Rounding

Owned by Apostolos Karakaxas
Last updated: Sept 23, 2020
3 min read

 

Rounding is an important aspect with any financial system, and our platform is no exception. Understanding how rounding works within interworks.cloud will give you insight into how we handle rounding for amount calculation on orders, invoices and subscriptions.

Rounding Rules for Discounts

The rule we are using for applying discounts to order items. invoice items and subscriptions is the following: The rounding is performed as the last step before multiplying with Quantity. Below you can find some examples:

Applying a price list discount to a unit price

  • Unit Price: 2,41€

  • Quantity: 637

  • Pricelist Rule: 16,4% discount on sell price

Steps

Results

Steps

Results

Step 1: Apply discount to product’s unit price

unit price * discount → 2,41*0,836 = 2,01476

Step 2: Apply rounding to unit price after discount

rounded final unit price → 2.01

Step 3: Multiply with quantity

total: final unit price * quantity → 2.01*637 = 1280,37

Applying multiple discounts to a unit price

Same rules as above apply when we have multiple discounts for a unit price. First we calculate all discounts and we round the final until price before we calculate the total by multiply with the quantity. Below a paradigm:

  • Unit Price: 45€.

  • Quantity: 5

  • Price Rule: 30% discount on sell price

  • Volume Discount: 5%

Steps

Results

Steps

Results

Step 1: Apply all discounts to unit price

unit price * pricelist discount * volume discount
→ 45*(1-30%)(1-5%) = 45*0.7*0.95 = 29,925

Step 2: Apply rounding to final unit price

rounded final unit price → 29,93

Step 3: Multiply with quantity

29,93*5 = 149,65

Subscription view for the above paradigm:

Invoice view for the above paradigm

Rounding & Prorated Charges

For scenario where we need to charge an extra license for a prorated period (for adjusting the charges to the renewal date of the subscription), we apply the same rules as above.

  • Unit Price: 10€

  • Billing Period: 26/08 - 19/09

  • Quantity: 4

  • Price Rule: 10% discount on sell price

Steps

Results

Steps

Results

Step 1: Calculate prorated unit price and apply discount

prorated unit price = 25/31 * 10 = 8,06451 * 0.9 = 7,2580
note: the prorate unit price is not rounded before applying the discount

Step 2: Apply rounding to final unit price

rounded final unit price → 7,26

Step 3: Multiply with quantity

7.26*4 = 29,04

Step 4: Add taxes

29,04*(1,25%) = 36,3

 

Purchase Prices for Tenant Resellers

The Update Tenant Reseller process is responsible for updating the purchase prices for the products the Reseller inherits from his distributor. The purchase prices we copy to reseller’s BSS are the rounded pricelist prices. For example. if a product has unit price = 2.41 and the pricelist rule is 16.4% discount, we initially calculate the pricelist price

  • Unit Price: 2.41€

  • Price Rule: 16.4% discount on sell price

Steps

Results

Steps

Results

Step 1: Calculate the pricelist price

2.41 * 0,836 = 2,01476

Step 2: Apply rounding to price list price

rounded pricelist price → 2.01

Step 3: Copy the rounded price to reseller’s BSS

Purchase price in reseller’s BSS: 2.01