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Lean Accounting and Leadership Opportunities

The focus of Lean Accounting is to continuously eliminate waste from the transactions, processes, reports, and other accounting methods in an organization that have historically bogged companies down and negatively impacted their decision making process. The evolution of Lean Accounting has resulted in accounting & finance departments placing a greater emphasis on value. From isolating non-value added expenses on P&L statements to using Value Added Ratios, Lean Accounting is increasingly enabling companies to specifically measure value in financial terms and focus on improvement efforts that directly enhance value.

At its core, Lean Accounting is a collection of ideas which group methods such as adaption of just-in-time, identification of constraints, value stream mapping, and many others. This compilation of tools is used by companies to asses things like the true cost of what was produced and enable them make decisions based on data.

Keep in mind that Lean Accounting is at its core, a cultural and people-oriented initiative. The key to making the transition to a Lean organization lies in the fundamental change in corporate culture. By itself, Lean Accounting has limited value, but as the financial basis for the architecture and application of logistics, quality management, factory operations, marketing and pricing, and other critical business functions, Lean Accounting is extraordinarily powerful.

As Lean Accounting continues to make contributions to organizational success, it brings with it leadership roles for accountants and finance professionals. Opportunities such as eliminating non-value-added processes in accounting and reporting, and providing a clearer understanding of profit against product lines, shift perceptions of accounting’s role away from transactions and into consulting.

Lean Accounting increases the availability of financial information in so many different dimensions. As a result, it has caused an increased need for accountants to interpret the information being provided and to be more involved in decision making activities. When coupled with the ability to communicate with and lead personnel, these skills are in high demand and can bring significant management and leadership opportunities. If you have not done so already, make it a point to be well informed on the principles, practices, and advancements in Lean Accounting.