Lean Accounting System: Importance and Successful Implementation

Authors

  • SYED BABAR ALI
  • ZEBA SHARIFF KHAN
  • ZUBAIR A SHAH
  • MUHAMMAD AHMAD

Keywords:

Lean Accounting, Systematic Literature Review, Qualitative Approach

Abstract

A lean accounting system is a complex phenomenon the success of which can depend on several factors. Efforts to implement and/or maintain a successful lean accounting system have failed many times, however, only a few studies have addressed this predicament of the implementers. The objective of this study is to find out the importance of lean accounting system, and the reasons behind its successful implementation. A thorough literature review was performed to meet the research questions.It was found that a successful lean accounting system requires continual strong commitment from top management, introduction of congruent accounting methods,existence of a lean manufacturing/operational system, and effective collaboration with value-stream teams.This study has contributed to extant research by unearthing the interrelationship among the variables such as manufacturing system, traditional accounting system, lean accounting system, role of top management, and others to find out the ingredients of a successful lean accounting implementation.

Downloads

Download data is not yet available.

References

Alefari, M., Salonitis, K., & Xu, Y. (2017). The role of leadership in implementing lean manufacturing. The 50th CIRP Conference on Manufacturing Systems, 63, pp. 756-761.

Alhuraish, I., Robledo, C., & Kobi, A. (2017). A Comparative Exploration of Lean Manufacturing and Six Sigma in Terms of their Critical Success Fators. Journal of Cleaner Production, 164(15), 325-337.

Antomarioni, S., Bevilacqua, M., Ciarapica, F. E., Sanctis, I. D., & Ordieres-Mere, J. (2020). Lean Projects’ Evaluation: the Perceived Level of Success and Barrier. Total Quality Management & Business Excellence

, 31(1-2), 1-25.

Baggaley, B. (2007). Creating a New Framework for Performance Measurement of Lean Systems. In J. Stenzel, Lean Accounting: Best Practices for Sustainable Integration (pp. 69-92). Hoboken, New Jersey, USA: John Wiley & Sons, Inc.

Bellisario, A., & Pavlov, A. (2018). Performance Management Practices in Lean Manufacturing Organizations: A Systematic Review of Research Evidence. Production Planning & Control, 29(5), 367- 385.

Bellisario, A., & Pavlov, A. (2018). Performance Management Practices in Lean Manufacturing Organizations: A Systematic Review of Research Evidence. Production Planning & Control, 29(5), 367- 385.

Bicheno, J., & Holweg, M. (2009). The Lean Toolbox: Essential Guide to Lean Transformation (Fourth ed.). Buckingham, United KIngdom: PICSIE Books.

Bouncken, R. B., & Gast, J. (2015). Coopetition: a systematic review, synthesis, and future research directions. Review of Management Science, 9(3), 577-601.

Brosnahan, J. P. (2008). Unleash the Power of Lean Accounting. Journal of Accountancy, 206(1), 60-66.

BÜYÜKİPEKCİ, S. (2019). Lean Accounting and Value Flow Costing System In Lean Manufacturing Companies. In T. ÇÜRÜK (Ed.), Finance and Accounting I (pp. 175-189). Ankara, Turkey: Academician Publishing House Inc.

Carnes, K., & Hedin, S. (2005). Accounting for Lean Manufacturing: Another Missed Opportunity. Management Accounting, 7(1), 28-35.

Čečević, B. N., & Đorđević, M. (2020). Lean Accounting and Value Stream Costing For Efficient Business Processes. Economic Themes, 58(4), 573-592 .

Cooper, R., & Maskell, B. (2008). How to Manage Through Worse-Before-Better. MIT Sloan Management Review, 49(4), 58-65.

Cunningham, J. E., & Fiume, O. (2003). Real Numbers: Management Accounting in a Lean Organization. Durham, North Carolina, USA: Managing Times Press.

DeBusk, G. K., & DeBusk, C. (2012). The Case for Lean Accounting: Part II-Value Stream Costing. Cost Management, 26(4), 22-30.

Debusk, G. K., & Debusk, C. (2014). The Case for Lean Accounting: Part V - The Closing Argument. Cost Management, 28(4), 29-34.

Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2013). Management Accounting and Control Practices in a Lean Manufacturing Environment. Accounting, Organizations and Society, 38, 50-71.

Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2014). Lean Manufacturing and Firm Performance: The Incremental Contribution of Lean Management Accounting Practices. Journal of Operations Management, 32, 414-428.

Grasso, L. (2007). Obstacle to Lean Accounting. In J. Stenzel, Lean Accounting - Best Practices for Sustainable Integration. Hoboken, New Jersey, USA: John Wiley & Sons.

Grasso, L. P. (2005). Are ABC and RCA Accounting Systems Compatible with Lean Management? Management Accounting Quarterly, 7(1), 12-27.

Grasso, L. P. (2006). Barriers to Lean Accounting. Cost Management, 20(2), 6-19.

Harris, D., & Cassidy, J. (2013). The Adoption of Lean Operations and Lean Accounting on the Profitability and Cash Flows of Publicly Traded Companies. Advancement in Management Accounting, 71- 96.

Hilker, C. (2011). Effective Cost Management. Cost Management, 25(4), 17-22.

Holmemo, M. D., & Ingvaldsen, J. A. (2016). Bypassing the Dinosaurs? – How Middle Managers Become the Missing Link in Lean Implementation. Total Quality Management & Business Excellence, 27(11-12), 1332-1345.

Hrabal, M. (2016). Process-Oriented Managerial Accounting. International Advances in Economic Research, 22, 225-227.

