GlossaryEN1 min readUpdated: Jun 16, 2026

Backflush Accounting

Lean manufacturing needs lean accounting.

Quick Answer

Last updated: 16 June 2026Published: 19 June 2025

Source: https://www.investopedia.com/terms/b/backflush-accounting.asp

Category

Logistics Concept

Reading time

1 min

Words

104

Mentioned in

–

Definition & Explanation

Lean manufacturing needs lean accounting. Backflush accounting reduces administrative overhead by skipping real-time material transaction recording: instead of posting each component withdrawal individually, the system waits until a finished product is completed, then works backward through the bill of materials to calculate raw material consumption based on actual output. This suits just-in-time environments where inventory levels are low and transaction volumes are high. The trade-off is delayed variance detection – scrap, yield losses, or substitutions only surface at order completion. Accurate bill-of-materials data and reliable scrap rates are therefore essential. Most major ERP platforms offer backflush as a configurable option for production order costing.

Next steps

Tools that match this term

Find HS codeDetermine the tariff number for customsOpen Calculate customs valueWork out import duties and customs valueOpen Compare IncotermsClarify duties, cost and riskOpen Calculate transit timeEstimate duration per transport modeOpen

Related Terms

You might also be interested in these terms

VAT Deferment Account

When a shipment clears customs, import VAT would ordinarily be due on the spot – a VAT deferment account solves that cash-flow pro…

Learn more

Import VAT deferment account suspension

When a customs authority suspends an import VAT deferment account, the importer immediately loses the right to defer payments – al…

Learn more

Import VAT deferment account reactivation

Reactivation of an import VAT deferment account is the formal administrative act by which a customs authority restores a suspended…

Learn more

customs account charge

When a customs authority reviews an import declaration and determines the duties owed, the resulting amount is posted as a charge …

Learn more

Tax deferral account block

A tax deferral account block is a suspension placed on a customs deferment account that prevents any new import duties or VAT from…

Learn more

import VAT deferral account sanction

Unlike a straightforward monetary fine, a sanction on an import VAT deferral account is an administrative measure imposed by custo…

Learn more

Logistics knowledge straight to your inbox

Weekly: Top news, industry facts and insights from the world of logistics – free.

Backflush Accounting

Next steps

Related Terms

VAT Deferment Account

Import VAT deferment account suspension

Import VAT deferment account reactivation

customs account charge

Tax deferral account block

import VAT deferral account sanction

Logistics knowledge straight to your inbox

Community Questions & Answers