Beware of the Rounding Precision

There is a field in the item card that looks harmless, yet in manufacturing it can cause major errors if not configured properly: Rounding Precision.

You can find it in the Replenishment tab of the item card. Its value is automatically set to 1 when the item is created, and this default setting often leads users to overlook it.

In reality, the effect of this field is far more insidious than it seems. Let’s look at a practical example.

Practical Example

Suppose we have the following bill of materials:

To produce one unit of product A, we need 1.07 kg of component A1, plus 3% scrap.

The effective requirement for A1 therefore becomes:

1.07 × 1.03 = 1.1021 kg

Con la Precisione arrotondamento impostata a 1, Business Central arrotonderà ogni quantità necessaria all’unità intera superiore.

With the Rounding Precision set to 1, Business Central will round every required quantity up to the next whole unit.

A key clarification:

The rounding is applied based on the unit of measure used in the BOM, not the base unit of the item.So, if the base unit is kilograms but the BOM uses grams, the rounding will be applied to grams — not kilograms.

Looking at the example below, it's clear how this behaviour can produce a significantly inflated demand.

In a real-world scenario like this, Business Central would suggest purchasing up to 81% more material than actually needed.

You can easily imagine the impact on costs, especially when dealing with high-value components.

It’s true that the effect decreases as the production quantities increase, but not in a linear way — the deviation can still be significant.

Conclusions

When working with manufacturing companies, Rounding Precision becomes a critical parameter and should never be left at its default value.

Here are some recommendations:

• Set it to a fractional value (e.g., 0.01 or 0.001) for all items that use non-integer units of measure.

• Pay particular attention to weight- and volume-based items, where decimal values are the norm.

• Always check how rounding affects your BOMs and expected consumption calculations.

A seemingly small setting can prevent major issues in purchasing, production, and cost management.

©2022–2025 Marco Francesco Ferrari