Information about wrong item calculations


#1

Dear Community,

this is an important announcement to inform you about a severe issue with item calculations.

:warning: This issue affects all items that have both a discount and a tax rate set.

Details about the issue

Currently, item amounts are not calculated correctly if an item has both a discount and a tax rate set. The problem, reported by @mjmunger, is that amounts are calculated based on those two values. At the moment, the item taxes calculated are higher than they should be because of the way InvoicePlane calculates the amounts. Also, the item total are too high because of that.

All existing invoices created with items that contain both discounts and taxes must therefore be considered incorrect. I do recommend talking to your accountant on how to proceed.

Upcoming fix

Version 1.5.10 which will be released as soon as possible, fixes this issue. However, it will not modify any existing invoices. Existing invoices are legal documents that should not be altered after they are sent to the client. The corrected calculation method will be used for all invoices created after the upgrade.

Please update as soon as possible!


I deeply apologize for this issue. I was not aware of the real severity of the calculation problem and it should have been fixed way earlier.


#2

#3

The specifics of the calculation issue are that versions of InvoicePlane prior to 1.5.10 calculate the taxable amount from item quantity * price regardless of discounts. The net effect is that all invoices where a discount was applied to a taxable item produced an amount due that contained too much tax. (This bug should not affect invoices or quotes where a discount was not given).

In some cases, not only was too much tax collected, but because the way the discounts were applied, the over all amount due on the invoice was less money than it should have been, which means too much tax was collected and not enough money was collected on the total invoice.

In any given invoice, the difference in the amount of tax collected versus what should have been collected will be the taxable amount on the discount. (If you have a 7% tax rate, and you discount an item $100, you will have collected $7 extra tax).

Depending on your country, this may mean you have to file an amendment with your tax authority, and it may also mean you owe customers refunds for the over collection of taxes. Check with a tax professional to find out how you should proceed.