New project created from Users meeting ideas: Line item rounding

Submitted by Matt C on Mon, 14/11/2011 - 13:01

General User's Discussion

A new project has been created at http://www.openvpms.org/project/invoice-line-item-rounding after interst and pledges have been received off list.

The specification has been sent to the developers so if you want to add anything to it please let me know promptly.

Re: New project created from Users meeting ideas: Line item ...

Submitted by Yuri on Wed, 14/03/2012 - 10:18.

Any progress on this enhancement (he said, rattling the cage expectantly......)?

Yuri.

Re: New project created from Users meeting ideas: Line item ...

Submitted by tanderson on Wed, 14/03/2012 - 11:42.

Not so much no. I was concerned about the legality of doing this, as per http://www.openvpms.org/project/invoice-line-item-rounding#comment-4206

-Tim

Re: New project created from Users meeting ideas: Line item ...

Submitted by Yuri on Wed, 14/03/2012 - 12:15.

Hi Tim

I would have thought that I'm allowed to charge / mark up products and services to whatever level I want (ie no restrictive trade practice). Therefore, I can choose to mark up an item by any percentage I wish. I just want the software to "adjust the markup" so that the line item is an exact multiple of 10c.

I'm currently doing this by entering the product price and quantity, pressing Enter, then manually applying a discount of -0.05 to +0.05 to achieve a rounded figure. Within an invoice with multiple items, this is a real PITA. I suppose I could simply round up the price of each tablet in the inventory section, but then I'd have to turn off auto price update, which means once electronic drug ordering is working, I'd lose that benefit.

How about a "Round" button on the invoice entry screen? then the user can choose to whether to round or not to round.

Given that Matt has said he's holding pledges and funds for this enhancement, there's obviously some interest in this enhancement.

Yuri.

Re: New project created from Users meeting ideas: Line item ...

Submitted by Ben_Charlton on Wed, 14/03/2012 - 12:17.

Tim is 100% right on this one. There are 2 reasons

GST amounts need to be rounded if the GST payable results in a fraction of a cent. For example, if the price of a supply is $100 including GST, the GST payable is $100 ÷ 11 = $9.09. You must round down to the nearest whole cent when below half a cent, or round up to the nearest whole cent, when rounding from half a cent and more.

from http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/57709.htm&page=36&H36

Rounding and EFTPOS transactions

Businesses were today reminded of the rules of rounding in dealing with small change in transactions, particularly EFTPOS transactions.

"When it comes to rounding of small change in transaction, businesses are still confused", ACCC Chairman, Professor Allan Fels, said today.

"In 1991 the Prices Surveillance Authority, now part of the ACCC, released the guideline The Withdrawal of Copper Coins to help both businesses and consumers in the transition process leading to the withdrawal of one and two cent pieces.

"This guideline provided that where a consumer elected to purchase goods or services for cash and one and two cent pieces were unavailable it would be necessary to round the final payment".

Under the Guideline the following rounding principles apply to cash transactions:

1 & 2 cents – rounded DOWN to the nearest 10

3 & 4 cents – rounded UP to the nearest 5

6 & 7 cents – rounded DOWN to the nearest 5

8 & 9 cents – rounded UP to the nearest 10

"However the Guideline clearly stated that where a consumer elected to pay by way of cheque, credit card or EFTPOS it was unnecessary for businesses to round the total value of the transaction.

"The ACCC is concerned by the continuing nature of these complaints, particularly as it suggests that items are not available for the price at which they are advertised. This may contravene the consumer protection provisions of the Trade Practices Act 1974 and businesses should be aware that the Act gives consumers rights of private action in relation to such matters".

from http://www.accc.gov.au/content/index.phtml/itemId/87587/fromItemId/378010

I think this would mean rounding everything up on invoice line item would breach Australian Tax Law. as well as incurring the potential wrath of the ACCC.

Each country will obviously vary but this would be something to consider in the internatinalization project.

One alternative solution would be to round items in product pricing pre tax. I am assuming this would mean a coding change in the calculation of retail prices.

What I mean is
RND(RND((COST PRICE * (1+MARKUP/100)),"RULE TO BE DETERMINED")*TAX_RATE),HALF_UP_RNDING)

This isnt illegal because in effect all you are doing is setting a higher (if you plan to round everything up) base price.

I would also not the point about EFTPOS - rounding eftpos maybe an ACCC breach no matter what rounding you apply. Mind you it is a guideline and I am not sure if its every been tested legally. I certainly dont want to be the business that does though.

Regards

Ben

OpenVPMS Installer and Helper

Ph: +61423044823

Email: info[at]charltonit.com[dot]au

Re: New project created from Users meeting ideas: Line item ...

Submitted by Yuri on Wed, 14/03/2012 - 13:03.

Ben said

>This isn't illegal because in effect all you are doing is
>setting a higher (if you plan to round everything up) base price

Ok, so a "Round" button or check mark on the Unit Price page would be legal: suits me fine.

This would actually advantage me more than an invoice line item rounding: eg 14 Prednil tablets at .33c plus say dispensing fee of $10 would result in $14.62 invoice item which would round to $14.60. Rounding up base unit price to .35 results in a $14.90 invoice item. I like it!

Cheers

Yuri.

^{EDIT: and all those extra cents will help to pay the development costs for this enhancement (can't find a smiley for a cheeky grin!)}

Re: New project created from Users meeting ideas: Line item ...

