Approval Chain
A predefined sequence of reviewers who must sign off on a request, document, or transaction—ensuring that the right eyes see it, policy checks are applied, and accountability is captured before the request is finalised.
Key Facts
Alternate names: sign-off chain, routing path, approval workflow, authorisation chain
Typical objects routed: purchase requisitions, expense reports, invoices, contracts, change orders, HR forms
Common stakeholders: requester → direct manager → department or budget owner → finance / compliance → executive (for high-value or sensitive items)
Routing logic: amount thresholds, cost centre, project code, risk flags, commodity category, supplier rating, geography
Tooling: procure-to-pay suites, BPM / workflow engines, low-code platforms (Power Automate, Zapier), Slack/Teams bots, email rules
Why It Matters
Strengthens internal controls – Multiple eyes reduce fraud and catch policy breaches before money or data leaves the organisation.
Boosts accountability – Each approver’s digital signature ties decisions to individuals, creating a defensible audit trail.
Speeds cycle-times (when optimised) – Automated, rules-based routing can cut approval delays from days to minutes.
Aligns spend with budget & strategy – Budget owners see requests before funds are committed, preventing surprise overruns.
Real-World Examples
High-Growth SaaS Company
Uses dynamic routing: expenses ≤ €100 auto-approve; €101–1 000 go to the manager; > €1 000 also hit Finance. Slack approvals and 24-hour escalation cut reimbursement cycle from 8 to 2 days.
Global Manufacturer
Purchase requests over US $50 000 trigger a compliance review plus VP approval. Embedded SoD checks prevent the requester from approving their own PO or invoice, satisfying SOX auditors and reducing exception findings by 60 %.
Diagram / Visual (optional)
A swim-lane diagram showing: Requester → Manager → Finance → Compliance (conditional) → CFO, with automated policy checks at each hop.
Related Terms
Expense Approval
Intake-to-Procure
Procure-to-Pay (P2P)
Segregation of Duties (SoD)
Workflow Automation
Frequently Asked Questions
Q: What’s the difference between a static and dynamic approval chain?
A: Static chains always follow the same path; dynamic chains adjust automatically based on amount, risk, or commodity—speeding low-risk approvals while adding oversight for high-risk ones.
Q: How many approval levels are ideal?
A: Enough to ensure control without causing bottlenecks; best-practice target is no more than three levels for typical transactions, with automatic escalation if an approver waits > 48 hours.
Q: How does an approval chain enforce segregation of duties?
A: Workflow rules prevent the same user from holding conflicting roles (e.g., requester and approver), and systems log every action for audit review.
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