An absence of accounting means an absence of accountability
In the context of COVID-19 and public concern for injustice, organizations are increasingly answerable to their stakeholders. Some have already understood the negative financial impact of being perceived as hidden and unaccountable. Now, they openly use technology to give account, owning their responsibility for their actions, products, decisions, and policies.
In addition to new calls for health and justice, the unethical practices well-characterized by stories such as VW and Boeing are driving new interest in accountability. Consumers and commercial buyers are looking more carefully when purchasing and when establishing relationships. They are choosing quality over price, driving up demand for quality brands, and abandoning those that fail in their quality control.
Due to the clear liability, account-giving is an increasing requirement throughout the supply chain in all relationships, just as it is for individuals. Companies are accountable to their stakeholders and obliged to inform them about their actions and decisions, justifying them and openly owning the liability of any misconduct.
Accountability cannot exist without proper accounting practices
As a consultant and software designer who is strongly interested in health and justice issues, I am helping to respond to this increasing demand to be accountable in all sectors. This demand calls on managers and owners to rethink their use of technology. Accountability is only as good as the accounting. The traditional role of accounting software as serving the basic needs of scheduling, bookkeeping, and financial transactions has expanded as the needs of organizations increasingly include full cradle-to-grave traceability, responding to market trends, making ESG metrics public, and meeting regulatory requirements—and this necessitates the ability to prove quality and ethics. Software tools can make this this type of accountability as efficient, consistent, and automatic as traditional financial accountability.
To even participate in certain markets, producers must certify quality and purity. In others, such quality accountability allows a competitive advantage of over a 100% value increase compared to otherwise identical non-certified goods or services. Many nonprofits who are being scrutinized to show their honest behavior and account for the billions of dollars of services they provide. The same need is bringing new importance to accountability in the for-profit sector. As stated in a recent Harvard Business Review article, We’re Entering the Age of Corporate Social Justice, “Companies have an opportunity to rise to the occasion and leverage their influence to build a better world for all—including themselves.”
It is a new and promising era, as all organizations shift to a new paradigm using ethics and technology to ensure their stability and success while offering improved quality and value.
Mark Hambleton is President and Senior Analyst of Analysis & Information Services, Inc., a Maryland technology firm that builds and supports custom accounting and ERP software.