Lean Accounting
*Please call us at 04-6467110 or Email us for latest schedule.
Traditional financial accounting utilizes Standard Cost and Absorption Costing. These cost systems were useful back in 1930, but not today.
Standard Cost is last year’s most representative actual, and is not going to drive our business to new heights of profitability. It is also a complex system, which is not designed to give us information in a timely fashion nor in a useful format for continuous improvement. It gives us data, not information for decision-making. Standard Cost is inventory driven, but in Lean we have no inventory as we “make to order.” Standard
Cost may be suitable for financial accounting, but it does not help us manage the business.
Absorption Cost was useful when businesses were producing products in mass. That is not the case today. Today we need a new management accounting system that aligns with lean manufacturing operations – an accounting system that focuses on Value Streams and processes, not on departments and functional silos. We need a system that also focuses on speed of delivery to the customer and continuous improvement.? Some today believe that ABC (Activity-Based Cost) is the answer. It is not. ABC, like Standard Cost, is too complex and requires an army of people and elaborate computer systems to operate. ABC only reallocates cost. It does not help us eradicate cost. ABC focuses on activities, not resources.
The answer to today’s quest for a management cost system that supports Lean is a combination of Target Cost and Actual Cost – a system that shows the true results of our Lean implementation efforts, focuses on the customer and our Value Streams. Our traditional financial statements do not show our Lean results because the fruits of our work in Lean are not all recorded in the G/L. Lean Accounting will give us better
decision-making data that is in a language understandable by all associates in the business, and in a format upon which we can act. The goal of Lean is to improve profits while pleasing our customer. Lean Accounting (Lean Beans) will help us reach that goal!
Workshop Duration: 3 days (9am ? 5pm)
The Lean Accounting (Lean Beans) workshop consists of learning how to better align the accounting of your business with Lean Value Streams through exercises and case studies, then applying Lean Accounting (Lean Beans) to your P and L and your Strategic Budget.
Day 1 – Introduction To Lean Accounting
? Introduction and getting started
? Your personal objectives
? History of Management Accounting: Medieval Bookmaker to today
? FERF (Financial Executive Research Foundation) on the 21st Century Accounting
? Role of the Management Accountant in the 21st Century
? Cost Management vs. Cost Accounting: Hitting the Bottom Line
? Customer Profitability
? Introduction to Lean Accounting
? Financial Benefits of Lean Accounting (Lean Beans)
? What will Lean Accounting (Lean Beans) do for us?
? Case: Quantifying the savings, Current to Future State, The Acme Company
Day 2 – Leaning Financial and Managerial Accounting
? Financial Accounting (Transaction-based accounting)
? Standard Cost and Absorption Costing — Why?
? Variance Analysis/Paralysis
? Game Playing and Cost Distortion
? “Make-the-Month” mentality
? Pull vs. Push financial information
? Eliminating wasteful transactions: the One Day Close
? Cost Structures
? Cost Structure – Mass Production (Volume-focused)Cost Structure – Lean Production (Value Stream and process-focused)
? Cost Structure – Lean Production (Value Stream and process-focused)
Day 3 – Managerial Accounting (Value Stream Accounting)
? Collecting financial data by Value Stream
? Making Indirect costs Direct
? Direct Value Stream Cost Reporting, Scorecards, and Visuals
? Lean Accounting (Lean Beans) Financial Statements ? a comparative case study
? Your Company P and L in Lean Accounting (Lean Beans)
? Target Costing, QFD, and Value Engineering
? Exercise: Lean target costing a new product
? Strategic Budgeting with Target Cost
? Case study in 3 year / 30% strategic cost reduction
? Your Company Budget with Target Cost
? Performance Measures that motivate!
? What must be in place for Lean Accounting (Lean Beans) to work?
? Behavioral and Cultural benefits of Lean Accounting (Lean Beans)
Hurry! Call us at 04-646 7110 or Email:
info@synerflexconsulting.com to reserve your seat now or to find out more
details.
