Introduction. According To Brian Maskell, ‘Lean Accounting

Introduction: According to Brian Maskell, ‘Lean Accounting is general term used for the changes required to company’s accounting, control measurement, and management processes to support lean manufacturing and lean thinking.’ Lean accounting is used as business strategy for Lean Enterprise. In future, the traditional accounting methods used by most of the companies will not be compatible with the Lean changes that companies making today. Lean Manufacturing focuses on eliminating non-value added processes and waste and try to produce only to satisfy customer demand. There are two main thrusts for Lean Accounting. The first is the application of lean methods to the company s accounting, control, and measurement processes. This is no†¦show more content†¦2. Timely, Plain English Financial Reports. Instead of the traditional, complicated financial reports with meaningless variances, in organization where Lean Accounting is used, they create â€Å"plain English† income statements that everyone in the company can readily understand and use. If you have timely and understandable financial information, the value stream leaders can quickly see what’s happening in their business, make better decisions leading to growth, productivity, and profits. This operational and financial information is also shows the TRUE, bottom line savings and profitability coming from lean improvement. 3. Customer Value. The value stream team members have a clear focus on the value created for the customers. When organization know what the customers truly value, and when they have full control over the processes that create this value – then they can work step-by-step to increase the value while at the same time reducing the costs. Increasing value for the customers leads to customer loyalty, unprecedented growth, and profits. 4. Decision-Making and the Box Score Lean Accounting uses a â€Å"box score† which is a single page report showing the three aspects of a value stream that determine the operational and financial results. These are the operational performance measurements, the capacity usage, and a summary of the income statement. The Box Score is widely used in Lean Accounting. It shows the performance of the value streams; operationalShow MoreRelatedChapter 14 Operational Performance Measurement: Sales and Direct-Cost Variances, and the Role of Nonfinancial Performance Measures26317 Words   |  106 Pagesand Clean Company Readings 14-1: â€Å"Standard Costing Is Alive and Well at Parker Brass† by D. Johnsen and P. Sopariwala, Management Accounting Quarterly (Winter 2000), pp. 12-20. The Brass Products Division of the Parker Hannifin Corporation is a world-class manufacturer of tube and brass fittings, valves, hose, and hose fittings. Despite the introduction of popular new costing systems, the Brass Product Division operates a well-functioning standard costing system. Discussion Questions: