Lean Accounting (#59)

In this podcast episode, we discuss how lean accounting works, and the circumstances under which it works best. Key points made are:

  • Lean accounting is a management system designed to operate in conjunction with lean production techniques.

  • Lean accounting is oriented toward making internal corporate improvements.

  • It issues reports much more frequently than the monthly reporting used by a financial reporting system.

  • The focus is on the cost of goods produced, as well as on processes.

  • Lean accounting tends to result in reduced inventory levels, which can negatively impact profits in the short term.

  • Lean accounting tends to reduce assets and headcount.

  • Lean accounting is most useful where lean production is used; works in manufacturing and service environments.

  • Lean accounting makes it easier to identify opportunities for revenue increases and cost reductions.

  • With lean accounting, you may not need to track as many individual transactions.

  • Lean accounting requires a significant new project installation, possibly on a pilot basis, with a full roll-out at a later date.

Related Courses

Lean Accounting Guidebook