ReesNews

                     10 Cent Rounding News Letter

Between 31 July 2006 and 1 November 2006 5-cent coins are being removed from circulation in NZ and new coins are being introduced to replace existing 10, 20 and 50-cent coins.  From 1 November the 5 cent coin will no longer be legal tender, which means that retailers do not have to accept them for payment of goods.

Sometime during this change over phase you will need to decide when you stop accepting 5-cent coins, this means that anyone paying by Cash will need to have their invoice rounded to the nearest 10 cents.  If they are paying by any other method no rounding is required.

Rees Software & Systems Ltd have revisited our current rounding methods and rewritten our program to cope with 10 cent rounding.  The changes we have put in place are different to our current rounding methods, so it is vital that you understand how this new method works and how this will affect your business.

When you next download a Rees2000 program update, the following changes will occur:

1)If you allow for Point of Sale receipts, then you will notice that the Payment Method is now entered prior to the Payment Amount (i.e. the display order of the two fields have been changed around).

2)If you receipt cash that does not end in either 5 or 10-cent units, the program will display a warning (i.e. 1, 2, 3, 4, 6, 7, 8, 9 cents are invalid cash amounts). This warning is for CASH payments ONLY (Payment method 2).

3)The invoices will no longer round to the nearest 5 cents (if your previous settings were set to do this), however if the customer is paying by Cash only, then the receipt amount will round AND the debtors transaction will also round, so for example if you have an invoice totalling $29.68 and you receipt it at Point of Sale as Pay method 2 – Cash, then the program will expect $29.70, with no change being given, if the customer pays by any other method the payment expected is $29.68.

4)If your current system was set not to round, then no rounding will occur.  If your current system was set to round to the nearest 5 cents, then after the program update your system will be set at 5 cent rounding for Cash sales.

During the phasing out of the 5 cent coinage sometime during the months of August to October, if you receive cash at Point of Sale, then you will need to make a decision of when to change over from 5 cent rounding to 10 cent rounding of cash receipts.  It is up to each individual company to decide when to make this change.  When you do decide to change over, then you need to go to question ‘Round Cash Sale Invoices to $’ and change to $0.10 (this question is found in your System Configuration files- Rees2000 menu option 14.14 – password = SETUP, on page 3, 3 lines from the top of the page.

In the transition period of three months that the Reserve Bank has set for the coin change, there will be a times where if for example you are still rounding to the nearest 5 cents and the customer can’t pay you the 5 cents (or you can’t give them change to 5 cents) or if you are rounding to 10 cents and they pay you to the 5 cent instead, then you may have on accounts small balances of up to 5 cents on individual invoices outstanding.  Within Rees2000 there is a menu option 1.13.12 Clear Client Balances, where you can enter an amount say $0.06 and it will clear any clients who have balances either less than, greater than or both the amount you enter.   We have also introduced a similar option under menu option 1.13.24 Clear Client Transactions.   The difference between these options is subtle.  The first option (1.13.12) clears a client’s total balance owing when a small balance, the second option (1.13.24) clears individual invoices with small balances, so if a client owes you for example $1020.02, being a $1020.00 invoice, and $0.02 remaining from an invoice, then the $0.02 balance will be cleared, leaving $1020.00 owing to the client.  This second option will be particularly useful for your Cash Sales account during the transition period.

How to implement the rounding change to 10-cents

To round your Cash invoices to the nearest 10cents (or even 5 cents), you need to set this under Rees2000 menu option 14.14; the password is SETUP, on page 3.  The Question is: ‘Round Cash Sale Invoices to $’, enter 0.10 for ten cents here.  From this point on if you take cash at Point of Sale, then the amount will round to the nearest 10 cents for you.  This only applies for cash; no other payment method is affected.

Finally we wish to bring to your attention the question after the ‘Round Cash Sale Invoices to $’, The question is ‘Also Round GST Incl. Stock Prices?’, in Rees2000 menu option 14.14 password – SETUP (this question was previously just linked into round to nearest 5 cents).   This question only applies if you are using GST exclusive pricing.  If you use this option then,

the GST inclusive prices on your Setup stock screen (2.1), your F9 stock lookup and (depending on the your settings – i.e. Rees2000 menu option 2.14 Stock Set up Options ‘Add GST to Label Price? = Y) your shelf/price labels will all display a rounded amount.  This is NOT what the client will be charged.  For example if your GST exclusive price is $1.53, then the GST inclusive price is $1.72, if a client buys one of these items, they will be charged $1.72 NOT the label price of $1.70.  Therefore we do not recommend you display and print rounded GST incl. Prices.

Rees Software & Systems Ltd will be placing this new version onto our web site at 3 pm today, Monday 15 May 2006.

Regards,

The team at Rees Software