Lean Accounting to Reduce Lead Time in the Expenditure Cycle
Abstract
This study analyzes the causes of long payment lead times in the Accounts Payable (AP) process at PT XYZ, an oil distribution company, and suggests improvements based on Lean Accounting principles. The company's vendor payment lead time target is 5 working days, but actual lead times range from 8 to 11.25 days, with only 44–63% of the target achieved. Key issues identified include redundant verification steps, delays in three-way matching (PO, GR, and invoices), and the reliance on physical documents that cause waiting and transportation waste. The process also faces delays due to approval queues, repetitive checks, and document errors requiring rework. Data was collected through interviews with key personnel, field observations, and document analysis. The root cause analysis revealed that the current process is based on a traditional accounting model, focusing on control through multiple manual checks instead of prevention and automation. The proposed Lean Accounting-based improvements include: (1) simplifying verification to a single control point with ERP system support, (2) reducing approval levels from six to three, with spot checks for supervisors, (3) adopting accounting by exception for high-value transactions and new vendors, (4) streamlining document processing to avoid batch waiting, (5) digitizing the process with a vendor portal, and (6) improving error prevention early in the process to reduce rework.
Downloads
References
Ali, S. B., Khan, Z. S., & Shah, Z. A. (2021). Lean Accounting System: Importance and Successful Implementation. Journal of Contemporary Issues in Business and Government, 27(3).
Cesaroni, F., & Sentuti, A. (2014). Implementing a Lean Accounting System in a Lean Enterprise. Department of Economics, Society, Politics, University of Urbino.
Ditkaew, K. (2022). The effect of Lean Accounting Implementation on organizational Performance. International Journal of Asian Business and Information Management, 13(1).
Fullerton, R. M., & Kennedy, F. A. (2009). Accounting for a Lean Environment.
Hall, J. A. (2011). Accounting Information Systems (7th ed.). Cengage Learning.
Harmon, P. (2019). Business Process Change: A Business Process Management Guide. Morgan Kaufmann.
Heizer, J., Render, B., & Munson, C. (2017). Operations Management (12th ed.). Pearson.
Kaplan, R. S., & Anderson, S. R. (2007). Time-Driven Activity-Based Costing. Harvard Business Review.
Kennedy, F., & Brewer, A. (2009). Lean Enterprise: Applying Lean to the Accountancy Function. International Journal of Lean Six Sigma.
Lieratur, A. (2021). Improving Lead Time Efficiency in Energy Distribution. Journal of Energy Economics.
Ool, A. (2019). Operational Inefficiencies in Accounts Payable. Journal of Business Process Management.
Ool, A. (2019). Reducing Lead Time in Accounts Payable with Lean Accounting. Journal of Accounting Research.
Romney, M., Steinbart, P., & Summers, S. (2024). Accounting Information Systems. Pearson.
Toha, M., Ulfa, E., & Novi Yanti Sandra Dewi. (2021). Analysis of The Implementation of Sharia Strategy Management at BMT Maslahah. Majapahit Journal of Islamic Finance and Management, 1(1), 29–40. https://syariah.jurnalikhac.ac.id/index.php/majapahit/article/view/3
Womack, J. P., & Jones, D. T. (1996). Lean Thinking. Simon & Schuster.
Yousef, A., & Elrahman Atef, A. (2015). Lean Accounting: An Effective Method to Improve Business Performance. Journal of Financial Management.
Copyright (c) 2026 Yuni Fitrantinah, Viska Anggraita
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
