A Simple Guide to Accounting for Good
Most social entrepreneurs started their business to change the world, not to spend all day staring at a spreadsheet. But here is a secret: your financial reports are actually one of the best ways to tell your impact story.
In our recent "Accounting for Good" session, experts Adam Mostogl (SECTAS & The van Diemen Project) and David Morrison (Do Good Jobs NZ & COUNT) spoke with Lindsay Burlton from SECNA about how to turn numbers into evidence for the change you’re creating. You don’t need a degree in accounting. You just need a few smart habits.
Here is how to get started, from the basics to more advanced moves.
Level 1: Start with the Basics
Don’t wait for perfection: The biggest mistake is doing nothing because you don't have a "perfect" system. Start tracking what you can now. Consistency is what matters most.
Capture the "Before" picture: You can’t prove you’ve made a difference if you don't know where you started. Record your baseline data, even if it looks "bad", so you can show the growth later.
Identify your "Impact Costs": Ask yourself: "If I were a regular, profit-only business, which of these costs would I cut?" Those are often your impact costs. Just knowing what they are is the first step.
Keep a simple log: If it’s too hard to put in your accounting software yet, just use a Google Sheet to track mission-related costs. Track things like pro-bono hours, discounts provided, ethical suppliers, or employment hours for beneficiaries. Don’t forget to track related data like dates, names & value of services/products too.
Level 2: Use the Tools at your Fingertips
If you use software like Xero, COUNT or MYOB, you already have the tools you need. You just have to use them differently.
Use "Tags" or "Projects": Most software lets you "tag" a transaction. Create an "Impact" tag. This lets you see exactly how much you’re spending on your mission without messing up your main accounts.
Don't lump your income together: Instead of one big "Sales" line, break it down. Separate your results-based grants, donations, and trade income. It makes it much easier to see which parts of your business are actually paying the bills.
The "$0 Invoice": If you give away your services for free (pro-bono), send a real invoice showing the full price and then add a 100% discount. This creates an auditable trail that demonstrates how much value you gave away to the community.
Tell the story behind the number: Numbers can be cold. Whenever you send a report to your board, a funder, or a verifier, add an explaination about why a number went up or down and what it means for your mission.
Level 3: Take it to the Next Level
Once you’re comfortable, go deeper and turn your day-to-day data into a powerful, evidence-based story for your mission.
Track "Paid Hours," not just staff numbers: If your goal is employment (like a WISE), don't just count how many people you hire. Count the total hours they were paid for a more accurate way to show the scale of your impact using tags.
Allocate "Supported Labour": Use payroll tags or project codes to separate standard labour costs from the "extra" costs of supported labour or training time.
Show the "Hidden" Value: If you subsidise your products, record the sale at the full market price and then record the subsidy as an expense. It ends up at $0 profit, but it makes the true value of your work visible on your Profit & Loss statement.
Connect Dollars to Outcomes: Try to put a financial number next to a real-world result. For example: "We spent $1,000 on bus passes, which saved 200kg of CO2 emissions." This "dual story" is gold.
The Bottom Line
You don't need to be a math, technology or accounting whiz to do this. Accounting for good is just about being intentional. By making these small changes, you move from "feeling" like you're doing a good job to proving it.
A Note on Nuance: Impact vs. Reinvestment
While these terms overlap, distinguishing between them helps you show exactly how much profit you are choosing to "give up" for your mission.
Impact Costs are any costs tied to your mission (e.g., paying beneficiary wages or buying from an ethical supplier even if it costs more).
Reinvestment Costs are the specific "extra" choices you make that turn potential profit into purpose. They are not the basic costs required to run your business.
The Cafe Example: If your WISE cafe needs a minimum of two beneficiary staff members to serve customers, those two wages are operational costs. If you choose to roster a third beneficiary staff member for extra support and a lower-pressure training environment, that third wage is a reinvestment cost. While all three employees contribute to your "Impact Costs," only that third person represents a deliberate reinvestment of what would have otherwise been profit
SECNA exists to champion, connect and advocate for social enterprises. These resources have been gathered by members for members. If you see something that needs to be improved, please contact us at hello@secna.org.au. If you’re not already a member, join SECNA to be part of the network of businesses putting people and planet first, and to get advice from other social entrepreneurs.