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An innovation blogger has suggested that businesses need a Lean Accounting System to fully understand the benefits of Lean thinking.

Karl Kern, who is reportedly an American-based finance analyst and accounting tutor, also claimed that Lean Accounting Systems (LAS) are the catalyst for realizing the effects of Lean thinking.

LAS support the lean business strategy and create accounting methods which monitor and encourage lean practices.

Companies that are serious about lean transformation eventually find their accounting procedures to be a major hurdle as conventional accounting systems are obviously designed to compliment traditional management styles.

As a business evolves toward lean thinking, many of the essential elements of its management methods and accounting practices become incompatible.

Speaking on his blog, Kern said: “Information from LAS can help organizations transform. It helps by improving the quality of information through the development of product/customer reporting structures (value stream management), the use of a direct costing process (value stream costing), and the simplification of terminology within financial statements.”

Kern also claimed that LAS improves the flow of knowledge through a business by using of visual aids and weekly performance meetings.

“How can an organization clearly know how effective its Lean transformation is? It can't by the seat of its pants. It can through LAS,” he added.