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Andyjmartin16 10-14-2013 04:32 PM

Purchase order approvals
 
We are installing a new purchase order creation and management software which is leading to streamlining our approval process. I would be interested in learning what other companies require for PO approval. How many approvals are required, by what level of employee, and are approvals based on item purchased, dollar amount, or all purchases follow the same approval rules and path?

joannmu 11-06-2013 07:21 PM

Our PO requests have signature authority levels (approval levels) based on the total dollar amount and must be approved by someone in the direct chain of command. Once the PO is created in our system (based on the PO request form) the PO then goes through another set of approvals in our Finance chain of command based on total dollar amount of the PO. We actually have two layers of approvals in place for all purchases over $100.00.

TheMicah 11-12-2013 11:14 PM

Without getting into too much detail about what I purchase for my company, I would say approvals usually depend on what's being ordered rather than dollar amount. There are some items that are a huge expense, but because they are regularly used equipment and supplies that the company depends on, I order them without additional approval. The company basically expects those charges to come through.

The things that I do get approval for are unusual items, annual maintenance & support renewals (Do we need them again? Do we need to make adjustments this time?), and items that involve a technical or process change from what we typically get or use.

ahrani82 12-11-2013 07:49 PM

Our company practices segregation of duties - three signatures are required for every payment of contract. One to approve the spending (budget), one to approve the contract, and one to approve payment. So to contract signing, minimum of two is required. For payment, three.

These are minimum number of signatures, and our company requires anyone between the purchasing/contracting officer and the signatory signs for recommendation.

I would like to add another point - less authority amount shall be given for change order amount. Our company has a separate authority for signing change orders which is approximately 10%. Mind you, this is an aggregate change order amount so it is likely that the highest level sees and approves change orders.


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