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Environmental Management Accounting: How To Guide for Small Business

environmental management accounting: treat your impact like your taxesAs a small business owner, think about the way that you manage your business’ finances:

  1. Is everything documented carefully? 
  2. How long do you keep your records?
  3. What sort of tools do you use to manage it?
  4. Do you handle everything yourself, or do you hire a third party specialist?

Now think about how you handle your facility’s environmental impact. Ask yourself those exact same questions.

Were your answers the same?

Are you dedicating the same level of time and resources into your environmental data management as your financial planning?

The most likely answer for most small business is 'No'. Most businesses owners don't value the place the same value on managing their environmental accounts as they do their financial.

But there’s been a recent shift small business thinking about the benefits measuring environmental performance. More and more people are seeing the direct connection between environmental management and overall profitability, and are starting to treat environmental data management with the same respect as their dollars.

That’s why we’re seeing the emergence of environmental management accounting as a new way of thinking about small business.

Environmental accounting is all about monitoring and managing your environmental data, like material consumption or air emissions, so that you can use it to make better business decisions.

Environmental accounting is useful for keeping your product line in compliance with permit conditions, knowing when to invest in better control technologies, and even for measuring how effective your processes are.

All of these things have an undeniable impact on your bottom line, whether it’s because they determine if you’ll be paying noncompliance fines, finding alternative products that cost less, or encouraging consumer confidence. So it only makes sense to manage your environmental data the same way you would manage your actual money.

And just like financial accounting, it’s now possible to bring your environmental accounting in house, without having to rely on external consultants or third party accountants.

This is possible by setting up an environmental management system (EMS) that is used to collect and analyze environmental data. Environmental certification programs, like ISO 14001, are all about getting companies to implement EMSs. Think of an EMS like the accounting software that your office manager uses to payroll, except your environmental specialists uses it for environmental data management.

Or, depending on the size of your business, it will be you doing both the financial accounting and the environmental accounting. That’s why it’s especially important for small businesses to have a good EMS in place that’s easy to use but gets the job done.

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Image Credit: Dave Dugdale from www.learningdslrvideo.com

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This post was written by Alex Chamberlain

Alex Chamberlain is a writer for ERA Environmental Management Solutions.

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