An urgently needed order has been awaiting approval for three days. A supplier invoice is sitting with an executive who is currently on vacation. The accounting department is asking for updates, purchasing is chasing it up, and management is finally being brought in.
Such situations cost time and hinder collaboration. Yet approvals are fundamentally useful: they support the control of expenses, the verification of services rendered, and clear accountability for decisions.
It becomes difficult when a company requires approvals but has not clearly regulated the process. Who is authorized to decide? What documentation is required? What happens in the event of an absence? And when must a query be escalated to the next level of management?
A reliable approval process answers these questions before the next transaction occurs.
1. Distinguish between ordering, invoice verification, and payment
Approving an order means entering into a financial commitment. Factually verifying an invoice means determining whether the agreed-upon service has been provided. Authorizing a payment means approving the actual outflow of funds.
These decisions have different purposes. Therefore, companies should explicitly distinguish them within their processes.
For an order, the focus is on requirements, budget, supplier, and terms. Invoice verification involves checking, for example, for consistency with the order and proof of performance. Before payment, open questions, due dates, and internal controls must also be considered.
An already approved order should serve as a reference. If the invoice, order, and confirmed delivery match, the subsequent steps can often be simplified. However, additional costs or deviating services require a new decision.
Practical example: A company approves the purchase of a device for 4,000 euros. Later, the supplier invoices an additional 600 euros for assembly. The original order approval does not address whether this additional service was commissioned and performed. The process must make precisely this discrepancy visible.
2. Create an approval matrix with clear roles
An approval matrix describes which role is authorized to decide on which transaction. It should fit the company and be easy to understand in daily operations.
In addition to the amount, other criteria may be important:
- Is the expense included in the approved budget?
- Is it an existing or a new supplier?
- Is this a one-time expense or a long-term commitment?
- Are there deviations from agreed-upon terms?
- Does the transaction affect multiple departments?
Illustrative example for an internal policy:
| Transaction | Responsible Approval |
|---|---|
| Routine order up to 1,000 euros within budget | Responsible Team Lead |
| Order between 1,000 and 5,000 euros | Department Head |
| Order over 5,000 euros or outside of budget | Management |
| Invoice without order reference or with unexplained deviation | Factual responsible party before further processing |
These amounts are chosen as examples and are not universally applicable requirements. Value thresholds should be determined based on company size, procurement volume, and risk. For contracts, the total obligation must be considered, not just a single monthly installment.
The separation between requesting and approving is also important. Those who initiate an expense should not automatically be able to approve it alone.
3. Provide complete decision-making documentation
Many approvals take a long time because information is missing. A message saying "Please approve quickly" forces the responsible person to perform research first.
A complete purchase requisition should at least contain the supplier, description of services, amount, budget allocation, requested date, and a brief justification. Offers or contract documents should be directly accessible.
Different information is required for factual invoice verification: order reference, delivery note or proof of performance, responsible department, and identifiable deviations.
A simple rule helps here: every transaction is prepared in such a way that the approving person can make a decision without searching through multiple mailboxes.
Missing documents should trigger a clear status, such as "Query to requester." This makes it clear why the transaction is waiting. Without this distinction, every delay appears as slow processing by the approving authority.
4. Bindingly regulate proxies and escalations
An approval process must also function during vacations, illnesses, and business trips. For every decision-making role, there should therefore be a designated substitute.
The substitute requires both organizational authority and the necessary system access. A name in a process description helps little if the person in question cannot open or process the transaction.
Additionally, companies should set reasonable processing times. A routine order can, for example, be checked within two working days. Larger investments might require more time. The key is that the deadline fits the transaction.
If there is no response, a reminder follows first. Afterward, the transaction is forwarded to a defined entity. An escalation means a reassignment of the decision; it should not automatically count as approval.
Urgent exceptions require their own path. This includes a justification for the urgency, a responsible decision-maker, and retroactive documentation. Otherwise, "urgent" quickly becomes the standard way to bypass the regular process.
5. Set up digital approvals based on clear rules
Once roles and decision paths are clarified, digital tools can support implementation. They distribute tasks, show processing statuses, and facilitate documentation.
Microsoft Power Automate, for example, supports approvals where all assigned persons must agree, a first response is sufficient, or multiple approvals are obtained sequentially. The choice of approval type must fit the desired decision rule. Microsoft Learn
For independent checks, parallel processing can be useful. If, however, the factual verification must be completed first before a budget deviation is decided, a fixed sequence is more appropriate.
Microsoft also describes processing approval requests via Outlook, Microsoft Teams, or the Power Automate Action Center. The required licenses, permissions, and technical prerequisites should be checked before implementation. Status of these functional specifications: October 1, 2026. Microsoft Learn
Even with digital implementation, every transaction should have a unique reference, a status, and a responsible role. If an amount is changed after approval, it must be determined when a new approval is required.
6. Start with a limited pilot area
Companies do not have to change all approvals immediately. A pilot area with manageable volume reveals weaknesses and facilitates adjustments.
Fictional practical example: A service company processes 180 incoming invoices per month. Previously, they were forwarded by email. Accounting often cannot tell who is currently reviewing them.
For one business unit, order references, factual responsibilities, and proxies are therefore bindingly stored. Invoices receive the statuses "received," "under review," "query," and "approved." Deviations are marked separately.
After four weeks, the team evaluates:
- What is the average time for an approval?
- How many transactions require queries?
- Which transactions exceed the internal processing deadline?
- How frequently is management brought in?
- Does the proxy system work during absences?
The company thus receives a concrete basis for improvements. Only then is the process applied to other areas.
Improve approval processes with ELB Services
ELB Services supports companies in recording commercial workflows, clarifying responsibilities, and implementing practical processes. Process optimization and operational support are part of the described range of services. ELB Services
For approval processes, this includes, for example, the development of a suitable approval matrix, the definition of necessary documentation, proxy rules and escalation paths, as well as alignment with existing systems.
Are your orders and invoices regularly left sitting? Talk to ELB Services. Together, we will develop an approval process that accelerates decisions and makes responsibilities transparent.
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