"Costs do not exist to be calculated. Costs exist to be reduced.” – Taiichi Ohno, father of the Toyota Production System
"You should not need an MBA to understand the numbers in your company." – Jean Cunningham
Jean Cunningham Consulting provides a range of options onlean accounting from introductory presentations to expert level workshops.
What is Lean Accounting?
It is simply the application of lean principles to the accounting and associated functions within the enterprise. The idea is simple, but the application is not obvious within the framework of traditional accounting systems.
Lean Accounting was born in the early 90’s through the experiences of Jean Cunningham at Lantech, Orry Fiume at Wiremold, and Mark DeLuzio at Danaher. It was frowned on mightily by financial professionals from the start and is by many to this day. Change in long-established systems is difficult to visualize and harder yet to take the first step towards implementation.
What does it do?
It identifies and eliminates non-value add waste in the accounting process and IS reporting processes
It improves visual reporting on product lines
It adheres to all GAAP recommendations.
It does not impede Sarbanes-Oxley rules.
It realigns accounting activities to a consulting role rather than a transaction role.
Lean manufacturing creates a mandate to challenge traditional cost accounting. Lean accounting is the natural result, and Jean Cunningham Consulting provides a proven alternative to traditional cost accounting. When the finance department adopts lean principles, it provides a stage that enables the accounting team to move from a transaction focus to a new high visibility role of consulting within other areas of the company.
There are great short and long term advantages to creating a culture of total involvement that can revolutionize the role of your accounting team and its ability to impact your company’s future success.
Lean Accounting Semantics Lean accounting has two distinct areas that may be applied at different times on your lean journey.
"Lean for Accounting" = Applying lean tools (5S, process or value stream mapping, kaizens, etc.) to streamline the processes within the accounting and finance functions to minimize the consumption of resources and eliminating waste.
"Accounting for Lean" = Modifying traditional financial statements and reports to provide "Plain English Financial Statements" throughout the enterprise.
While there is a distinct differentiation between these two areas, the broader term "lean accounting" is often applied to both interchangeably!
