#Are you ready for Lean Accounting?
How are you doing with Lean Accounting in your organisation!?
Lean Accounting is the process of optimizing the flow of work that goes into running an accounting, budgeting, finance department. I would treat the assignment very much like production, one-off, small batch and high volume orders.
Accounting for Lean is when we engage Lean principles in the way we calculate and present our financial results and the business decisions that flow from them.
Lean Accounting is not only optimisation through ERP systems.
Map the flow, identify the non-value activities improve the work standards, use visual management to go.
More importantly, a Lean Accounting transformation is doing it with the people at the Genba so that they take ownership and find engagement in the project.
Some Business Benefits would be:
1. More accurate reporting
2. More timely reporting
3. Shorter response time to incoming documentation and requests.
4. Improved flow through the accounting department.
5. Improved cashflow of the business
6. Invoices entered, checked, assigned and executed on time.
7. Improved creditor and debtor ratios
8. Improved KPI which can be shared with operations.
Accounting for Lean is really only for the brave, wise and adventurous.
Accounting for Lean is when you realise the IAS, USGAP and all the rest standards are not really showing you the true picture of the business.
Your Balance sheet and cashflow with the Profit and Loss account suddenly show you true costs.
Don’t do it unless you have support from the CEO.
If you are thinking how to reduce your stock of parts levels and inventory turnover.
If you are looking to reduce fixed costs as a percentage of total costs.
If you are looking to improve Net Return on Investment, then perhaps you are ready to take on Accounting for Lean.