Submitted by tanderson on Fri, 16/03/2012 - 11:33.

There would need to be support to round both the unit and fixed prices.

Would you want to enable this per product or practice wide?

Would the rounding be the same as for the currency?

E.g. AUD has rounding "Half Up" and a minimum cash denomination of 5c.

-Tim

Re: New project created from Users meeting ideas: Line item ...

Submitted by activet on Fri, 16/03/2012 - 13:59.

I agree with Ben and Yuri. Clearly we cannot 'round everything up' on the final invoice line, but the ability to round product items would be great but I can see the technical difficulty associated.

@Ben, what you mean with your formula is rounding post tax right?

@Yuri, we often have to charge out decimal unit quantities of prodcuts - for example charging out injectable medication. So the final invoice price for an item may still consist of cents even you round up the product's unit price post-tax.

I've played around with another software that I've used before (Cornerstone) where product item unit price can be rounded by 1c, 5c, 10c, 25c, 50c or $1 post-tax. (I can email you screenshots to demonstrate if you would like to see them)

Using 'Noroclav Injectable 10ml bottle' as an example, the cost price from supplier was $17.20 ex GST. If say markup is 100% and tax rate (GST) is 10%, the unit price per ml would be $17.20 / 10 x (1+MARKUP/100) x (1+TAX_RATE) = $3.78 inc GST

When rounding of 5c is applied, the unit price per ml becomes $3.80 inc GST

When rounding of 25c or 50c or $1 is applied, the unit price per ml becomes $4.00 inc GST

But if we charge out say 0.33ml of that to a patient even when we use the $1 product rounding method, the fees to the client would become $1.32 + whatever dispensing/injectable fee you choose to add for your practice.

So when I think about it, we'll definitely still need rounding for any invoice item during point of charging and I think Ben's formula below is brilliant.

"RND(RND((COST PRICE * (1+MARKUP/100)),"RULE TO BE DETERMINED")*TAX_RATE),HALF_UP_RNDING)"

@Tim, I believe it would be necessary for the user to have the ability to choose the unit level of rounding on a per product base rather than practice wide, so user has the freedom of choice whether to use this functionality or not.

Regards,

Anthony (ActiVet)

Kind regards,

Anthony (ActiVet)

Re: New project created from Users meeting ideas: Line item ...

Submitted by Yuri on Fri, 16/03/2012 - 14:56.

Anthony said

>So when I think about it, we'll definitely still need rounding for any invoice item during point of charging

Yes, Anthony, you're right: almost as soon as I posted yesterday I had to draw up 0.4ml of Convenia for a patient - it came to $34.44 plus injection fee - and I realised then that rounding unit- or fixed-price in the Product database doesn't work.

Yuri.

Re: New project created from Users meeting ideas: Line item ...

Submitted by activet on Fri, 16/03/2012 - 17:23.

@Yuri >and I realised then that rounding unit- or fixed-price in the Product database doesn't work

Yes Yuri, that is exactly what I was thinking too. I think we are along the same line as in what we want the software to achieve. Using OpenVPMS field names:

Invoice Item Total = RND(Quantity * (List Price/Package Size) * (1+Markup/100) * (1+Tax_rate/100))

and "rounding rule to be determined by user".

This is no different to manually over-riding the invoice item fee charged when billing or giving discount to make the fee nice and round. But practically, I think we need legal advice here (as I'm no tax expert here) on whether building that into the software will breach any Australian Taxation Law.

Ben's formula will be absolutely legal but it doesn't really help us to achieve what we want when I examined it more closely:

RND(RND((COST PRICE * (1+MARKUP/100)),"RULE TO BE DETERMINED")*TAX_RATE),HALF_UP_RNDING)

The GST amount in Australia can calculated by dividing the final invoice cost by 11, so as long as this is recorded right and we pay the tax office the right amount of tax, I don't understand why we couldn't do the rounding because business has the right to determine the markup of product and services that they charge. For example I wouldn't mind the idea of rounding up everything to the whole dollar when billing, so we no longer have to deal with any loose silver coins in our till! Wouldn't that be great and saves time??

Invoice Item Tax = RND(Invoice Item Total/ 11) "To the nearest cent"

Regards,

Anthony (ActiVet)

Kind regards,

Anthony (ActiVet)

Re: New project created from Users meeting ideas: Line item ...

Submitted by Yuri on Sat, 17/03/2012 - 12:57.

From the quote above:

> "The ACCC is concerned...... particularly as it suggests that items are not available for the price at which they are advertised.

I was thinking about this as I did my early Sat morning shop: at the QV market, all my purchases were rounded to the nearest 10c to 20c by the vendor, no-one tried to sell me $18.17 worth of bacon (interestingly, the bacon and other smallgoods had no price on them so they couldn't ever be accused of misleading me on price).

If you advertise a spey at $199.98 and simultaneous F4 Vax at $83.43, you're obliged to charge out that total fee and then apply the ACCC-recommended rounding to a cash transaction (ie $283.40) or charge the full $283.41 to an EFT transaction.

The key word is "advertise". I suppose a significant difference is that we (generally) don't advertise the price of, say, a Metacam injection, nor do we give exact quotes, just estimates, so the client is not being misled in any way as to the final price.

Given that the ACCC has fought and lost cases against Google alleging misleading search results, and previously against alleged petrol price fixing, I scarcely think they're going to be interested in my 0.03 cents worth of rounding if I'm not misleading my clients in any way.

Yuri.