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.