • Total with VAT 3.90 EUR

And that’s what receipt shows but when I try to submit it then ERPNext will:

  • Credit 3.36 to Stock received but not billed
  • Debit 3.36 to Stock account

This is whole €0.03 difference. Stock Ledger items will be rated as 6x €0.46 + 6x €0.10 = €2.76 + €0.60 = €3.36

And if I submit purchase invoice first before receipt then ERPNext will:

  • Debit €0.57 21% VAT
  • Debit €3.33 Stock received but not billed
  • Credit €3.90 Creditors

So here it is correct but will cause mismatch when receipt will be submitted.

How you’re supposed to handle this?

Anyway I resolved this issue by changing Currency Precision to 4 then don’t have such issue.

And I set Number Format to .## so that only 2 digits is shown. I also checked “Use Number Format from Currency”
This is looks like is best approach currently. Only in print form there are still some numbers that are shown with 4 digit precision rather than 2.

8

Ehh, it still didn’t work….

So I used Currency Precision set to 4, then submitted Purchase Receipt first and then submitted invoice and in final result I still have €0.0003 mismatch…

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9

@iCornerstone

You can disable rounding globally by setting global defaults or other wise POS invoicing rounding can be controlled within pos profile as well.

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