Today we’ll explore the best practices in a purchase order approval workflow with examples and solutions.
Picture this: It’s month-end, and you’ve just discovered that someone ordered $5,000 worth of supplies without proper approval. Your budget’s blown, and now you’re stuck explaining this to the boss. Sound familiar? If you’re nodding your head, you’re not alone – messy approval workflows are the arch-nemesis of smooth procurement.
Why Your Approval Workflow Probably Needs Work
Let’s be honest – most businesses’ purchase order approvals look more like a game of hot potato than a streamlined process. Emails flying everywhere, approvers playing hide and seek, and nobody quite sure where that urgent order is stuck. But here’s the thing: it doesn’t have to be this complicated.
The Real Cost of Poor Approval Workflows
Before we dive into the good stuff, let’s talk about what’s at stake:
- That one time someone ordered 1,000 units instead of 100
- The emergency order that sat in someone’s inbox for a week
- The duplicate orders because nobody knew the first one was already approved
- The vendor who’s threatening to cut you off because of late payments
Any of these keeping you up at night? Thought so.
Building a Bulletproof Approval Workflow
1. Clear Authority Levels (Who Can Approve What)
Stop playing the “I thought you were handling this” game. Set crystal clear limits:
- Under $500: Team lead approval
- $500-$5,000: Department manager
- $5,000+: Executive approval
2. The Golden Rules of Routing
Think of your approval workflow like a GPS – it should always know the best route:
- Create clear paths based on department, amount, and type
- Build in backup approvers for when people are out
- Set maximum response times (no order should sit for days)
- Make sure everyone knows their role in the chain
3. Documentation That Actually Makes Sense
Your approval process should leave a trail even Hansel and Gretel would be proud of:
- Who requested what and when
- Every approval or rejection (with reasons)
- Any changes or notes along the way
- Final approval status
4. Emergency Protocols (Because Stuff Happens)
Sometimes you need things yesterday. Have a plan for urgencies:
- Designated emergency approvers
- Clear criteria for what constitutes an emergency
- Fast-track options that don’t completely bypass controls
- Post-approval review process for emergency purchases
Common Workflow Disasters (And How to Avoid Them)
The Bottleneck Boss: You know the type – has to approve everything but is always too busy.
Solution: Create realistic approval thresholds and delegate authority. Your CEO probably doesn’t need to approve every $50 purchase.
The Missing Approver: When key people are out, orders shouldn’t go into limbo.
Solution: Always set up backup approvers and clear delegation rules.
The Information Black Hole: When nobody knows where orders are in the approval process.
Solution: Use a system that provides real-time visibility to all stakeholders.
Making Technology Work For You
Modern approval workflows shouldn’t feel like herding cats. Here’s what good software should do:
- Automatically route orders based on your rules
- Send reminders to lazy approvers
- Provide mobile access (because approvers aren’t always at their desk)
- Keep a detailed audit trail
- Flag unusual orders or amounts
The Human Factor in a Purchase Order Approval Workflow
Technology is great, but people make the process work. Remember to:
- Train everyone involved in the process
- Get feedback from users and approvers
- Regularly review and update your workflows
- Keep communication channels open
Red Flags Your Approval Process Needs Work
- Orders regularly get “lost” in the system
- Approvers don’t know what they’re looking at
- Emergency approvals become the norm
- Nobody can tell you where a specific order stands
- Duplicate orders are a regular occurrence
Making the Change
Improving your approval workflow doesn’t have to be painful. Start with:
1. Map your current process (all the messy parts included)
2. Identify your biggest pain points
3. Set clear goals for improvement
4. Choose the right tools for your needs
5. Roll out changes gradually
6. Get feedback and adjust
Try DashPO now for an effective Purchase Order Solution
The Bottom Line
A solid purchase order approval workflow isn’t just about control – it’s about making everyone’s life easier. When done right, it:
- Speeds up legitimate purchases
- Prevents costly mistakes
- Keeps everyone informed
- Maintains proper controls
- Reduces stress for everyone involved
Remember, the goal isn’t to create bureaucracy – it’s to build a process that protects your business while helping it move faster. Whether you’re handling ten purchase orders a month or a hundred a day, getting your approval workflow right can transform procurement from a headache into a strategic advantage.
