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The Lean Accounting Guidebook #361126

Course Overview

Credit

Amount

CPA

Course Author: Steven M. Bragg, CPA Field of Study (CPA): Accounting

Course Description

Course publication/revision date: This course was updated on 1/11/2026.

The Lean Accounting Guidebook shows the accountant how to save money and minimize errors by streamlining the accounting department. It does so by describing more than 150 improvement tips for billing, collections, cost accounting, fixed assets, payables, payroll, and more. The accountant can use such tools as value stream mapping, flowcharting, traffic analysis, and measurement systems to decide which improvements would be the most useful to install. In short, this course provides the accountant with a complete toolkit of solutions for improving the accounting department.

Table of Contents

Chapter 1 - Overview of Lean Accounting1

The Definition of Lean	1
Issues that Interfere with a Lean Department	2
Lean Tools	3
Value Stream Mapping	3
Value Stream Costing	4
Flowcharts	6
Accounting Run Charts	7
Check Sheets	8
Traffic Analysis	8
Root Cause Analysis	9
The Lean Culture	10
A Note of Caution	11
The Failure of Lean Initiatives	11
The Complexity Conundrum	14
The Structure of this Book	14

Chapter 2 - Lean Customer Billing17

Improvement Concepts	17
Billing Processing	18
Billing Processing	18
Analysis of Billing Processing	18
Lean Billing Processing	19
Evaluated Receipts System	19
Payment in Advance	19
Systems Integration	19
Buffer Staff	20
Invoice Layout Improvement	20
Complex Invoice Separation	21
Invoice Proofreading	22
On-line Invoice Entry	22
Invoice Creation at Delivery Point	22
Invoice Creation at Shipping Dock	23
General: Pricing Simplification	23
Practices to Avoid	23
Analysis of Lean Billing Processing	23
Additional Improvement Concepts	25
Billing Measurements	25

Chapter 3 - Lean Cash Receipts28

Improvement Concepts	28
Check Receipts Processing, Basic Process	29
Check Receipts Process	29
Analysis of Check Receipts Process	29
Lean Check Receipts Processing (with Lockbox)	30
Bank Lockbox	30
Automatic Cash Application	30
Bank Feed	31
Analysis of Lean Check Receipts Process (with Lockbox)	31
Lean Check Receipts Processing (without Lockbox)	32
Apply from Check Copies	32
Remote Deposit Capture	33
Conduct Daily Bank Reconciliation	33
Analysis of Lean Check Receipts Process (No Lockbox)	34
Cash Receipts Processing	35
Cash Receipts Process	36
Analysis of Cash Receipts Process	36
Lean Cash Receipts Processing	36
Credit Card Receipts Processing	37
Credit Card Receipts Process	37
Analysis of Credit Card Receipts Process	37
Lean Credit Card Receipts Processing	38
Enter Information in On-line Form Immediately	38
On-line Payment Apps	38
Analysis of Lean Credit Card Receipts Process	38
Cash Receipts Measurements	39

Chapter 4 - Lean Accounts Payable42

Improvement Concepts	42
Supplier Invoice Processing	43
Supplier Invoice Processing	43
Analysis of Supplier Invoice Processing	44
Lean Supplier Invoice Processing – Complete Replacement	44
Evaluated Receipts Processing	44
Pay from Receipt	45
Analysis of Lean Supplier Invoice Processing	46
Lean Supplier Invoice Processing – Incremental Improvement	47
Procurement Cards	48
Supplier Entry of Invoices	48
Direct Invoice Delivery	48
Invoice Numbering Convention	48
Incoming Invoice Scans	48
Request Aggregated Invoice	49
Approval Minimization	49
Expense Report Auditing	49
Expense Report Outsourcing	49
Form W-9 Requirement	49
General: Centralize Accounts Payable	50
General: Supplier Reduction	50
General: Vendor Master File Examination	50
General: Supplier Naming Convention	50
Practices to Avoid	50
Analysis of Lean Supplier Invoice Processing	51
Check Payment Processing	52
Check Payment Processing	53
Analysis of Check Payment Processing	53
Supplier Payment Processing, Lean Approach	53
Recurring Payment Automation	54
Manual Check Reduction	54
Signature Stamp or Plate	54
ACH Payments	54
Practices to Avoid	55
Analysis of Lean Supplier Payments Processing	55
Additional Improvement Concepts	56
Accounts Payable Measurements	57

