No need to smudge the numbers with Lean accounting

Accountants are always carefully auditing and analyzing everything, from money spent to billable hours devoted to specific projects. Ironically enough, analyzing various business costs also ends up taking a lot of time itself. By applying Lean manufacturing concepts to their own jobs, accountants may find they are better able to complete their responsibilities in a much quicker fashion.

Accounting tends to be a bloated activity, weighed down by overly complex ways of processing huge amounts of work to determine accountability and ensure responsible use of resources. Auditors and accountants measure and analyze a variety of seemingly small factors to arrive at simple conclusions and outcomes. In short, accounting tends to be almost anti-Lean, as it's full of wasteful and needless processes.

Bringing Lean to Accounting
Now, many accountants have looked toward Lean philosophies and practices to help them develop more efficient standards and improve their workflow. As discussed at the Lean Accounting Summit, a Lean approach will do four things – encourage Lean transformation, utilize Lean tools, comply with accepted accounting principles and support better workplace culture by encouraging continuous improvement.

“Some accounting processes contain muda type 1 (waste that cannot be eliminated at the moment) but most accounting processes are muda type 2 (waste that can be eliminated),” explain Brian Maskell and Bruce Baggaley, two members of the Lean Accounting Summit. “The tools of lean must be rigorously applied to our accounting, control and measurement processes so that waste is relentlessly driven out.”

For the most part, Lean accounting is still a somewhat overlooked way of performing tasks. However, with events such as the Lean Accounting Summit throwing their support behind it, more businesses are discovering the benefits of taking this approach to traditional accounting activities.

“Companies using Lean accounting have better information for decision-making, have simple and timely reports that are clearly understood by everyone in the company, they understand the true financial impact of lean changes, they focus the business around the value created for the customers and Lean accounting actively drives the Lean transformation,” the source adds.

Lean is not a concept that is applicable only to manufacturing. Increasingly, companies are discovering a variety of ways to integrate Lean into their business practices. Lean is a company-wide game-changer, regardless of whether it's applied to manufacturing, accounting or any other business-related activity.