Just Because Tuhund Can Do Something Does Not Mean It Should
Modern ERP systems are powerful. Tuhund is powerful.
It can automate, adjust, recompute, back-date, revalue and reclassify almost anything. But power without restraint is dangerous. The responsibility of an ERP is not to do everything it can, but to do only what is correct, defensible and sustainable for the customer.
This distinction becomes critical when financial statements, inventory valuation, taxation and statutory compliance are involved.
ERP systems are not neutral tools
An ERP is not a spreadsheet.
It is not an accounting workaround engine.
It is a system of record.
Every process allowed inside an ERP implicitly becomes a recommended practice. If a system enables routine adjustments to Profit & Loss or Balance Sheet, it is not offering flexibility. It is institutionalising poor discipline.
Once such behaviour becomes normalised, it is extremely difficult to reverse and the long-term cost is always higher than the short-term convenience.
Financial statements are outcomes, not tuning knobs
Profit & Loss and Balance Sheet are legal and statutory outcomes of business activity. They are not instruments for continuous correction.
If a regular business process requires:
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post-facto inventory revaluation
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retroactive cost adjustments
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repeated journal entries to align numbers
then the issue is not accounting.
The issue is process design.
Fixing numbers after the fact does not fix the business. It only masks issues until they surface during audits, tax scrutiny or regulatory reviews.
Freight, landed cost and where the line must be drawn
There is no disagreement that freight and transportation form part of the economic cost of procurement.
However, accounting disciplines exist for a reason.
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If freight is part of the purchase invoice or known before goods are stocked, it can be capitalised.
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If freight invoices arrive after goods are stocked, they must be treated as expenses in the period they are received.
Anything beyond this introduces avoidable risk.
Trying to push post-facto freight into inventory value results in:
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retroactive stock valuation changes
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period mismatches
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distorted margins
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weakened audit trails
This is precisely why cost accounting exists separately from financial accounting.
Management insight does not require financial distortion
A common argument is that without capitalising all costs into inventory, management will not see the true cost.
That argument is flawed.
Tuhund fully supports:
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landed cost analysis
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cost of procurement reporting
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product and batch level cost visibility
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margin analysis with allocated logistics costs
All of this is available without altering financial valuation.
Cost insight belongs in management and cost accounting.
Statutory truth belongs in financial accounting.
Conflating the two helps no one.
The GST and ITC reality cannot be ignored
Post-facto capitalisation of freight creates a serious compliance mismatch.
Under GST:
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Freight invoices are declared in the period they are received.
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ITC is claimed in that same period.
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GST returns expect a corresponding expense or asset recognition.
If freight is capitalised into inventory instead of being expensed:
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GST shows expense and ITC
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Financial books show neither in that period
For material values, this divergence is visible and measurable. It increases scrutiny risk and weakens the company’s defence during audits.
An ERP should reduce compliance risk, not manufacture it.
Preponing tax liability makes no business sense
There is another consequence that is often overlooked. This approach prepones tax liability without any commercial benefit.
When freight or overhead costs are capitalised into inventory instead of being expensed:
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profit is overstated in the current period
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tax liability increases earlier than necessary
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cash flow is unnecessarily impacted
There may be inventory that is sold or consumed months or even years later. By deferring expense recognition, the business ends up paying tax today on costs that relate to revenue far in the future.
In simple terms:
You are paying tax now for something that has not yet created value.
No rational business does this voluntarily unless required by law.
This is not conservative accounting. It is inefficient accounting.
Procurement valuation and manufacturing valuation are not comparable
Another argument often raised is that manufacturing inventory absorbs value over time, so procurement inventory should behave similarly.
This comparison is incorrect.
Manufacturing inventory
In manufacturing:
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value is added continuously through labour, overhead and processing
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work-in-progress naturally accumulates cost over time
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valuation reflects real transformation of goods
This is correct and expected.
Procurement inventory
In procurement:
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the value is fixed at the point of receipt
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there is no transformation after stocking
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later invoices do not change the nature or value of the goods
Adding costs later does not represent value addition. It represents delayed documentation.
Delayed paperwork does not justify retroactive valuation.
Just because Tuhund can do it does not mean it should
Yes, Tuhund can:
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reopen closed periods
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revalue stock retroactively
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recompute historical margins
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auto-adjust Profit & Loss and Balance Sheet
But enabling these as routine business processes would be professionally irresponsible.
Our obligation is not to say yes to every request.
Our obligation is to protect the customer’s long-term interests.
Short-term convenience often becomes long-term liability.
The role of Chartered Accountants and system designers
Chartered Accountants are essential partners, not adversaries. But roles must be respected.
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Accountants validate financial outcomes.
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ERP systems enforce operational discipline.
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Cost accounting explains economics.
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Financial accounting records facts.
When adjustments become the default solution, it usually indicates that upstream processes are being avoided rather than fixed.
Accounting should complement systems, not compensate for them.
Tuhund does not cook data. Tuhund does not hallucinate.
Tuhund is not designed to manufacture numbers.
It does not cook data.
It does not hallucinate outcomes.
Every figure produced by Tuhund is traceable to an actual transaction, an actual document or an actual event.
Even predictions and forecasts are grounded in historical data, observed patterns and real operational behaviour. There are no artificial adjustments to make reports look right and no synthetic logic to compensate for broken processes.
Predictions are not guesses.
Forecasts are not assumptions.
Insights are not post-facto corrections.
They are derived from what actually happened.
Integrity over illusion
Systems that allow frequent adjustments slowly lose credibility. Over time, users stop trusting reports because they no longer know what reflects reality and what reflects correction.
Tuhund takes the opposite approach.
If the data looks wrong, the system does not fix the numbers.
It forces the conversation back to the process.
This discipline ensures that:
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financial reports remain defensible
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audits remain clean
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compliance remains intact
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management decisions are based on reality, not reconciliation
Insight built on distorted data is not insight. It is illusion.
Tuhund’s position is deliberate and principled
Tuhund will always support:
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compliance-safe designs
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audit-friendly processes
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clear separation between statutory and management accounting
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transparency over cosmetic correctness
What it will not support:
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routine alteration of financial statements
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retroactive stock valuation changes
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designs that introduce GST, audit or tax exposure
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adjustment-first thinking
This is not rigidity. This is responsibility.
In conclusion
An ERP is a long-term commitment. Decisions made today shape behaviour for years.
Tuhund chooses restraint over recklessness, discipline over convenience and correctness over cleverness.
Because just because a system can do something does not mean it should.
And when it comes to financial integrity, doing less is often doing what is right.
