Biggest-benefits-process-mapping-blog

The 11 biggest benefits of finance process mapping

In Process Improvement by Tamara

Reading Time: 6 minutes

Process mapping is one of the most powerful tools that a business can use in its transformation journey and it is often the first thing we look to do when we work with a client.

For any business that wants to transform itself, a process map can form the fulcrum upon which the whole project sits.

But often we find that businesses don’t bother to work out what their processes are because they don’t really understand what the benefits could be.

In this article, inspired by our recent Financial Transformation Live session “Getting started with mapping out your finance processes” we are looking at the main benefits for any organisation that is looking to improve.

In this post we will cover;

  • What is process mapping?
  • Why should we process map?
  • Transparency
  • Risk reduction
  • Productivity improvements
  • Compliance
  • Clarity
  • Consistency
  • Complexity insight
  • Identifying bottlenecks
  • Enable Knowledge transfer
  • Embed best practice
  • Enable continuous improvement

What is process mapping?

Process mapping is the act of recording all the steps you take to get a particular job done.

For example, you may want to map the process for sending out an invoice to a customer, setting up a new supplier or generating and inputting a depreciation journal.

Although it sounds impressive, it is actually really simple to do, and the benefits it can bring are remarkable.

Our advice is to think of process mapping as a tool that you use on your transformation journey rather than a destination.

And always think of this as something that is always there rather than a thing you do once and then forget about.

Why should we process map?

Mapping all of your processes is time-consuming and frankly can appear to be a rather overwhelming thing.

Before you start it can seem to be a job that is too difficult or will need too many resources but don’t give up.

Instead, break it down and deal with processes that you feel are taking too much time or that people continually complain about.

Once you have process mapping in place, we confidently predict you’ll see the following benefits.

If you need help getting started, we have a free guide you may find useful: The Getting Started Guide – Streamlining your processes.

Transparency

Transparency gets people asking why we do things. 

Do we even know what we are doing?

Do we know when we do it?

Do we understand why we do it in a particular way?

The benefit here is in the answer to these questions. If the answer comes back “because we have always done it that way” then you’ll know that there are some productivity improvements just waiting to be unlocked.

Clarity

Once we have transparency over what is going on, we can then produce clarity over the systems, people and steps involved in a particular job. 

We can use our process maps to understand where data is going and whether we are duplicating both data and tasks.

All of a sudden, it becomes clear where systems aren’t properly integrated, or where people are having to do manual tasks due to shortcomings in software.

We will also be able to see where cooperation with other departments, suppliers and customers could be better.

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Risk reduction

Risk isn’t one of the sexy bits of running a business but understanding your attitude to it and the areas that are inherently risky is an important skill of a successful executive.

Risk reduction, in general, means more controls but if you don’t know what the processes are then you can’t implement controls.

As you go through the mapping process, you’ll start to see parts that have high-risk levels.

As an illustration, you may see that your process for setting up a new supplier includes no credit check, or you don’t do any tests to see if the company actually exists.

The process mapping operation shines a light on areas where risk is increased or unacceptable.

Productivity improvements

If you want to improve productivity then you need a baseline to start with. 

What areas are taking a lot of time? 

What needs the most manual input?

Your initial process map will show you what operations are problematic and will identify the points that can be changed.

We often find that people are doing things because they always have, even though the need for that part of the job actually ceased a while ago.

Being able to strip out unneeded tasks or make changes that makes them quicker is definitely one of the biggest benefits of process mapping.

Compliance

If you are ISO accredited or you are looking to adopt the standards then process mapping is not optional.

ISO accreditation requires that you have process maps in place but in many cases, having a process map for your key jobs will also help in other regulated sectors.

Typically, companies will have to assure regulators that they understand their risk and that they are treating customers and suppliers fairly.

Consistency

If you have more than one person doing the same process, mapping each will show you where there are inconsistencies in delivery.

This is important because your risk register may have looked at only one way of carrying out a job and missed other ways that aren’t compliant.

It is also important to have a consistent approach to delivering services so that your customers receive the best experience possible.

Complexity insight

Complexity is the enemy of productivity. The more complex a job is, the longer it is likely to take and the more chance of errors being introduced.

In a process map, simple processes will shine through and processes that have become overly complex over time will be highlighted for further action and streamlining.

Identifying bottlenecks

Sitting alongside productivity improvement, a good process map will show you where the bottlenecks are and allow you to solve them.

Bottlenecks can be the bane of any self-respecting production line supervisor’s life, but they exist in all areas of an organisation and finance is no exception.

If people are waiting for other things to be done it will typically slow down things like month-end, supplier payments and staff expenses.

So spotting your bottlenecks then gives you the opportunity to remove them and improve productivity as a result.

Enabling knowledge transfer

As a business grows one of the biggest problems that becomes evident is that so much knowledge is actually held in people’s heads.

This is fine when you are an owner/manager but when you have 10, 20, 50 people, it becomes more and more difficult to onboard new staff successfully.

Process mapping codifies organisational knowledge and makes it available for any people joining later to understand what is going on.

A good process map can also form the basis of a training and onboarding programme too.

Embedding best practice

We’ve spoken about eliminating blockages, improving productivity and reducing complexity, now is the time to embed that in the company’s DNA.

As a part of the process mapping project, you’ll be able to learn what constitutes best practice for your organisation and that will lead to understanding when you are moving away from it.

Developing your best practice and then embedding that into your controls and training means that you are moving away from an informal management style to a more professional organisation.

Enable continuous improvement

We mentioned earlier that process mapping shouldn’t be seen as a one-time thing but more of a tool to use on the finance transformation journey.

Interestingly though, we don’t think that process mapping is ever finished.

You see what works today may not be the best method tomorrow.

As you move from process to process you’ll be making changes and adjusting the way you work. Some of these will have knock-on effects to the extent that revisiting earlier work may pay even greater dividends.

A process of continuous development means that although gains at a later date may be smaller, they will be easier to achieve as you will already have a basis to work from.

Building in a process mapping continuous development programme means that your team, department or company will always be moving forward and developing greater capability.

Want to know more?

If you are on a finance transformation journey then we have some good news!

We’re producing a series of live sessions as part of Financial Transformation Live that help with specific aspects of the transformation process and you can access them all for free here.

Don’t forget to subscribe for advance notifications of new live sessions and webinars. You can also follow us on LinkedIn to make sure you don’t miss any of our future sessions.

The next Financial Transformation Live session will be taking place on the 26th of April at 11am and we will be covering ‘Re-engineering your Finance Processes’. You can subscribe to this session on LinkedIn, here.

Here at itas, we specialise in helping companies transform their businesses so if you’d like some help on your transformation journey, get in touch and let’s talk.

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