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
Your approval workflow should include rules for what types of orders require approval, the approvers identified, how many approvals are needed, purchasing price limits, and spending limits. Some approvals may also need to be obtained in a defined order.
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.
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 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