Route purchases through the right approvers automatically

This is the first stop for routine purchases that fall under the Manager threshold (typically up to $1,000). The department manager checks that there's budget available, confirms the business need is genuine, and signs off. It's a quick gate - most requests at this level should clear without much back-and-forth.

Purchases that go over the Manager's limit (typically $1,000-$10,000) move up to the Director. At this level, you're checking for strategic alignment, making sure the vendor choice makes sense, and confirming the spend fits within the department's budget. It's a more thorough review than Tier 1, but it shouldn't take long if the request was prepared well.

Once you've got all approvals, it's time to send the formal purchase order to the vendor. Make sure they've acknowledged receipt, confirmed the delivery timeline, and agreed to your payment terms. Log their acceptance right here in this step - you'll thank yourself later when you need the audit trail.

Decide on the dollar limits for each approval level based on your organization's size and how much financial risk you're comfortable with. A common starting point: Manager up to $1,000, Director $1,000-$10,000, VP $10,000-$50,000, CFO above $50,000. Write these into your finance policy so they're official.

Map each job title to its approval authority and write it down. You'll also want to name at least one backup approver for every tier - if someone's on vacation or out sick and they're the only one who can approve a purchase, you've got a bottleneck. Having two approvers per tier keeps things moving no matter who's unavailable.

Configure your purchasing system to route requests automatically based on dollar amount. You'll want to make sure it escalates correctly when a request hits a threshold. Before you go live, run a few test purchases through each tier to confirm the routing is working as expected.

Everyone who submits or approves purchases needs to know the rules. Share the approval limits clearly and publish a simple reference guide they can bookmark. People shouldn't have to guess what tier applies to their request - the more visible you make this, the fewer surprises you'll deal with.

Don't set it and forget it - you'll want to revisit your approval levels at least once a year, or whenever your business goes through a significant change. Ask yourself: are the dollar limits still right? Are purchases moving through fast enough? Use real audit feedback and approval data to guide your adjustments.