Please read this section if your firm:
1. Uses the Include Components feature or Includes sub-charges in the price of the item
2.And uses the QuickBooks Connector module
New Rounding Adjustment Feature
As of the May 18, 2020 release date for this feature, the default setting for existing clients will be OFF. For new clients after May 18, 2020 the default setting will be ON.
If you are an existing client and would like to have this feature turned on for your firm, please email Support@TheSmartDesigner.com
New Rounding Adjustment Explained
In the image below the total price of the sofa and the components is $14,410.22
Since there are 3 sofas, the unit price for each sofa is $4,803.41
The extended price for the sofa will appear on the proposal and invoice as $14,410.23 since that is the same as $4,803.41 x 3
So in this case the Rounding Adjustment = $14,410.23 - $14,410.22 = $0.01
In other words, because of rounding you are charging your client $0.01 more than the intended sell price.
This is not a fault of DesignSmart, but the simple mathematics of currencies that round to 2 decimals.
How Proposals and Invoices Work With the Rounding Adjustment Feature Off
Prior to May 18, 2020 in some cases when the components were included with the primary, or sub-charges were included with the primary the unit price shown in proposals and invoices was an approximate unit price.
For example, for the sofa set to include components described above would appear on a proposal as follows:
Item |
Qty |
Unit Price |
Extended Price |
Sofas |
3 |
$4,803.41 |
$14,410.22 |
What DesignSmart would send into QuickBooks would be the following:
Item |
Qty |
Unit Price |
Extended Price |
Sofas |
3 |
$4,500 |
$13,500.00 |
Trim |
15 |
$54.00 |
$810.00 |
Upholstery |
4.8 |
$20.88 |
$100.22 |
$14,410.22 |
The critical point to understand is that the extended unit price was the actual unit price.
For this reason the totals were always correct, the sales taxes were correct, and the invoices sent from DesignSmart always matched the invoice amount in QuickBooks.
How Proposals and Invoices Work With the Rounding Adjustment Feature On
With this feature turned on, the Extended Price is adjusted so that it equals the quantity times the unit price as shown below:
Item |
Qty |
Unit Price |
Extended Price |
Sofas |
3 |
$4,803.41 |
$14,410.23 |
However, in order for QuickBooks to know all of the items that were sold, DesignSmart must send in all three items plus the adjustment amount.
Item |
Qty |
Unit Price |
Extended Price |
Sofas |
3 |
$4,500 |
$13,500.00 |
Trim |
15 |
$54.00 |
$810.00 |
Upholstery |
4.8 |
$20.88 |
$100.22 |
Adjustment |
1 |
$0.01 |
$0.01 |
$14,410.23 |
The invoice that the clients sees will come from DesignSmart and will not show this adjustment amount.
The adjustment is only sent to QuickBooks so the invoice in DesignSmart matches the QB invoice to the penny.
Sometimes the adjustment amount will be a positive amount and other times it will be a negative amount, so they will tend to balance out to $0.00 over time.
For information about how to set up this adjustment feature in the QuickBooks Connector, please click here.
What are the Advantages and Disadvantages of Turning On This Feature?
The advantage of turning on this feature is that the quantity times the unit price will always equal the extended price.
The disadvantage is that it will make the invoices in QuickBooks a little bit longer as it will need to add the adjustment lines.