Lean

What it means

Lean is a way of managing that grew out of Toyota production: the customer defines value, and anything the customer does not pay for is waste. What gets improved is the process and its idle time, not the person or their pace.

It is not cost cutting. Lean removes waiting, needless handling, rework and large batches, which sets it apart from Six Sigma, aimed at variation and defects, and from kaizen, a culture of small daily improvements.

Lean as a management approach is sometimes confused with the lean startup, although they are different things. The lean startup is a way of testing business ideas: build an MVP quickly, measure how customers react and then carry on or change direction. Lean in its original sense improves processes that already run and already have a customer.

How it works in practice

In a company lean starts by drawing the process: who hands what to whom, where work stops and who is waiting for whom. A process map almost always shows that the handovers take longest, not the work itself.

In bookkeeping that means smaller batches and a steady flow of documents: digitising documents as they arrive instead of a box once a month, one place to approve them and a firm rule on when they must be in.

A typical waste in working with an accounting firm is chasing: a document is missing, the accountant asks by email and the client finds it a week later. What helps is a single list of what should arrive by month end and a workflow in which a missing document shows up at once, not only at the monthly close.

What to watch out for

The usual mistake is to declare lean and drop the checking step on the grounds that it adds no value. Checking before filing does add value: an error that reaches the return has to be corrected by an amended return, and a sanction is charged on the difference.

A second mistake is introducing an improvement without a standard. The new way works while someone is watching, and a few months later the old habit returns. The improved process is therefore written into an internal policy or checklist, and compliance with it is tracked as closely as the result itself.