When designing an accounting information and costing system, it is important to consider the function it plays in providing information for both financial and managerial accounting purposes. Financial accounting reports are prepared for external parties in accordance with generally accepted accounting principles (GAAP), and their emphasis is on the past performance of the company as a whole. On the other hand, managerial and cost accounting information is designed to meet the needs of internal users, and in a lean environment, provides information by value stream as both a feedback mechanism and a planning tool for value stream teams. A properly designed value stream costing system is cost-effective, reduces wasteful transactions, and is able to serve both functions in a lean organization-external GAAP-compliant financial reporting at the enterprise level and internal management reporting at a value stream level.