Real Numbers

Management Accounting in a Lean Organization

By: Jean E. Cunningham, Orest Fiume

Narrated by: Peter Bierma

Are you getting a true picture of your company’s performance?

The disturbing answer, for most senior managers and CFOs today, is no. The culprit? Current management accounting practices produce financial statements that are unnecessarily complex and confusing. As a result, most companies are run by executives who do not fully understand their own financial information.

This explosive issue and its implications are fully explored in Real Numbers. The authors, each a chief financial executive, describe how management accounting evolved to this point and how simplicity and clarity can be restored - particularly in a lean organization.

Companies throughout the world are using lean principles to dramatically change the competitive landscape while generating new profitability and market share. As these companies transform, however, financial executives are usually not prepared for how lean principles affect finance and do not know how to streamline accounting. The management accounting model illustrated in Real Numbers points the way to unlocking the true profit potential of lean.

The authors, both leaders in their companies' lean transformations, guide the listener through the necessary changes in finance that will allow accountants to become valued business partners instead of bean counters. You will also learn the simple rules of an accounting system that replaces the outdated approach focused on inventory value.

©2019 Lean Enterprise Institute (P)2020 Lean Enterprise Institute

Good but outdated

They need a new edition of this. I felt like many of the suggestions and example are things most companies did a long time ago.

Interesting book on lean financial management

Taking into account the year in which this book was first published (2003), it’s a pity that it took this long to make this great book into an audiobook.

Although some references show it’s age (I guess using a fax to send invoices wouldn’t make it as a recommendation in an updated version), this still is a valuable book. Actually, this should be considered required reading for everyone that’s interested in implementing lean in a company.

In this book the authors propose ways in which the financial services of a company can become real partners in implementing lean. They point out problems that are to be expected if financial reporting is not brought on board and if priority is given to fixing the numbers instead of making improvement efforts that help shape the reality behind the numbers. Or as they put it ‘the way we improve is by eliminating waste, not shifting blame’.

If there ever would come an updated version of this book, it would be nice to have some more attention paid to lean financial management in service environments as well, since the book mainly focusses on examples of production companies, paying extra attention to the treatment of stock (which is of course to be expected when you talk about lean in a production environment).

Notwithstanding this, the book offers enough lessons and interesting information for anyone who wants to learn more about how lean can be applied in financial services of your company.

A great read for anyone that wants to get a more holistic understanding of lean management and strategy

Fantastic book.
Having experienced what the author is describing and having had the honor to work with/for Art Byrne makes me realize that such a true lean culture and strategy is rare to be found.