Lean Accounting

The lean accounting method was first developed and introduced by Toyota and other Japanese companies. Toyota executives claim that the famed Toyota Production System was inspired by what they learned during visits to the Ford Motor Company in the 1920s and developed by Toyota leaders such as Taiichi Ohno and consultant Shigeo Shingo after World War II. As pioneer American and European companies embraced lean manufacturing methods in the late 1980s, they discovered that lean thinking must be applied to every aspect of the company including the financial and management accounting processes.[1] In the manufacturing sector, an informal survey conducted by the Association for Manufacturing Excellence (AME) suggests that more than half of U.S. manufacturers are working to introduce lean into their businesses.[2] Adopters include The Boeing Company, Lockheed Martin, Dell Computer, Steelcase and others.[3]
Lean accounting is an accounting method with a purpose to support the lean enterprises as a business strategy. Lean accounting is used for changes that a required in a company’s accounting, control measurement, measurement and management process to support lean manufacturing and lean thinking. This method of accounting measures and motivates excellent business practices in the lean enterprise. The objective of lean accounting is to eliminate waste, free up capacity, speed up the process, eliminate errors and defects, and make the process clear and understandable.
Lean Accounting is to fundamentally change the accounting, control, and measurement processes so they motivate lean change and improvement, provide information that is suitable for control and decision-making, provide an understanding of customer value, correctly assess the financial impact of lean improvement, and are themselves simple, visual, and low-waste. Lean Accounting does not require the traditional management accounting methods like standard costing, activity-based costing, variance reporting,