Chapter 5 - Lean Payroll60

Improvement Concepts	60
Payroll Data Collection	61
Timecard Data Collection	61
Analysis of Payroll Data Collection	62
Lean Payroll Data Collection	62
Convert Hourly to Salaried Pay	62
Data Collection Minimization	63
Computerized Time Clocks	63
Web-Based Timekeeping	64
Smart Phone Time Tracking	64
Copy Forward Hours Worked	65
Automated Time Tracking Reminders	65
Analysis of Lean Payroll Data Collection	66
Commission Processing	67
Commission Processing	68
Commission Processing Analysis	68
Lean Commission Processing	68
Commission Plan Simplification	69
Standard Commissions Report	69
Incentive Compensation Management Software	69
Analysis of Lean Commission Processing	70
Payroll Processing	71
Payroll Processing	71
Payroll Processing Analysis	72
Lean Payroll Processing	72
Payroll Cycle Duration	72
Off-Cycle Payroll Elimination	73
Outsource Payroll Processing	73
Payroll Data Entry by Employees	74
Payroll Data Entry by Managers	74
General: Prohibition of Employee Advances	74
General: Prohibition of Reimbursements through Payroll	74
General: Reduction of Pay Deductions	75
General: Combine Payroll Systems	75
Analysis of Lean Payroll Processing	75
Employee Payment Processing	76
Employee Payment Processing	76
Analysis of Employee Payment Processing	77
Lean Employee Payment Processing	77
Direct Deposit	77
Pay Cards	78
General: On-line Access to W-2 Forms	78
Analysis of Lean Employee Payments	78
Additional Improvement Concepts	80
Payroll Measurements	80

Chapter 6 - Lean Financial Statements83

Improvement Concepts	83
How Financial Statements are Usually Produced	84
The Production of Financial Statements	84
Analysis of Financial Statement Production	85
Lean Financial Statements	86
Financial Statement Avoidance	86
Task Interdependency Analysis	87
Correct Errors Early	88
Reconcile Accounts Early	88
Adjust Reserves Early	89
Alter Overhead Allocations Early	89
Review the Shipping Log Early	89
Review Billable Hours Early	89
Accrue Early	90
Accelerate Depreciation Calculations	90
Examine Commissions Early	91
Standardize the Accounting System	91
Centralize the Accounting System	92
Centralize Travel Bookings	93
Process Centering	93
Mitigate Information Dependencies	94
Standardize the Report Layout	94
Reduce the Financial Statements	95
Collect Report Information Early	96
Electronic Delivery	96
Defer Activities	96
Automation Solutions	97
Ongoing Process Improvements	98
Analysis of Lean Financial Statements	100
Financial Statement Measurements	101

Chapter 7 - Lean Credit Management104

Improvement Concepts	104
The Credit Management Environment	104
Traditional Credit Process	104
Analysis of Credit Management	105
Lean Credit Management	105
Credit Granting Consistency	106
Terms of Sale Consistency	107
Complete Information Gathering	107
Ongoing Information Gathering	107
Behavioral Trigger Analysis	108
Skew Credit Terms	108
Contact New Customers	109
Shift Risk to Credit Insurance	109
Analysis of Lean Credit Management	109
Additional Improvement Concepts	110
Credit Measurements	110

