Discount with included tax.
Posted: Mon Sep 13, 2004 7:41 pm
I received this email today.....
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Hi Dale,
I have got the POS program up and running, it works fine except when I want to give a reduction.
Say I got an item which cost 199 and I want to sell it for 100 to my special friend. I ring in the item by the stock number and get the regular price which includes 25% tax, then I press F9 select 'Reduce line 1 only' and then 'Reduce by amount' enter the amount 99.
In the new line the reduction is shown with stock number = 77777 amount = -99 and a tax off 0%. Ending up with selling the item for 75.25 instead of 100 as intended.
It seam that the program subtract the tax from the regular price, then subtract the reduction without subtracting the tax of the reduction from the reduction first. Can you fix this problem.
Another bug that I found is when using 14 digit stock number in the stock table. When you export/import the table only the last 13 digit are exported/imported the first digit is cut off.
Regards
Henrik
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My reply...
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Henrik,
You are correct, the POS program was exporting only the last 13 characters of the stock table. This has been fixed and can be downloaded from the usual place http://keyhut.com/pos2.htm
When you unzip the files they will be version 6.15 except that the POSCONFG.EXE program will be 6.15a.
Actually there is nothing wrong with the reductions. In the U.S. the price of something has nothing to do with tax. You do all the calcualtions for your sale and when you are done you add tax to the total. If something sells for 200.00 and you take off 50.00 then it sells for 150.00, then you put the tax on it. If the tax is 10% then without the reduction you would have to pay 220.00 (with tax) for a 200.00 item. But if you reduce the price to 150.00 then you would pay 165.00. Notice that the difference in the price of the item is (200.00 - 150.00) 50.00 but the difference in what you pay is (220.00 - 165.00) 55.00. In the US if you received a 50.00 discount but only had to pay 50.00 less then you have been ripped off.
However with included tax everyone thinks the amount that is paid is the price. Actually it is the price plus tax. If the tax rate is 10% then a 200.00 gross price is actually a 181.81818 net price plus a tax of 18.18182. (And people think that included tax is easier?) If you give a 50.00 discount off the price then that comes to (181.81818 - 50.00) 131.81818. But this is included tax so the tax must be included back in (131.81818 + 13.18181) 144.999999 and round to the nearest penny for 144.00.
So the POS program does not cheat anyone and is accurate. A 50.00 discount is actually a 50.00 discount off the actual net price no matter if the tax is added or included.
However opinions may vary. So I am going to post this on the forum and see what others think.
<hr>
Ok, what do you think?
<hr>
Hi Dale,
I have got the POS program up and running, it works fine except when I want to give a reduction.
Say I got an item which cost 199 and I want to sell it for 100 to my special friend. I ring in the item by the stock number and get the regular price which includes 25% tax, then I press F9 select 'Reduce line 1 only' and then 'Reduce by amount' enter the amount 99.
In the new line the reduction is shown with stock number = 77777 amount = -99 and a tax off 0%. Ending up with selling the item for 75.25 instead of 100 as intended.
It seam that the program subtract the tax from the regular price, then subtract the reduction without subtracting the tax of the reduction from the reduction first. Can you fix this problem.
Another bug that I found is when using 14 digit stock number in the stock table. When you export/import the table only the last 13 digit are exported/imported the first digit is cut off.
Regards
Henrik
<hr>
My reply...
<hr>
Henrik,
You are correct, the POS program was exporting only the last 13 characters of the stock table. This has been fixed and can be downloaded from the usual place http://keyhut.com/pos2.htm
When you unzip the files they will be version 6.15 except that the POSCONFG.EXE program will be 6.15a.
Actually there is nothing wrong with the reductions. In the U.S. the price of something has nothing to do with tax. You do all the calcualtions for your sale and when you are done you add tax to the total. If something sells for 200.00 and you take off 50.00 then it sells for 150.00, then you put the tax on it. If the tax is 10% then without the reduction you would have to pay 220.00 (with tax) for a 200.00 item. But if you reduce the price to 150.00 then you would pay 165.00. Notice that the difference in the price of the item is (200.00 - 150.00) 50.00 but the difference in what you pay is (220.00 - 165.00) 55.00. In the US if you received a 50.00 discount but only had to pay 50.00 less then you have been ripped off.
However with included tax everyone thinks the amount that is paid is the price. Actually it is the price plus tax. If the tax rate is 10% then a 200.00 gross price is actually a 181.81818 net price plus a tax of 18.18182. (And people think that included tax is easier?) If you give a 50.00 discount off the price then that comes to (181.81818 - 50.00) 131.81818. But this is included tax so the tax must be included back in (131.81818 + 13.18181) 144.999999 and round to the nearest penny for 144.00.
So the POS program does not cheat anyone and is accurate. A 50.00 discount is actually a 50.00 discount off the actual net price no matter if the tax is added or included.
However opinions may vary. So I am going to post this on the forum and see what others think.
<hr>
Ok, what do you think?