Price and Tax Calculation in Provet Cloud

Note that treatment estimates in Provet Cloud may behave differently than invoices.

Four Decimal Places

Provet Cloud stores and uses four decimal places:

Currency values need two decimal places.
The third decimal place is required for rounding to two decimal places.
The fourth decimal place ensures that the third decimal place is unaffected by rounding.

Rounding

Conventional Rounding

In most cases, Provet Cloud uses conventional rounding. For example:

1,45 is rounded to 1,5.
1,44 is rounded to 1,4.

Round Half to Even

In some special cases, Provet Cloud uses the round half to even rule that differs from the conventional rounding logic.

'Round half to even' is used when calculating the total sums of invoices and invoice rows before any further optional rounding. For example:

2.235 rounded to two decimal places results in 2.24.
2.245 rounded to two decimal places results in 2.24.

This logic is used to minimize rounding errors in the long run. For example, if ties in rounding would always be resolved by rounding up, the sum of rounded numbers would trend up.

Recalculation

Prices are recalculated invoices and invoice rows every time they are changed. Invoices are also recalculated whenever their invoice rows are changed in a manner that changes their sum values.

Invoice Row Prices

The invoice row total prices shown on the invoice page follow some general rules:

Depending on the settings, the invoice row price may include possible extra fees such as handling and injection fees.
If you modify the invoice row price on the invoice page, the total price is calculated so that the total is quantity × invoice row price, even if handling or injection fees are included in the price.
If you do not change the invoice row total price but otherwise modify an invoice row, the invoice row total price is recalculated based on the existing item price, fees, and possible rounding, meaning that it can still change despite the price values not changing in the background.

Settings

Determining price for tax

To edit this setting, go to Settings > General > Organisation.

The Determining price for tax setting determines whether VAT is included or not in the the price used for tax calculation. This is only significant if there are rounding differences between the two values.

Price including VAT

The Price including VAT method calculates the price without VAT from the price with VAT.

Example: An item with a price excluding VAT of 0.99 is sold. In this case, the calculation is 1.23 x 10 units = 12.30. The subtotal without VAT is 9.92, and the VAT total is 2.38.

Price excl. VAT	VAT %	Price incl. VAT	Quantity	Subtotal	VAT	Total
0.99	24 %	1.23	10	9.92	2.38	12.30

Price excluding VAT

The Price excluding VAT method calculates the price with VAT from the price without VAT.

Example: Same as above. In this case, the calculation is 0.99 x 1.24 x 10 = 12.276 ≈ 12.28. The subtotal without VAT is 9.90, and the total VAT is 2.38.

Price excl. VAT	VAT %	Price incl. VAT	Quantity	Subtotal	VAT	Total
0.99	24 %	1.23	10	9.90	2.38	12.28

Show prices with VAT

To edit this setting, go to Settings > General > Department > Department settings.

This setting may cause an exception to the setting above. The Show prices with VAT setting controls whether prices in the Provet Cloud user interface are shown with or without VAT. Therefore, even if the Determining price for tax setting is set to exclude VAT, the price calculation may actually start from the price including VAT as the price shown in the dialogue is used as the starting point.

Tax calculation method

To edit this setting, go to Settings > General > Organisation > Tax calculation method.

The Tax calculation method setting determines the invoice total VAT calculation method.

Example:

Price incl. VAT	VAT %	Price excl. VAT (raw)	Price excl. VAT (rounded)	VAT (incl. - excl.)
3.45	24 %	2.7823	2.78	0.67
10.50	24 %	8.4677	8.47	2.03
0.25	24 %	0.2016	0.20	0.05
2.89	14 %	2.5351	2.54	0.35
2.89	14 %	2.5351	2.54	0.35
2.39	14 %	2.0965	2.10	0.29
2.39	14 %	2.0965	2.10	0.29
4.25	14 %	3.7281	3.73	0.52
1.99	14 %	1.7456	1.75	0.24
1.99	14 %	1.7456	1.75	0.24

Invoice total sum

The Invoice total sum method calculates the VAT for each VAT rate from the invoice total sum. The only price needed for calculating the VAT is the price including VAT. All other values are derived from it and the VAT percentage. In this example, the invoice total sum is 32.99, the subtotal without VAT is 27.93, and the total VAT is 5.06.

	Sum incl. VAT	Sum excl. VAT	VAT total
24 %	14.20	14.20 / 1.24 = 11.4516 ≈ 11.45	14.20 - 11.45 = 2.75
14 %	18.79	18.79 / 1.14 = 16.4825 ≈ 16.48	18.79 - 16.48 = 2.31
Total	14.20 + 18.79 = 32.99	11.45 + 16.48 = 27.93	2.75 + 2.31 = 5.06

Single invoice row

The Single invoice row method calculates the VAT for each invoice row and sums up the values. In this example, the invoice total sum is 32.99, the subtotal without VAT is 27.96, and the total VAT is 5.03.

If the invoice row VAT values round primarily away from zero or primarily towards zero, this calculation method will show different values than the Invoice total sum method. It is therefore not always possible to derive the sum excluding VAT and VAT total from the sum including VAT within the breakdown. This example has an insignificant bias for 24% VAT but a significant bias away from zero for 14% (amount rounded up is more than amount rounded down).

	Sum incl. VAT	Sum excl. VAT	VAT total
24 %	14.20	11.45	2.75
14 %	18.79	16.51	2.28
Total	14.20 + 18.79 = 32.99	11.45 + 16.51 = 27.96	2.75 + 2.28 = 5.03

With both methods, the sum of the total sum excluding VAT and the VAT total lead back to the total sum including VAT even though the values are different (14.20 + 18.79 = 32.99 vs. 27.93 + 5.06 = 32.99). The VAT total is always calculated as the difference between the sum including VAT and the sum excluding VAT for the values to be consistent.

Single item

The third available calculation method, Single item, is an old, deprecated tax calculation method which calculates the VAT in the same way as the Single invoice row option.