Chapter 8 - Lean Collections113

Improvement Concepts	113
The Collections Environment	113
Traditional Collections Process	114
Analysis of Collections	114
Lean Collections	114
Payment on Receipt by Customers	114
Payment in Advance	115
Payment by ACH Debit	115
Focus on Large Dollar Invoices	115
Accelerate Small Write-offs	116
Increase Collection Staff Efficiency	116
Notify Sales Staff	117
Contact New Customers	118
Problem Resolution Working Group	118
Prevent Deductions	119
Accelerated Escalation	119
Practices to Avoid	119
Analysis of Lean Collections	120
Additional Improvement Concepts	120
Collection Measurements	120

Chapter 9 - Lean Inventory Accounting123

Improvement Concepts	123
The Inventory Accounting Environment	124
Traditional Inventory Accounting	124
Analysis of Inventory Accounting	124
Lean Inventory Accounting	125
Perpetual Inventory System	125
Cycle Counting	125
Transaction Backlog Elimination	126
Bar Coded Inventory Transactions	126
Backflushing	126
Ending Inventory Estimation	127
Minimal Overhead Allocation	127
Lower of Cost or Market Limitation	128
Obsolete Inventory Tracking	128
Charge Inventory to Expense	129
Just-in-Time Deliveries	129
Drop Shipping	130
On-Site Inventory Ownership by Suppliers	130
Reduce Product Options	130
Analysis of Lean Inventory Accounting	131
Additional Improvement Concepts	131
Inventory Measurements	132

Chapter 10 - Lean Cost Accounting134

Improvement Concepts	134
The Cost Accounting Environment	135
Traditional Cost Accounting – Variance Analysis	135
Traditional Cost Accounting – Job Costing	135
Traditional Cost Accounting – Inventory Valuation	135
Traditional Cost Accounting – Margin Reports	136
Analysis of Cost Accounting	136
Lean Cost Accounting	136
Cost Derivation with Backflushing	137
Terminate Labor Tracking	137
Terminate Materials Usage Tracking	138
Terminate Variance Reporting	138
Minimize Overhead Allocation	139
Pull System	139
Terminate Work Orders	139
Cell-Level Measurement Systems	140
Constraint Analysis	140
Target Costing	141
Analysis of Lean Cost Accounting	143
Additional Improvement Concepts	143
Cost Accounting Measurements	143

Chapter 11 - Lean Fixed Asset Accounting147

Improvement Concepts	147
The Fixed Asset Accounting Environment	148
Traditional Fixed Asset Accounting	148
Analysis of Fixed Asset Accounting	148
Lean Fixed Asset Accounting	149
High Capitalization Limit	149
Minimal Base Unit Aggregation	149
Minimum Number of Asset Classes	150
Minimum Limit on Salvage Values	150
Interest Capitalization Avoidance	151
Common Depreciation Method	151
Annual Fixed Asset Audit	151
Fixed Assets Manual	152
Formal Documentation	152
Analysis of Lean Fixed Asset Accounting	153
Fixed Asset Measurements	153

Chapter 12 - The Lean General Ledger Environment155

Improvement Concepts	155
The General Ledger Environment	155
Number of Accounts	156
Mapping	156
Journal Entries	156
Account Contents	157
Analysis of the General Ledger Environment	157
The Lean General Ledger Environment	157
Account Reduction	157
Meaningful Account Codes	160
Standardized Chart of Accounts	160
Journal Entry Restriction	161
Journal Entry Checklist	161
Journal Entry Templates	161
Recurring Journal Entries	162
Account Content Review	162
Practices to Avoid	162
Analysis of the Lean General Ledger Environment	163
General Ledger Measurements	163

