When taxes are calculated, small rounding differences can happen, especially when prices or tax rates include fractions of a cent.
To keep your totals consistent and accurate, Booqable uses a clear tax rounding and reconciliation process.
How taxes are calculated in Booqable
Booqable can calculate tax in two different ways:
1. Document-level tax
Tax is calculated on each line, then summed together. Rounding happens once, on the total.
2. Line-item-level tax
Tax is calculated and rounded for each line item, then all line-item taxes are added together.
These two methods can produce totals that differ by a cent, depending on when rounding happens.
Example of a rounding difference
Imagine an order with three items, all taxed at 6.25%.
When the tax is calculated at the document level, the total tax is $5.44.
When the same items are taxed at the line-item level, the total comes to $5.43.
This small difference happens because line-item taxes are rounded individually before being added up, while document-level tax rounds only once at the end.
How Booqable ensures totals match
To make sure the tax total on your order is always correct, Booqable uses a reconciliation process.
Here’s how it works in simple terms:
Booqable calculates both the document-level and line-item-level tax totals.
If the two totals differ, Booqable adjusts the line-item taxes so they add up exactly to the document-level total.
Any difference (for example, a few cents) is distributed across line items that have the largest remaining fractions, one cent at a time.
This process ensures that all order lines add up precisely to the total tax amount on the document.
Banker’s rounding
Booqable uses the Banker’s rounding method for all calculations. This approach prevents rounding bias by rounding to the nearest even number when a value is exactly halfway between two options.
Examples:
$2.356 → $2.36 (rounded up because .6 is greater than .5)
$2.343 → $2.34 (rounded down because .3 is less than .5)
$2.345 → $2.34 (rounded down because it’s closer to .34)
$2.355 → $2.36 (rounded up because it’s closer to .36)
This method provides consistent and balanced rounding across all calculations.
Why you might see small differences
It’s normal for different systems, like accounting or POS software, to show slightly different tax totals. Each system uses its own rounding strategy. Booqable’s approach ensures that:
Document-level and line-item totals always match.
Rounding is handled consistently using Banker’s rounding.
Your totals are accurate to the cent.
Orders with mixed tax strategies
Some orders include a mix of tax strategies, such as tax-inclusive and tax-exclusive items. In these cases, Booqable applies the reconciliation process separately for each group. This keeps all tax amounts consistent within each part of your order.
In summary
Booqable uses Banker’s rounding for all tax calculations.
A reconciliation process ensures line-item totals always match the document total.
Small rounding differences are normal between systems, but Booqable’s method guarantees consistent and accurate results.