What it means
Many business problems come from processes that nobody has seen written down. A map makes the work visible by showing each step, the person or team responsible, the inputs and outputs, and the decision points.
Once the process is on paper, the gaps and bottlenecks become obvious. Common formats include a simple flowchart, a swimlane diagram (which gives each team its own horizontal lane) and a value stream map that adds timing data.
The right choice depends on the question being asked. A swimlane is good for handovers between departments, while a value stream map is good for finding where time is lost.
Finance teams use process mapping on activities such as purchase to pay, order to cash, month end close and expense approval. Mapping these reveals duplicate approvals, manual re-keying of data and steps that exist only because of old habits.
It also supports internal control, since a map shows where checks and segregation of duties (splitting tasks between people to prevent fraud) should sit. A map usually has two versions.
The as-is map shows how the process actually works today, which often differs from the official procedure, and the to-be map shows the improved design. Comparing the two gives the case for change.
It is best to build the map with the people who do the work rather than for them. Frontline staff know the workarounds and the delays, and involving them also makes it more likely that the new process will be followed.
A map that sits in a folder and is never updated quickly loses its value. Good maps also carry numbers.
Recording the time each step takes, how often errors occur and how many people are involved allows the finance team to put a dollar value on delays and to compare options.
In practice
Real-world examples
Example 1
A distribution company maps its order to cash cycle and finds that invoices are issued four days after delivery because a paper delivery note must be physically passed to the billing clerk. Moving to electronic delivery confirmation brings invoicing to the same day and cuts days of receivables, which frees cash that had been tied up in unpaid invoices.
Example 2
A hospital finance team maps the supplier payment process and discovers that each invoice is approved by three people, two of whom only forward it on. Removing the unnecessary approvals saves around 2 hours per invoice, with controls kept in place for high-value items.
Example 3
A software startup maps its monthly close and finds that bank reconciliation waits for a report that arrives on day 5. By automating the bank feed, the finance team brings the close forward from day 10 to day 6, so management reports reach the board four days sooner.
Think of it
Process mapping is like looking at a satellite map of a congested city drive. Instead of being stuck in traffic wondering why you are not moving, you see the whole route from above, spot the broken traffic lights causing the queue, and plan a much faster alternative.
Formula
Calculation
Process cycle efficiency = value-adding time / total lead time x 100
Suppose an invoice approval process has a total elapsed time of 60 hours from receipt to payment approval. The mapping exercise finds that only 3 hours are spent on work that adds value, such as checking the invoice against the order, and the remaining 57 hours are queues and waiting. Process cycle efficiency is 3 / 60 = 0.05, or 5%. If a redesign cuts the waiting time to 17 hours, the total becomes 20 hours and efficiency rises to 3 / 20 = 15%.Case study
Seen in the real world
Westbrook Textiles is an illustrative, fictional company whose expense claims took an average of 18 days to reimburse. Staff complained, and the finance manager suspected the problem was in the approval chain rather than in the payments themselves.
A workshop with employees, managers and the payroll clerk produced a swimlane map. It showed that claims were printed, signed, scanned, emailed and re-entered by hand, and that managers often held them for a week. The team introduced an online claim form with automatic routing, and the illustrative average fell to 5 days.
The finance manager repeated the exercise six months later and found that two new workarounds had crept in, so she scheduled a yearly review. The map was pinned in the shared drive, and each change to the form was recorded on it. The illustrative company now treats the map as a living document rather than a one-off project.
Watch out
Common mistakes
- Mapping how the process should work in theory instead of how it actually works today.
- Drawing the map without the people who do the work, so key workarounds are missed.
- Treating the map as the finished job, when value only comes from acting on what it reveals.
Questions
People also ask
What is the difference between a flowchart and a swimlane diagram?
A flowchart shows the steps in order, and a swimlane diagram also shows which person or department is responsible for each step.
How detailed should a process map be?
Detailed enough to show the steps, owners and delays that matter, but not so detailed that nobody reads it.
How often should a map be updated?
Whenever the process, system or team changes, and at least once a year for core finance processes.