What is lean accounting and how can you make it work for your company

It is difficult to understand the principles of lean accounting if you do not first understand the basics of lean manufacturing.Lean manufacturing is a manufacturing process that seeks to eliminate waste and therefore reduce costs.There are many different ways of reducing costs.One such way is to follow the Just-in-Time method.This method dictates that a product only needs be manufactured when it is directly requested by a customer.This means that the costs associated with inventory and excess production are eliminated.Waste can also be reduced by increasing efficiency of machines and better training employees so that fewer employees are needed to do a high quality job.

When a company uses lean manufacturing there are some very significant financial savings that exists as a result, however traditional accounting methods do not account for these lean savings.The goal of lean accounting is to measure the good business practices of a lean organization and reflect those financially sound practices in their accounting.Of course since the practice of lean accounting is not set in stone, there are different ways to make lean accounting work for your company.You will need to know the following techniques if lean accounting is to be incorporated successfully.