Social Business Accounting Zone

As a social business, it’s your responsibility to define the social objectives of your enterprise and outline how you will measure and report success.

You will need a viable, logically consistent, and rigorous social accounting system to report your business goals.

Accounting for social enterprises

Social accounting, or communicating the way your organisation’s actions impact the community, is still in its infancy compared to financial accounting. Most social businesses can choose the social accounting approach that best suits them and the social impact they seek to achieve. 

Look at how other organisations engaged in similar activities present their social accounts to get a better idea of what might work for your social business.  

How to set up social accounting for your enterprise

Start shaping your own social business accounting by considering the following: 

  • What is the impact you wish to achieve? How is your social business helping the community? This corresponds to your aims and vision, and may be long-term. The impact can be achieved through collaboration and/or empowerment, as well as directly by your organisation. 
  • What are the outcomes you are seeking to create? Outcomes describe your activity within a defined time span. They are necessary steps which are easier to measure and contribute to overall impact of your social enterprise.  
  • What are the outputs you will deliver? How do they contribute to your outcome? 

For example: If your social impact is a more resilient local economy, a possible outcome will be the launch of a new business that provides a local service and boosts employment. The outputs might be business training delivered to the people who set it up. 

Social enterprise accounting requirements 

To answer these questions, take the same approach as you would for your commercial objectives. Below, we break down the steps involved in setting up social accounting for your business: 

The social business accounting process 

A step-by-step guide to defining the aims of your social business, setting up targets and defining the best way to measure your goals, as well as the best approaches for reporting results to stakeholders and auditing your data. 

Disseminating the results to stakeholders  

When an enterprise reports against social targets, it is seeking to answer questions from internal and external stakeholders similar to these answered by a financial audit. Did the enterprise achieve any of the social objectives they signed up to support? Did this enterprise they gave a grant to do anything for their community?

Once you have answered these questions in your social audit, you can use the resulting document to promote your social business across various channels. 

Some more useful resources on industry standards and defining what your own outputs and outcomes look like include: