Continuing the discussion from VAT inclusive invoicing:
I have just raised an invoice and I knew the total amount that I quoted and it was a gross figure so with this thread in my mind I went ahead and tried to enter the gross total on the invoice. Turns out this isn’t what the feature does so this thread is not actually implemented. I still need to get the calculator out to raise an invoice using a gross figure as the starting point, unless I’m missing something.
Apologies this thread was closed, I’ve now reopened it.
I have a feeling that this is not an easy fix but I will discuss with our developers to see what can be done. It’s regrettably not going to be something that we can look at in the near term.
EDIT:
Perhaps not the ideal solution but it may help for now…
When using the bulk invoice entry form you can input the gross amounts on the far right hand column and it will work back to the NET.
You can create just one invoice using this method then edit further if needed.
That would work. It’s not all that often I need to do this, usually I deal with nett pricing so it is all simple enough. Occasionally I drop myself in it and verbally quote an exact gross figure so have to stick to it!
Thanks for the pointer.
so i can type in the total amount and it will work otut eh net and vat?
Tried this in test invoice you can not edit total amount, wha ti liek to see is you can type in net amount say £100 and it gives total of £120 but to also type into total amount £120 and it gives net amount of £100 is wha ti meaning understandable?
Yes I understand, it’s the subject of this entire thread. I.e. entering gross on the line item calculates the net automatically. If you want full control of the gross amount refer to the recent update here.
Gross to NET can be done from the multi-invoice screen only.
Can that feature not be added to single invoices? as multi invoice does not really give the ability to do item name or is this customizable?
or maybe this could be links to in reverse to invoice with detail breakdown? as it the breakdown my customers look for, but the gross amount i rather put in, reading that one post i understand why ti is a problem because of quantity but to me the easiest way would be to make it round up eh VAT amount such worse case you are over paying VAT rather that not paying the right amount ie underpaying
The problem of going gross to net is the rounding problems with multiple quantities. When you deduct the VAT and divide through the qty, the resulting amount may go beyond 2 decimal places. Then when you round this down and multiply the other way you’ll get a different result. Also it means adding another column to the itemized section which is already very cramped.
Why round down? it be simpler to round up
Let me have a play with it if i can generate some code then you might be able to pass the crude code onto the developers to potential do it, only becomes a problem when quantity is above 1?
Gross 360 quantity 3 divide gross by 3 gross 120 remove vat net 100 that sort of example is simple i assume but if you change it to gross 300? it becomes a problem?
I meant round to 2 places, not down specifically.
You wouldn’t divide the gross by 3, you would NET off the VAT first then divide by 3.
I will play about with it see if i can come up with some code
Thanks for the info on multi-invoicing workaround for this gross to net calculation on sales. This was another sticking point for my boss in moving from her old system, as she needs to enter cash register sales, and only has a breakdown of gross VATable sales and non-VATable sales, which left her having to pull out the calculator to enter her daily register figures.
I’d still like to see this on the standard invoice entry, if you come up with a resolution to that particular point. 
Fairly simple calculation i thought i be complex, to calculate vat it gross/(1+ vat amount) * vat amount. for net it is gross/(1 + vat amount), to get the net individual amount if quantity is above 1 you divide the figure by the quantity.
tested it and it works fine
Glenn any chance this could be implemented then? the calculation is fairly simple and i have not had the figure out, only one calculation the figure showed 1p more for VAT than it would have if done the reverse way or it was something i done but everything else worked fine
to calculate VAT from gross it is GROSS/((1 + VAT RATE) * VAT RATE)
to calculate net it is GROSS/((1 + VAT RATE) / QUANTITY)
We are not working on this area at the moment, we will revisit this and update the thread as and when we have the opportunity to take a good look.
I am really missing this feature too and would like to explain my reasoning.
