How To Set Up A Purchase Order Approval Process
- Robert
- 23 hours ago
- 5 min read
Table of contents
Here is a podcast summary of the entire article if you don't have time to read it in full:
Introduction
If you’ve ever chased down managers for approvals, lost a PO in someone’s inbox, or discovered a “surprise” purchase after the fact, you already know: a broken purchase order approval process costs more than it saves.
Most procurement teams have a workflow on paper. Few have one that actually works - efficiently, transparently, and in sync with how people really buy things.
This guide will walk you through:
How to design or fix your PO approval process (from request to payment).
The human side - why delays, politics, and unclear ownership ruin even the best workflows.
A ready-to-use approval matrix template you can adapt today.
Key metrics to measure & improve your approval flow.
Common mistakes and root causes that quietly drain efficiency.
Why You Need a Well-Designed Approval Process
At its core, an approval workflow is not about control - it’s about clarity.
It defines:
Who can approve spending.
What needs approval (and what doesn’t).
When it should happen.
How it’s tracked and communicated.
A clear process balances two goals that often conflict: protecting budgets and compliance while enabling speed and agility. Without that balance, teams fall into one of two traps. There's the bureaucracy trap, where everything needs five signatures and nothing moves. Then there's the chaos trap, where everyone buys what they want and nothing aligns with organizational priorities.
The right approval process sits in the middle - structured enough to prevent maverick spend, yet flexible enough to keep operations running smoothly.
Step-by-Step Framework for Building a Smart Approval Process
Here’s the framework many high-performing procurement teams use (and continuously refine).
Step 1: Map Your Current Workflow
Grab a whiteboard or a Lucid chart and document how approvals actually happen, not how they’re supposed to.
Ask:
Who touches a purchase before it becomes a PO?
Where does it get delayed most often?
Which approvals add value vs. which just “rubber-stamp”?
This exercise alone reveals 80% of your inefficiencies.
Step 2: Define Clear Roles & Responsibilities
A good process makes accountability visible. Use this simple RACI model:
If multiple approvals are required, establish sequence rules - who approves first, and who can override or auto-approve based on value or category.
Step 3: Create an Approval Matrix (Template Below)
Here’s a simple matrix you can adapt for your organization:
🟢 Pro Tip: Limit top-level approvals (C-suite) to <20% of total requests. If your CEO is approving printer toner, your workflow is fundamentally broken. Limit top-level approvals to less than twenty percent of total requests, reserving executive attention for truly strategic decisions.
Step 4: Automate Intelligently (but Keep Human Oversight)
Automation reduces human error - but over-automation without context kills flexibility.
Look for tools (like Prokuria) that can:
Route approvals dynamically based on amount, category, or requester role.
Trigger alerts when bottlenecks occur.
Provide visibility dashboards for both requesters and approvers.
Allow emergency bypasses with justification (tracked for audit).
Smart setup tip: Set auto-approvals for low-risk categories or recurring expenses to save time, but require manual sign-off for high-risk or non-standard items.
What to Measure & Improve
You can’t improve what you can’t measure. Track at least these five metrics to monitor process health:
Use these KPIs as discussion starters, not punishments. The goal is to fix process design, not blame individuals.
The Human Side of Approval Workflows
Most approval problems aren't technical - they're behavioral. Approvers ignore notifications because they're overwhelmed or don't understand the urgency. Departments don't trust procurement because they've been burned by slow processes in the past. People bypass approvals because they genuinely feel the workflow slows them down without adding value.
To fix these human problems, focus on communication and buy-in. Involve users early by asking department heads to help design spending thresholds and categories. Explain the reasoning behind approvals, showing how they protect departmental budgets and organizational reputation. Train approvers thoroughly, because many delays happen simply because someone doesn't know where to click or what's expected of them.
Recognize and celebrate speed. When someone processes approvals quickly and correctly, acknowledge it publicly within your organization. Culture eats workflow for breakfast, especially in procurement where cross-functional trust determines success.
Common Mistakes & Root Causes
Too many approval layers usually stem from fear of losing control. The fix is to consolidate approvals and use risk-based thresholds instead of universal requirements. When you have no visibility into request status, it's almost always because you're tracking manually via email. Move to a digital dashboard or workflow tool that provides real-time status.
Delayed approvals happen when approvers are overloaded or disengaged. Implement auto-delegation during absences and send gentle reminders that escalate if ignored. Frequent exceptions to your approval process mean your policy doesn't reflect operational reality. Update categories or thresholds quarterly based on actual spending patterns.
Duplicate or rogue purchases indicate lack of enforcement. Integrate your PO approval system with spend analysis tools so violations become visible. When approvals happen after the fact, it's usually because of pressure to move fast. Build a streamlined pre-approval quick request form that gives people a legitimate fast path for urgent needs.
If more than two of these patterns sound familiar, it's time to redesign your process rather than just tweak it.
The table below provides a quick reference:
How to Continuously Improve
A great approval process isn’t static.
Every quarter, ask these five questions:
Are our thresholds still relevant to today’s spend?
Are cycle times improving or getting worse?
Which approvers consistently create bottlenecks?
Have we added new spend categories without new rules?
Are employees clear on what needs approval (and when)?
Use both quantitative data and qualitative feedback to fine-tune your workflow. Over time, your approval process becomes not just faster but genuinely smarter.
Template: Purchase Order Approval Checklist
Before going live, run through this quick checklist:
☐ Approval roles and limits defined
☐ Approval matrix documented and accessible
☐ Exceptions and escalation paths clear
☐ Approval flow integrated with PO system
☐ Email + system notifications configured
☐ Metrics dashboard tracking cycle time & spend control
☐ Quarterly review schedule established
Bringing It All Together
A purchase order approval process isn’t about adding red tape, it’s about giving your team structure that enables speed and accountability.
When done right, it builds trust between finance and operations, reduces waste, and gives leaders real visibility into where money goes.
And when supported by a flexible tool like Prokuria, approvals don’t just flow they evolve.
You can automate routing, track bottlenecks, and generate instant reports that show exactly how your purchasing process performs
.
Ready to simplify your approvals and regain control?
Book a free demo with Prokuria and see how leading procurement teams are turning complex approval chains into efficient, transparent workflows.
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