When a business implements lean processes and is traveling on a successful journey of endless, continuous improvement, the culture and approach to business is completely transformed. To truly achieve success in a lean transformation, the business also needs to transform how it measures the financial performance of the business. This is necessary since traditional standard-cost accounting does not provide the “right” information in a timely fashion to operate the business in a lean environment and can obscure the improvements made by a lean implementation. The accounting must be aligned with the lean processes. This “new” approach to measure financial performance in a lean business is called “Lean Accounting” and is often described as plain English accounting.
In general, lean accounting is not widely understood and deployed when lean processes are implemented in manufacturing and the transactional areas of a business. Transforming a business from traditional standard-cost accounting to lean accounting is a significant task that should be done in parallel with the operational transformation. There will likely be strong push-back from the auditors and financial organization due to the significant change in the accounting approach. The resistance to change in accounting processes is no different than the resistance that was undoubtedly present in the manufacturing organization when lean forced a change from the traditional batch and queue system to a one-piece flow system.
This podcast will provide a high-level comparison between traditional and lean accounting to provide some insight on the rationale for making this transformation. To get more detailed insight, explore the references listed at the end of the LinkedIn Lean Accounting article at [ Ссылка ] .