1. Pricing
When pricing to customers excluding VAT, there are no issues. However the minute you need to price including VAT (basically in all B2C situation and some B2B ones too) you’re stuck. Imagine you’re selling a widgets for £2 including VAT. That’s the price you have on your posters and on your website. When people want to buy one, you need to send an invoice and enter the price as £1.6666666… which gets rounded to £1.67 which is not correct however not significantly in all cases (the higher the selling price the less significant the rounding error). Also, it looks odd (in B2C situations) on the invoice not to mention anywhere the selling price.
2. My Pricing
My business is to let people use my software and get a percentage on what they sell. If I advertise my commission rate as 2%, I need to enter 0.0166666… which gets rounded to 0.0167. This is not correct and leads to significant errors. It means that I need to decide my pricing based on what divides well by 1.2 - which is very restrictive and will be thrown out of the water if/when HRMC changes the VAT rate. That makes it extremely hard to live with.
3. Interface
I have read in this post that implementing this feature would require changing QF interface, adding an extra column for example. Looking at how other accounting software do it, it is not the case. In Quickbooks, you just tick a box, saying that your prices include VAT and no other fields or columns are required. All you need to know is found in the subtotal (excluding VAT), a VAT and a total (including VAT) lines. That’s how it would look like in QF:
4. VAT errors
I have read the various threads on the subject (including this one) and see that having a VAT inclusive invoicing would lead to rounding errors. Firstly, as explained above, not having VAT inclusive invoicing already leads to rounding errors. For example, if I take the same number used in the example above (2% commission on £10,000), I need to enter 10000 and 0.0167 which leads to a total of £167 and VAT of £33.40. That’s £0.07 too much VAT and £0.40 too much invoice total:
5. Competition
As pointed out before other accounting software do it for a reason - simply because it makes sense and it is (in my case desperately) needed.
I eagerly await your reply and hope that you will consider my points to reconsider implementing this.
Most of the points raised here seem to relate to extending the number of decimal points on the qty and unit cost field rather than the OPs question about enabling invoice totals to be keyed in as VAT inclusive amounts.
We need to put a sensible cap on the quantity rounding, we recently extended the QTY rounding to 4 decimal places, I’m not sure there’s a strong case to extend this further? The unit cost rounding is capped at 2 decimal places, perhaps this could be extend to 4DP, but I would suggest raising this on a separate feature request.
I’m sure we’ll always find certain users who want to push beyond 4DP but I think the vast majority of users will not require this functionality. Furthermore QF allows you to put whatever NET and VAT amounts in you wish. When you’re dealing with long decimals, I would suggest simply setting the qty to 1 (even hiding the column altogether if you like) then just set the NET and VAT amounts as required and enter the exact calculations in the description to show how the figures were deduced.
HMRC to my knowledge don’t mandate how rounding should be performed for VAT purposes and I’ve seen all kinds of rounding conventions on invoices I’ve received from my own suppliers. The key thing is that the convention used is consistently applied.
That’s just my 2p’s worth. Perhaps I’m seeing things from a different angle in the sense that I see how much development time and costs can rack-up from these micro-optimisations. Changing data-types can require significant recoding all over the application, not to mention the time required to run all the test cases and associated risks of getting things wrong.
Hello Glenn, thank you for your reply. The only point I am making is enabling invoices values to be entered inclusive (or exclusive) of VAT. Adding nth decimals is not the answer and for me entering calculations on each invoice every month would still need me to enter my calculation based on ex-VAT amounts which is the one things I want to avoid (for clarity to my customers and accuracy of calculations).
From where I stand I see that the only thing needed is how the invoice arrives at the subtotal and vat lines amounts. none of the fields data types would need to change (assuming you save records at invoice level rather that invoice item level).
Would you mind having another think about it? Also, I am happy to contribute to the cost of this development.
We would like to revisit this subject in due course. We’ve actually spent quite a bit of time recently with house-cleaning tasks. As soon as this is out of the way we can try to come up with some solutions and update you.
Hello Glenn, thanks for your reply and your wish to revisit this in due course.
I know it might be difficult for you to know but I need to get myself organised. Could you let me know the likely timeframe when something can be done? I mean, weeks? months? over 6 months? However approximate, it would be great for me to have an idea.
