Examples of Lean A/P or A/R in Hospitals?


    Got this question from a reader:

    After successful application of lean to clinical processes we are moving into the the finance/accounting transaction areas such as A/P and A/R and month end close and are finding a more difficult road to interpret lean applications. I noticed there was not much discussed in your lean book about the application in accounting transactions. Do you have any suggestions, books, examples of the application of lead principles to hospital accounting/finance transactions?

    You're right, transactional processes aren't covered that deeply in my book because there are already a number of good books and references about “Lean Accounting” and “Lean Office” out there. I believe these concepts and examples would translate pretty directly, as opposed to bringing factory floor concepts into a healthcare setting.

    I don't know which book is best, specifically. “Office Kaizen” was fine (read it a few years back) but I see lots of other books on the market.

    The “lean accounting” movement is often more about changing accounting rules to be more compatible with lean operations, but if you research that community, you might find some leads on making AR and AP more efficient.

    What recommendations to you have, blog readers? Anything specific to hospital accounting, or using Lean methods to make accounting processes better?

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    Mark Graban
    Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


    1. Lean efforts in accounts receivable and accounts payable are pretty common – at Rockwell Collins, we made some great improvements in the collection cycle and in organizing the payables process. There are also several references to improvements in a/r in healthcare – I’ve seen info from ThedaCare and Lean Healthcare West that show significant improvements in cash flow due to Lean activities.

    2. The revenue cycle is at a tipping point. With the implementation of hipaa transactions, e-commerce and work engines, the new process has the potential of reducing operational costs by 50%. There will always be current processes that can be tweaked but to garner significant savings the mantra needs to be a “no touch” environment..

    3. Lean Accounting is the application of lean principles to Finance and Accounting processes, including A/P and A/R.

      Jean Cunningham Consulting is a leader in applying these lean principles, providing lean education and kaizen facilitation which results in significant improvements over a 2 – 3 day period.

      Jean Cunningham’s first Shingo Award winning book, “Real Numbers” describes real-world experiences in applying lean to Finance and Accounting.

      In addition, we are offering a new workshop on Lean and Cash Collections – currently scheduled in Chicago and Indianapolis in April with more locations to follow.

      Please feel free to visit our web site at http://www.jeancunninghamconsulting.com for more information on Jean Cunningham Consulting’s service offerings.

      Janice Frampton
      Senior Lean Consultant
      Phone – 978-692-9150
      Mobile – 978-866-9812

    4. Dera sir
      if you please send me a scientific material on ” lean accounting” and practical examples ,because i am very interested in , and preparing for Phd


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