Traditionally applied to manufacturing, lean principles can apply to the financial function as well. Finance teams can improve their performance by focusing on value-adding activities, minimizing waste and continuing improvement. This includes standardizing processes, automating tasks and using a flexible IT infrastructure. This can enable a more streamlined and agile financial operation with reduced operating costs.

Lean principles focus on identifying and eliminating inefficient processes that do not produce value for customers. The goal is to make the customer’s experience with your service as satisfying as possible, which can be done in a number of ways. For example, a coffee shop may minimize waste by speeding up service and streamlining operations to get customers in and out faster – and happier.

In the case of a finance department, minimizing waste could mean shifting time and resources from low or non-value-adding activities, such as manual reporting, to those that create real value, such as providing insights for informed decision-making. It also means using a value-stream approach to reporting, which makes it easier to track the entire cost of the process. This can replace traditional allocations of overhead costs to products with a flow-optimized view that allows all the steps in the process to be tracked and measured.

By applying the principles of lean management to their finance functions, companies can achieve a more nimble and effective business model that positions them for long-term success. By eliminating wasted processes, focusing on delivering valuable information to stakeholders and establishing an open culture of continuous improvement, finance departments can become more responsive to their clients and provide better, more accurate financial services.