I. Financial Underpinnings

Purpose of This Chapter

Like any software that interacts with records business transactions, Checkout interacts closely with your financial data. The purpose of this chapter is to offer more insight into how Checkout stores and works with your data exactly.

Rounding Method

When products are sold with a percentage discount, the total price of your sale can have more decimals than you can express in bills and coins. For example, a product with a unit price of $9.99 and a 10% discount will end up being sold for $9.04, while there are quite a few more decimals behind those four cents. This is just one of many possible examples in which a financial figure needs to be rounded. So, whether we like it or not, any application that deals with financial data needs to round numbers off at some point eventually.

There are many different ways to round of numbers, the most commonly used method is the one thought in elementary mathematics classes, also known as symmetric rounding. Using symmetric rounding, one looks at the first digit that will be cut off, if it is a 5 or above the digit before it will increase by one, if not, it’s simply cut off. Eg. 1.455 will be rounded to 1.46, 1.4449 will be rounded to 1.45.

Strangely enough, the common rounding method is not the most unbiased one, since if you round off a number that is exactly halfway between both possible outcomes, it is always rounded up. 1.455 for example is just as close to 1.45 as it is to 1.46. For this reason financial institutions use a method know as bankers rounding. The difference with common rounding is that a number is rounded down when the last remaining digit is an even number and rounded up when it’s an odd number. This is the method Checkout uses to round of numbers.

When Numbers Are Rounded

Whenever a monetary amount is printed on a receipt, it needs to be an amount that one can actually express using the given currency. When you print receipts or other documents from Checkout, the information you see is rounded using the bankers rounding method as described in the section above. All information in Checkout’s database is stored with up to 16 decimals. That may seem like a lot, but when you sell large quantities of a low priced product that always rounds off the same way, even the smallest numbers can make a huge difference.

When you export your financial transactions from Checkout to a Numbers, Excel, CSV or TSV file, the actual unrounded data is exported. In Numbers and Excel files, Checkout applies a number formatter to the fields containing monetary amounts, so they display as two decimal amounts in the spreadsheet, while leaving the precision of the data intact.

Data within Checkout is always displayed with just the amount of decimal places that are expressible in currency, but know you know that it is actually stored in a more accurate format within Checkout’s database.

Special Cases

In some situations, no matter how you round off figures, you may end up with something that does not seem to add up. Take for example a sale with the following unrounded figures: a total price excluding taxes of $12.608 and a 10% tax on top of that of $1.2608. These figures will show up on a receipt as $12.60 and $1.26 respectively. The total due amount will print as $13.87, so we have an extra cent on our receipt that cannot be explained from looking at the receipt itself. The unrounded total amount due is $13.8688, so it makes perfect sense for this number to be rounded up.

One cent is not that big of a deal, but it rapidly gets more complicated when you have multiple products on one sale, that all have an unrounded total price (including discounts) that is rounded down when printed. In practice the chance something like this happens is fairly low and in most cases the rounding of everything on a receipt will turn out exactly right.