When a business implements lean processes and is traveling on a successful journey of endless, continuous improvement, the culture and approach to business is completely transformed. To truly achieve success in a lean transformation, the business also needs to transform how it measures the financial performance of the business. This is necessary since traditional standard-cost accounting does not provide the “right” information in a timely fashion to operate the business in a lean environment and can obscure the improvements made by a lean implementation. The accounting must be aligned with the lean processes. This “new” approach to measure financial performance in a lean business is called “Lean Accounting” and is often described as plain English accounting.

In general, lean accounting is not widely understood and deployed when lean pr ...