Short report on The Lean Accounting Master Class

On May 21 and May 22 an International Master Class on Lean Accounting has been held at La Fornace dell’Innovazione.

The event, organised by GC&P and BMA Europe, focused on the “pillars” of Lean Accounting: Provide useful performance measurements, replace traditional standard costing, support sound decision making, eliminate all unnecessary transactions, measure the true effects of lean improvements, make the budgeting process leaner and more effective.

In particular, by means of a number of examples and case studies, it has been pointed out how the traditional cost accounting methods based on standard product costing are totally inadequate in a lean environment: on the one hand they are in themselves complex and time consuming, on the other they do not measure the true effects of a lean transformation and often lead to the wrong decision.

On the contrary value stream accounting, which is the corner stone of lean accounting, provides on a weekly basis useful economic and performance measures, is simple to operate and encourages sound business decisions.

Another important topic discussed was the approach to lean accounting which should be gradual and follow the lean transformation process. The best way to start is with a training session for people not only from accounting but also from operations, technical design, marketing, purchasing etc.

After this lean accounting should be applied to a pilot value stream in order to test the methods and see the benefits. After this first test it can be extended to all value streams.