Value of Accounting for a Social Enterprise

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Accounting is the systematic recording of an enterprise’s economic transactions and activities.  It is also the language of business.  Accounting for a small social enterprise is equally as important for large enterprises.  Reliability and relevance of accounting records is important to effectively manage a small social enterprise.  It helps guide the  entrepreneurs  of  small enterprises  to dispense decisions for the improvement of the enterprise.

An unreliable accounting record is detrimental to the  health and well being of the social enterprise. As an analogy, it is difficult for a driver to know where he or she is going if the windshield is dirty.  An accident is bound to happen.  This can be compared to an entrepreneur naively relying on an unreliable accounting record.  Decisions  premised on unreliable accounting records would definitely result in unfavorable consequences.  Accounting  is the language of business, faulty language will result in faulty responses.

Overstated assets, delayed recording, inaccurate recording of cost or expenses and a host of other inaccuracies in the accounting records would give the false impression that everything is okay until it is too late.

It would do well for the entrepreneur with the help of an able bookkeeper or accountant, although an indispensable cost, to ensure that the accounting records reflect the true financial state of the enterprise.  Quality decisions based on quality accounting records almost always result in positive outcomes.

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