Lean Accounting Series : Article 2 - Lean CFO: Your Pied Piper

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The snowball effect is a phenomenon which starts off from a state of small significance, builds upon itself and becomes larger. A snowball rolling down a snow-covered hill will pick up more snow, become bigger and gain momentum as it rolls along. Akin to this concept the traditional accounting practices will lead to a negative snowball effect where the trifling inefficiencies today will lead to significant issues tomorrow.

A tool available to turn this negative snowball effect into a positive one is the concept of lean accounting. Lean can provide the necessary information which leads to improvement in the revenue and thereby increase in the profit. How lean does this is by simplifying processes which helps spotting the problem areas leading to wastages. The reduction in the man hours spent is significant leading to the finance team refocusing its attention to other significant issues at hand.

Better workflows, improved performance and a customer centric business can be built by incorporation of the lean into your business.

The simple question to ask is: Is it a value-added activity? If the answer is no, adopt ways of eliminating it.

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