Chapter 13 - Lean Budgeting165

Improvement Concepts	165
The Budgeting Environment	165
Control Basis	166
Behavioral Impacts	166
Bureaucratic Support	167
Information Sharing	167
Inaccuracy	167
Analysis of the Budgeting Environment	168
A More Lean Approach to Budgeting	168
Error Checking	168
Summarization Comparison	168
Verification Rules	170
Capacity Verification	170
Step Cost Verification	171
Cash Flow Verification	171
Budget Simplification	172
Budget Procedure	172
Budget Pre-loading	173
Analysis of the More Lean Approach to Budgeting	173
The Ultimate Lean Budget	173
Operating without a Budget	173
Forecasting without a Budget	174
Capital Budgeting without a Budget	175
Goal Setting without a Budget	176
Compensation without a Budget	176
Analysis of the Ultimate Lean Budget	178
Summary	178

Chapter 14 - Lean Filing180

Improvement Concepts	180
The Traditional Filing Environment	181
The Filing Environment	181
Analysis of the Filing Environment	181
The Lean Filing Environment	181
Report Purge	182
Copy Elimination	182
Individual Folder Creation Policy	182
Record Pre-Sorting	182
Document Destruction Policy	182
Off-Site Storage	183
Filing Cabinet Locations	183
Filing Carts	183
Longer Archiving Intervals	184
Storage Improvements	184
Document Imaging	184
Document Consolidation and Clarification	185
The Tickler File	185
Mis-Filing Solutions	186
Practices to Avoid	186
Analysis of the Lean Filing Environment	187

Chapter 15 - Lean Controls and Procedures189

The Genesis of Accounting Controls	189
The Proper Balance of Control Systems	190
The Nature of Risk	191
Common Fraud Risk Factors	192
Control Principles	193
The Failings of Internal Controls	194
Special Case - Acquisitions	195
Special Case – Employee Turnover	196
Special Case – Rapid Growth	196
Terminating Controls	197
The Nature of a Procedure	197
The Need for Procedures	198
The Number of Procedures to Develop	199

Answers to Chapter Questions201

Glossary216

Index221

Course Details

Author: Steven M. Bragg, CPA

Steven Bragg, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He received a master’s degree in finance from Bentley College, an MBA from Babson College, and a Bachelor’s degree in Economics from the University of Maine. He has been a two-time president of the Colorado Mountain Club, and is an avid alpine skier, mountain biker, and certified master diver. Mr. Bragg resides in Centennial, Colorado. He has written more than 300 books and courses, including New Controller Guidebook, GAAP Guidebook, and Payroll Management.

Publication/Revision Date: 1/11/2026

Course Exam Questions (online): 70 (multiple-choice)

Program Delivery Method: NASBA QAS Self-Study

Available Formats of Course Text: Downloadable PDF, Printed/Mailed

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors I.D.: 107615

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Cite the tools used to create a lean accounting system.
Identify the techniques used to reduce billing problems.
Specify the steps in the processing of cash receipts.
Cite the techniques used to streamline the processing of payables.
Specify the methods available for creating a leaner payroll process flow.
Recognize the revisions used to accelerate the closing process.
Cite the types of protections available for mitigating credit losses.
Recognize the tools used to manage the collections function.
Specify the methods used to increase inventory record accuracy.
State the types of traditional cost accounting reports, and the situations in which these reports can be used or avoided.
Recognize the characteristics of lean production environments, pull systems, and bottleneck-focused systems.
Specify the situations in which work-in-process tracking is not required.
Cite the effects of interest capitalization and the capitalization limit on fixed asset recordation.
State the effects of an acquisition on the general ledger.
Recognize the arguments favoring a reduction in the number of general ledger accounts.
Recognize the methods used to streamline and verify the budget model.
Cite the situations in which separation of duties is needed.
Describe how the outlier analysis concept can be used.
Recognize how controls can fail in special situations, such as during acquisitions, employee turnover, and rapid growth.
Specify the techniques available for minimizing employee movement within the accounting department.
Recognize the available solutions for minimizing record mis-filings and locating missing records.
Specify how controls can remain robust during a period of rapid growth.
Identify the situations in which weak controls are acceptable.

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