Hutchinson , R., & Liao, K. (2009). Zen Accounting: How Japanese Management Accounting Practice Supports Lean Management. Management Accounting Quarterly, 11(1), 27-35.

Kapanowski, G. (2017). Lean Accounting. Cost Management, 31(1), 37-41.

Kaynak, H. (2003). The Relationship Between Total Quality Management Practices and Their Effects on Firm Performance. Journal of Operations Management, 21, 405-435.

Kennedy, F. A., & Widener, S. K. (2008). A Control Framework: Insights from Evidence on Lean Accounting. Management Accounting Research, 19, 301–323.

Keupp, M. M., Palmié, M., & Gassmann, O. (2012). THE STRATEGIC MANAGEMENT OF INNOVATION: A SYSTEMATIC REVIEW AND PATHS FOR FUTURE RESEARCH. International Journal of Management Reviews, 14(4), 367-390.

Li, X., Sawhney, R., Arendt, E. J., & Ramasamy, K. (2012). A Comparative Analysis of Management Accounting Systems’ Impact on Lean Implementation. International Journal of Technology Management, 57(1,2,3), 33-48.

Maskell, B. H., & Kennedy, F. A. (2007). Why Do We Need Lean Accounting and How Does it Work? The Journal of Corporate Accounting and Finance, 18(3), 59-73.

Maskell, B., & Katko, N. (2007). Value Stream Costing: The Lean Solution to Standard Costing Complexity and Waste. In J. Stenzel, Lean Accounting: Best Practices for Sustainable Integration (pp. 155- 176). John Wiley & Sons, Inc.

Maskell, B., Baggaley, B., & Grasso, L. (2012). Practical Lean Accounting: A Proven System for Measuring and Managing the Lean Enterprise (Second ed.). Cherry Hill, New Jersey: CRC Press.

McVay, G., Kennedy, F., & Fullerton, R. (2013). Accounting in the Lean Enterprise. Boca Raton, Florida, USA: CRC Press, Taylor and Francis Group.

Mskell, B. H., & Baggaley, B. L. (2006). Lean Account, What It's It All About? Target, 22(1), 35-43.

Öker, F., & Adıgüzel, H. (2016). Time-Driven Activity-Based Costing An Implementation in a Manufacturing Company. The Journal of Corporate Accounting & Finance, 22(1), 39-56.

Panwar, A., Nepal, B., Jain, R., Rathore, A. P., & Lyons, A. (2017). Understanding the Linkage Between Lean Practices and Performance Improvements in Indian Process Industries. Industrial Management & Data Systems,, 117(2), 346-364.

Pieter, M. V., & Tillema, S. (2018). Controlling Lean Manufacturing in Multidivisional Organisations: Highlighting Local Interests and Constraints. International Journal of Operations & Production Management, 38(11), 2149-2168.

Revellino, S., & Mouritsen, J. (2015). Accounting as an Engine: The Performativity of Calculative Practices and the Dynamics of Innovation. Management Accounting Research, 28, 31-49.

Reynders, P., Kumar, M., & Found, P. (2020). Lean on Me’: An Integrative Literature Review on the Middle Management Role in Lean. Total Quality Management & Business Excellence, 31(13-14), 1-28.

Rosa, R., Cristina, A., Machado, C. V., & João, M. (2013). Lean Accounting: Accounting Contribution for Lean Management Philosophy. Tourism & Management Studies, 3, 886-895.

Ruiz‐de‐Arbulo‐Lopez, P., Fortuny‐Santos, J., & Cuatrecasas‐Arbós, L. (2013). Lean Manufacturing: Costing the Value Stream. Industrial Management & Data Systems, 113(5), 647-668.

Silvi, R., Monica, B., & Hines, P. (2008). SCM and Lean Thinking: A Framework for Management Accounting. Cost Management, 22(1), 11-20.

Staedele, A. E., Ensslin, S. R., & Forcellini, F. A. (2019). Knowledge Building About Performance Evaluation in Lean Production: An Investigation on International Scientific Research . Journal of Manufacturing Technology Management, 30(5), 798-820.

Stenzel, J. (2007). Lean Accounting: Best Practices for Sustainable Integration. Hoboken, New Jersey, USA: John Wiley & Sons, Inc.

Van Assen, M. F. (2018). Lean, Process Improvement and Customer-Focused Performance. The Moderating Effect of Perceived Organizational Context. Total Quality Management & Business Excellence, 29(13-14), 1-19.

Wilson, L. (2010). How to Implement Lean Manufacturing. Chicago, New York, USA: The McGraw-Hill Companies Inc.

Womack, J. P., & Jones, D. T. (2010). Lean Thinking - Banish Waste and Create Wealth in Your Corporation (Second ed.). New York, New York, USA: Free Press, Simon and Schuster Inc.

Downloads

Published

2021-06-30

How to Cite

ALI, S. B. ., KHAN, Z. S. ., SHAH, Z. A. ., & AHMAD, M. . (2021). Lean Accounting System: Importance and Successful Implementation. The Journal of Contemporary Issues in Business and Government, 27(3), 2387–2398. Retrieved from https://cibgp.com/au/index.php/1323-6903/article/view/1851

Issue

Vol. 27 No. 3 (2021): The journal of contemporary issues in business and government

Section

Articles

License

You are free to:

  1. Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
  2. Adapt — remix, transform, and build upon the material for any purpose, even commercially.
  3. The licensor cannot revoke these freedoms as long as you follow the license terms.

Under the following terms:

  1. Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
  2. No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

Notices:

You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .

No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.