Every purchase your business makes is recorded in its accounts. Avarni reads those records to calculate your Scope 3 emissions from spend.
What are the three records?
Record | What it is | What it looks like |
Chart of accounts | The list of accounts your business records money against | One row per account: a code, a name and a type |
General ledger | Every transaction, recorded against an account | One row per transaction: date, account, amount, and often supplier and description |
Trial balance | The balance of every account on one date | One row per account: the account and its balance |
An account is a bucket for one kind of money. Freight outwards, Software subscriptions and Cash at bank are all accounts.
How do the three records connect?
Something happens. A supplier sends an invoice for freight.
Finance records it. The invoice goes into the general ledger against the Freight outwards account.
Finance totals the accounts. On a date, the balance of every account is listed in the trial balance.
Finance closes the year. Revenue and expense accounts start again at zero. Asset, liability and equity accounts carry their balance into the new year.
The chart of accounts is the list of buckets. The general ledger is what went into each bucket. The trial balance is how full each bucket was on a given day.
Which record does Avarni use for what?
Record | What Avarni does with it |
Chart of accounts | You decide which accounts hold purchases, and which category each one counts in |
General ledger | Avarni reads each transaction in the included accounts and applies a spend-based emission factor |
Trial balance | Avarni checks that the general ledger you loaded is complete |
Your emissions come from the general ledger. The trial balance does not feed your emissions. It is the check.
What this means in Avarni
Upload your chart of accounts first. Your general ledger depends on it, because every ledger row must match an account. Load your trial balances whenever you like. Only the completeness check uses them.