Features of a Purchase Order Approval Workflow

In any organization that makes frequent purchases, it's essential to have a streamlined process for approving purchase orders. Otherwise, you can end up with delays, duplicate orders, and other problems. 

Here are features to consider when planning your PO Approval Workflow

Approval Rules

Your approval workflow, supported by effective purchasing software, should include rules for determining which types of orders require approval. This involves identifying the appropriate approvers, specifying the required number of approvals, setting purchasing price limits, and establishing spending limits. Additionally, certain approvals might need to be obtained in a defined sequence.

Approval Users

These people have the authority to approve or reject a request. In a PO approval workflow, approval users are typically the people in charge of ordering goods or services for the company and may have different levels of authority. For example, some approval users may be able to handle approval requests for small quantities, while others may approve large purchases.

Approval Hierarchy

An approval hierarchy is when the process involves multiple levels, with different approval users at each level. Without an approval hierarchy in place, it would be very easy for someone to make an unauthorized payment or approve an invoice for payment without proper documentation.

Procurement Software

Procurement software can play a valuable role in streamlining the process. For instance, many procurement software programs include features that allow users to create and submit a purchase requisition and track the status of their approval requests. This can be particularly helpful when it comes to keeping tabs on requests that are pending approval. A procurement software can also help identify and use only authorized vendors.

Having a streamlined process for approving purchase orders is essential in any organization that makes frequent purchases. By considering the features listed above, you can create an approval workflow that is tailored to your specific needs and helps avoid delays, duplicate orders, and other problems.

Want to dive deeper? Visit our Approval Matrix blog post