Achieving leaner accounting

The cost measurement approach called lean accounting is designed to support lean thinking. Simplification is a cornerstone to lean production and lean thinking practices. Instead of accountants spending time recording and tracking data usually to update upper levels of management, much of the accoun...

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Bibliographic Details
Published inCost Management Update no. 129; p. 2
Main Author Cokins, Gary
Format Trade Publication Article
LanguageEnglish
Published Montvale Institute of Management Accountants 01.07.2002
Subjects
Absorption costing
Accountants
Accounting records
Automation
Budgets
Cost accounting
Costs
Financial analysis
Management accountants
Purchase orders
Roles
Suppliers
Supply chains
United States > US
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Summary:The cost measurement approach called lean accounting is designed to support lean thinking. Simplification is a cornerstone to lean production and lean thinking practices. Instead of accountants spending time recording and tracking data usually to update upper levels of management, much of the accountants' time can be shifted towards supporting process-based and continuous improvement teams. Ideally, the accountants would no longer reside under the finance function but will have moved into the high performance teams. In short, close partnerships with suppliers, customers, and other third parties plus computer automation enables an organization to remove much of the traditional administrative waste. Lean accounting to support lean thinking is simply absorption costing, using the same principles of ABC/M. Lean accounting simply applies some common sense by understanding that costing is modeling, and all cost models are stylized based on the decision support purpose they are intended to serve. Leaner accounting involves removing some of the unnecessary work that generates little utility for the organization.
ISSN:1934-3388