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We’ve just bought an electric vehicle. Of course it comes with an app that, as well as controlling things like heating the steering wheel, shows us the charging status. Monitoring the app, alongside sunny days, solar panels and a solar battery, means we are reducing petrol expenses and carbon emissions. We invested in electrification and onsite renewables, and expect payback over X years through avoided petrol and electricity expense. However, the carbon accounting for this activity is a lot more complex. It would involve collecting the previous 12 months’ baseline data, tracking the new footprint and recognising the impact of the upfront purchases.

If there’s one topic that seems to polarise accountants, it’s carbon accounting. While some accountants are passionately pursuing a green agenda, others are vehemently against it. Their clients aren’t asking for it, they are time-poor and it seems like optional activism, rather than a commercial strategic opportunity.

I promise this is a light, easy-to-read introductory article for micro and small businesses that want a simple starting point for understanding carbon accounting and the technology that can help them.

What is carbon accounting?

Carbon accounting is the process of measuring, recording and reporting greenhouse gas (GHG) emissions associated with a business and bringing those emissions together to calculate its overall carbon footprint. In case you are wondering, sustainability reporting tells a broader story than carbon accounting, covering environmental, social and governance (ESG).

Why are businesses interested in carbon accounting?

For many micro and small businesses, carbon emission reporting won’t be a mandatory requirement but there are a number of reasons why they are still interested in carbon accounting:

• They want to understand, manage and reduce their carbon footprint
• It supports their storytelling about being a responsible local business
• They need the information to meet procurement or tender requirements
• Larger businesses are required to assess sustainability across their supply chain, which means they need reliable data from their suppliers (even the micro businesses!)
• Massaging the business data and surfacing insights could both help reduce spend and attract commercial opportunities.

Accurate data starts with clean accounts

A clean and comprehensive set of accounts is a solid foundation for tracking and measuring your carbon footprint. Capturing the underlying details of where and how money was spent helps develop accurate and auditable carbon results.

Use bill and expense management apps like Dext, Datamolino, ApprovalMax and Lightyear to extract the data, and attach invoices and supporting documents to transactions so quantities and usage are visible. This aids in clear, specific transaction descriptions in identifying units (kWh, litres, kilometres, etc.) where relevant.

It’s also desirable to keep supplier contact details accurate, including named contacts and business numbers. Maintain an up-to-date asset register with make and model details of the business’s fixed assets. Use jobs or tracking options to monitor key areas like electricity consumption, fuel usage and business purchases.

When integrated directly into an existing finance system, businesses can embed carbon tracking into their standard bookkeeping workflow, to surface information for fast, data-informed decision making.

Upskill yourself

Every transaction has an environmental impact. With access to business data, accountants are well placed to offer carbon accounting services and drive meaningful change through decision making, advisory and planning. However, for those businesses sitting in the micro and smaller end of town, carbon accounting can seem somewhat daunting. As soon as you dip your toe in, you’re met with dense scientific terminology and sometimes it takes weeks to gather the data necessary to produce the reports.

There’s a lot of training readily available through the tech solutions themselves, via LinkedIn Learning which is a brilliant free resource with your CA ANZ membership, plus CA ANZ also offers a number of courses.

If you or your clients find yourself part of a supply chain that needs to track and provide this data, there’s technology available to help you achieve this commercial advantage.

Technology that turns data Into carbon insights

So, what are some of the tech-enabled tools you can use for carbon accounting?

CarbonInvoice connects with both Xero and MYOB. It measured my business’s carbon footprint and suggested I need a A$79 per month plan which provides for the planting of 13 native trees each month. The premium plan has a library of editable content that could be used for tenders, proposals and presentations, that can be used to showcase the organisation’s sustainability story and impact.

Ecologi is a carbon accounting and climate action platform that helps organisations measure, reduce and report greenhouse gas emissions. It uses a combination of spend data, supplier matching and emission factors to estimate carbon footprints. It includes the option of a monthly subscription that funds climate action and a visualisation of the virtual forest to track the impact you’re making.

Spotlight Sustain is a relatively new solution offered by New Zealand-based Spotlight Reporting. It goes beyond carbon accounting, focusing on ESG reporting. It integrates financial and non-financial data sources, provides customisable templates, offers visual dashboards and enables benchmarking. If you’re already familiar with Spotlight Reporting, you’ll feel comfortable using Spotlight Sustain.

Sumday helps businesses manage sustainability and carbon accounting requirements. It includes a practical client dashboard that lets accountants view and manage all clients from one central place. It also features supply chain engagement functionality: customisable questionnaires to collect essential emissions data. There’s an academy that houses educational resources and 10 hours plus of verifiable continuing professional development. Sumday currently only integrates with Xero.

For businesses on a growth trajectory, it is worth being aware of CarbonSuite, which is built natively inside the ERP solution NetSuite. Through its carbon ledger, it links emissions directly to individual financial transactions. It uses AI to extract activity data, records auditable carbon actuals, produces fully compliant reporting outputs and highlights where carbon impacts can be reduced.

Start small, think practical

For micro and small businesses, comprehensively monitoring their environmental impact may be overkill. Fostering a culture of sustainability could start with a monthly pledge to offset your carbon emissions, celebrate employee-led environmental ideas or share how the business is navigating its sustainability journey with staff and clients.