Cost Accounting And Lean Management

Decent Essays

Cost accounting is a process of recording, classifying, analyzing, summarizing allocating and evaluating various alternative courses of action and control of costs. Cost accounting involves the techniques for:

• Determining the costs of products, processes, projects, etc. in order to report the correct amounts on the financial statements, and
• Assisting management in making decisions and in the planning and control of an organization.
While cost accounting is often used within a company to aid in decision-making, financial accounting is what the outside investor community typically sees. Financial accounting is a different representation of costs and financial performance that includes a company's assets and liabilities. Cost accounting can …show more content…

It is a continuous effort to improve products, services, or processes, which require “incremental” improvement over time in order to increase the quality and efficiency of the process.
Lean management looks for different ways to eliminate factors that waste time, effort or money. This is achieved by analyzing a business process and then revising it or cropping out any steps that do not create value for consumers. Lean Management philosophy is based on the idea that organizations should set their strategies according to what the consumers really value, systematically eliminating waste both within the firm and along the process of supply chain. Many companies when implementing the Lean Management ideology complains that traditional Management Accounting Systems are unable to support their projects. At best, they are perceived as bureaucratic tasks, and at worst, they are considered a key constraint to both the acceptance and success of lean projects implemented in their organizations. The failure of these traditional Management Accounting tools and techniques has led to management consultancies in coming up with and developing a few range of Lean Accounting

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