Most companies have approval rules. Fewer have approval rules that are actually followed.
The usual pattern: a director sets limits — site managers up to a certain amount, project managers above that, directors for anything larger. Everyone agrees. Then a site needs something urgently, the PM is on another site, and the purchase goes ahead on a phone call. After a few months, the rules exist mainly on paper.
A PO approval workflow is how you turn those rules into something that holds.
What a PO Approval Workflow Is
A PO approval workflow defines three things:
- Who approves — which roles can approve which purchases.
- In what order — whether approvals happen one after another (site manager, then PM, then director) or at a single level based on value.
- What gets recorded — who approved, when, at what value, and against which request.
The rules themselves are usually written as an approval matrix: a table of roles against value bands and purchase categories.
Step 1: Set Value Tiers
Start simple. Three or four tiers cover most SMEs. For example:
| Tier | Example value band | Example approver |
|---|---|---|
| 1 | Small consumables | Site supervisor or site manager |
| 2 | Mid-value materials and hire | Project manager |
| 3 | Large purchases | Director |
| 4 | Very large or unbudgeted | Director plus finance |
The actual amounts depend on your company's size, margins and typical purchases — there's no standard figure. A useful test: most day-to-day site purchases should fall into the first tier, and the top tiers should be rare enough that the approver actually reads each request.
Step 2: Add Category and Project Rules (Only Where Needed)
Value alone doesn't cover everything. Common additions:
- Category rules — for example, equipment hire or subcontract work always goes to the PM regardless of value, because it affects the programme.
- Project rules — purchases on a specific project go to that project's PM, not whoever is available.
- Budget rules — anything over the remaining budget line needs a higher approver.
Add these carefully. Every extra rule is another place where a request can get stuck. If a rule doesn't catch a real problem, leave it out.
Step 3: Decide What the Approver Checks
An approval is only useful if the approver checks something. Four questions cover most purchases:
- Budget — is there budget left on this line?
- Vendor — is this a known, approved vendor from the vendor register?
- Quantity — does the quantity match the scope of work?
- Price — is the price in line with the last comparable purchase?
(Our PO approval basics primer covers these in more detail.)
Step 4: Plan for Urgent Purchases
Urgent purchases are where most approval workflows break. If the official process is too slow for a breakdown on site, people will bypass it — and the bypass won't be recorded.
Better to design a fast path on purpose:
- A named person who can approve urgent requests quickly, from their phone.
- The request is still raised and recorded, even if the approval comes minutes later.
- Urgent purchases are reviewed afterwards, so the fast path doesn't become the normal path.
The goal isn't to slow urgent work down. It's to make sure the record exists even when the purchase happens fast.
Step 5: Make the System Enforce It
The most important step. If the workflow depends on people remembering the rules, it will be skipped under pressure. Routing should happen automatically: the request is raised, the system checks the value and category, and it goes to the right approver — with a timestamped record of the decision.
That's the difference between an approval policy and an approval workflow.
How Bilaro Fits
Bilaro routes requisitions to the right approver automatically, by value and role, with a timestamped digital sign-off at every tier. Approved requests become purchase orders, and every step stays linked on one unbroken audit trail. If you run more than one company, each can have its own approval hierarchy under one login with multi-company routing. See the pricing page for plans in MYR.
What is a PO approval workflow?
A PO approval workflow is the set of rules that decides who approves each purchase order, in what order, and what is recorded. It usually combines value tiers with category or project rules, and is ideally enforced automatically by software rather than by memory.
How many approval levels should an SME have?
Most SMEs manage well with three or four value tiers. More levels slow purchasing down without adding much control. Start simple, and add a tier or rule only when it catches a real problem.
What is the difference between an approval workflow and an approval matrix?
An approval matrix is the table of rules — which roles can approve which values and categories. The approval workflow is how those rules are applied to each purchase: how requests are routed, in what order, and how decisions are recorded.
How should urgent purchases be approved?
Give urgent purchases a defined fast path: a named approver who can respond quickly, with the request still recorded before or at the time of purchase. Review urgent purchases afterwards so the fast path doesn't replace the normal process.