From the word, Lean, we can assume that Lean Accounting is putting lean iniatiatives to accounting tasks or better yet, incorporating lean principles with accounting principles.
An article on IndustryWeek online discusses how Lean Accounting is making a big difference in the operations of Watlow Electric. The company calls it value stream management.
Some of which are:
- A simpler accounting methodology
- Business units have been identifying their value streams and posting simplified operational and financial data for each value stream on a weekly basis.
- Even though right now the economy is down, Watlow-Hannibal is growing the business because people understand the costs better.
Ed Grinde, business unit controller for Watlow Electric Manufacturing Co.’s Hannibal, Mo. operations, suggests nine ways to implement Lean Accounting or value stream mapping.
- Get the support from upper management.
- Make everyone understand that lean is a growth strategy-not a cost-cutting strategy.
- Identify properly the value streams.
- Don’t try to attain perfection before setting up your value streams.
- Keep metrics and methods simple and manual in the beginning.
- Do not set hard goals.
- Value stream leaders need autonomy to be “little general managers.”
- Put as much of your costs as possible directly into the value streams.
- Use the five principles of lean as your criteria to make decisions.
