Question

When submitting an invoice, why does it ask for a Round Off Account? How to update it?

Answer

In the Purchase Invoice, Grand Total is calculated based on various calculations like:

• Qty * Rate = Amount
• Tax and other charges applied to each item
• Discount applied to some or all the items
• Multiplication with exchange rate, in case of multiple currencies

Due to multiple calculations, there may be slight rounding discrepancies in the final amount, often negligible, such as 0.034. However, for accounting accuracy, these rounding differences must be accounted for. Therefore, it’s necessary to designate a default Round-Off account in the Company master where such rounding differences can be recorded.

Follow these steps to set up the Round-Off account:

1. Navigate to Accounts > Chart of Accounts.
2. In the Chart of Accounts, verify if there is an existing account under Expense > Direct Expense for rounding purposes. If not, create a new account.
3. Proceed to the Company master by selecting Account > Company.
4. Open the relevant Company profile where the Round-Off account needs to be assigned.
5. In the Company master, locate the Accounts Settings section and select the Round-Off account along with the Cost Center.
6. Once the Round-Off account is updated in the Company master, attempt to submit the Purchase Invoice again.