Approval policy

Approval policy is an internal set of rules that says who must review and approve invoices, expenses or purchase orders before they are posted to the accounts or paid. It helps control spending, prevents mistakes and fraud, and creates a clear audit trail.

Policies can be simple (one manager approves) or layered (several approvers in a set order). They often use thresholds, project or department routes, and require different checks for invoices, staff expenses and supplier onboarding.

What a practical approval policy usually covers:

• Roles and limits: who may approve and in which situations.
• Document types: invoices, expenses, purchase orders and credit notes.
• Routing rules: single-step or multi-step approval, by department or project.
• Segregation of duties: the person who creates or books a bill does not also approve or release payment.
• Evidence: required attachments such as receipts, contracts or delivery notes.
• Timeframes: how quickly approvals should be completed.
• Exceptions and delegation: recurring costs, urgent spends, cover during absence.
• Record-keeping: audit trail in your accounting system and locking after approval.