Price precision determines the fixed number of decimal places to which a calculated price is rounded.
Suppose precision is set at 2 digits. If the value of the third digit to the right of the decimal is less than 5, the hundredth position (second to the right of the decimal) remains unchanged. If the third position to the right of the decimal is 5 or greater, the value of the second position increases by 1. For example, if the computed price is $0.189999, the actual price recorded at the time of purchase is $0.19. On the other hand, if the computed price is $0.18111, the extended price recorded at the time of purchase is $0.18.
By default, unit price precision is six decimal places, and total price precision is two decimal places. Maximums are six decimal places for unit prices and two decimal places for total prices.
It is helpful to consider how many decimal places you want to store and display before you create your price lists. For example, you may want to set the unit price of some products to four decimal places.
If the maximum values are exceeded, truncation and rounding issues may occur. Unit price precision should always be greater than or equal to total price precision. Otherwise, a loss of pricing precision will occur on the total prices. For example, if you set the unit price precision to 1 and the total price precision to 2, your order total prices will have pricing precision to 1 decimal place instead of 2, because the calculated order total prices are based on the unit price.