Even though Lean Accounting has been around about 20 years, there still seems to be this conflict between “the lean people” and “the accounting people” regarding accounting’s role in a lean company.
If both groups show a bit of business empathy, the conflict will go away.
Simple Definition of empathy: the feeling that you understand and share another person’s experiences and emotions.
Accountants think this way: maintaining technical compliance (GAAP/IFRS), the ability to reconcile all financial numbers and highest quality of their output to external & internal customers. In many cases, accountants try to reconcile internal financial information with the GAAP/IFRS external financial statements.
Lean people think first and foremost about serving the customer, eliminating waste and flowing the entire value stream from supplier to customer. Lean people understand if value streams improve performance based on lean practices, financial success will be the result.
In the mind of lean people, accounting is the supplier and operations is the customer of the information accounting provides. Lean people want relevant and timely information from accounting that relates to a lean business.
How accounting can be empathetic with lean operations – begin listening to your internal customers. If they don’t like the information you are giving them, ask them what they want and figure out how to deliver it.
How lean people can be empathetic with accounting – the accounting staff in your companies may have to re-train their thinking patterns, just like everyone else in a lean company does. Invest time & effort to train them on lean. But understand how accounting must maintain technical compliance.
As a company, all functions should spend time learning how lean works to make any company more profitable, and how each function must adapt & change based on a lean business strategy.
This discussion begins at the leadership level & must extend through all levels of management, and most importantly must be a constant discussion as lean transforms your business.