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:
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Lean accounting is a management system designed to operate in conjunction with lean production techniques.
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Lean accounting is oriented toward making internal corporate improvements.
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It issues reports much more frequently than the monthly reporting used by a financial reporting system.
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The focus is on the cost of goods produced, as well as on processes.
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Lean accounting tends to result in reduced inventory levels, which can negatively impact profits in the short term.
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Lean accounting tends to reduce assets and headcount.
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Lean accounting is most useful where lean production is used; works in manufacturing and service environments.
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Lean accounting makes it easier to identify opportunities for revenue increases and cost reductions.
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With lean accounting, you may not need to track as many individual transactions.
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Lean accounting requires a significant new project installation, possibly on a pilot basis, with a full roll-out at a later date.