When reviewing invoices in BigTime, you may notice that the total amount sometimes differs by a penny from the sum of the line items. This minor discrepancy can be confusing, especially when accuracy is essential in financial reporting. Here, we’ll explain why this happens and what it means for your invoices.
Rounding on Time Entries and Expenses
When you enter bill or cost rates in BigTime, such as mileage, these values are rounded for clarity when displayed on the invoice. BigTime processes these entries to display amounts that are easy for your clients to understand, while still accurately reflecting your recorded totals.
Here is an example - given this equation: Hours * Rate = Client Amount. Hours and Client Amount are constants. Only the rate can change.
- Your rate is $133.33 per hour
- You work 0.5 hours
- Your billable cost is 133.33 * 0.5 = 66.665
- BigTime’s front end rounds this up to $66.67
According to the equation below, you can see that we are now off by a penny from our original $133.33.
- Billing Rate = 66.67 / 0.5 = $133.34
Rounding on Invoices
The above rounding example is for the time and expense entries. This also happens at a cumulative scale for invoices. On invoices, there is no rounding at the subgroup, but there is at the line item level. For example, with Subtotal Settings like By Task or By Staff, BigTime will sum each ‘subgroup’ and round its total to 2 decimal places. This will equate to the Line Item Amount(s) seen on the invoice.
Whereas for the total invoice amount, BigTime will sum the original line items and round that Total Amount to 2 decimal places. This can result in a discrepancy between the total invoice amount and the sum of the line items. While this is unusual, the more specific your rates, the more likely these discrepancies become. Sales Tax, if included, is rounded at the overall invoice level, as well.
Minimizing Rounding Discrepancies
If you notice slight differences between the expected line item total and the actual invoice total amount displayed, consider revisiting the time and/or expense entries with longer rates and rectify there.
Large Differences
Differences of more than about 10 cents are generally not due to rounding in calculations. They may indicate a more significant discrepancy or error. You should carefully review your records.