As businesses increasingly recognise the importance of sustainability, carbon accounting has emerged as a pivotal tool. This involves tracking and analysing carbon emissions associated with your operations, which can help in reducing your carbon footprint and complying with environmental regulations. Here are a few initial tips on making the most of your accounting system to streamline the process of carbon accounting and help you save time and money when it comes to understanding your impact.

Make the Most of Your Accounting System

Attach Supporting Documents to Transactions

• Ensure your accounting system captures activity data, not just financial figures. Attach invoices or other supporting documents to transaction entries. These documents often contain detailed activity data, such as the quantity of goods purchased, which is crucial for accurate carbon accounting. For instance, instead of only recording a $1,000 expense for fertiliser, an attached invoice specifying that 50 kilograms of fertiliser were purchased provides the necessary detail for carbon calculations.
• It can be helpful to review invoices from top suppliers to ensure they contain the necessary detail. If they don’t (e.g., it’s just a lump sum), consider requesting more information be included to facilitate the carbon accounting process.
• Consider using apps like Hubdoc, Dext, or Expensify to streamline the process of attaching invoices to transactions in systems like Xero.

Use Detailed Descriptions for Each Transaction

• Detailed descriptions make it easier to categorise transactions under relevant sustainability standards. Ensure purchase orders and transaction descriptions are sufficiently detailed to facilitate accurate and efficient analysis.

Utilise the Quantity Column

• When entering invoices, include the quantity of items purchased alongside the unit price. For example, for an electricity invoice, break it down to show the quantity (e.g., 200 kWh at $40/kWh). This approach improves the accuracy of your carbon accounting.

Keep Your Supplier Contacts Up to Date

• Maintain an up-to-date list of supplier contacts, including specific individuals rather than generic email addresses. Accurate contact information helps in obtaining primary data from suppliers. Engaging with suppliers early on can encourage them to provide actual emissions data rather than relying on less accurate averages.

Conclusion

Streamlining the process of accurate carbon accounting involves data collection and the use of your existing accounting system to its fullest potential. By attaching detailed supporting documents, using specific transaction descriptions, and maintaining accurate supplier contacts, you can significantly improve the accuracy of your carbon footprint calculations.

If you need more tailored advice on preparing your accounts for carbon accounting, we offer a comprehensive readiness assessment to evaluate your current processes. Our team will provide you with actionable recommendations to ensure your business is fully prepared for carbon accounting.