ABSTRACT
A simplified time-based accounting system combines the best of value stream accounting and throughput accounting. The recommended approach resolves the criticism of Lean accounting—a total disregard for capturing detailed product costs. Critics point out that the Lean accounting approach provides insufficient information for product pricing, profitability, and make/buy analysis. Increases in Contribution per Day clearly translate to cash and results. The higher the number, the better. Increases in the contribution numerator will improve the number. Increases in the numerator can be achieved by increasing velocity and reducing costs. In a time-based strategy, the desired outcomes are customer responsiveness and throughput.
