Approval Workflows

What are approval workflows?

Approval workflows are the cornerstone of any company’s purchasing process. They ensure that employee spending is within policy and budget. Employee purchases are a significant expense for many businesses. In fact, employee purchases can account for up to 20% of a company’s total operating costs. As a result, it is important for businesses to have approval workflows in place for employee purchases.

Approval workflows are a set of procedures that are used to review and approve employee purchases. These workflows typically involve multiple steps, each of which is performed by a different person or department. Approval workflows can help businesses to:

• Reduce fraud and waste: By requiring approval for all employee purchases, businesses can help reduce the risk of fraud and waste. For example, approval workflows can help prevent employees from making unauthorized purchases or from purchasing items at inflated prices.
• Improve compliance: Many businesses are subject to industry-specific regulations that govern employee purchases. Approval workflows can help businesses comply with these regulations by ensuring that all employee purchases are reviewed and approved by the appropriate individuals.
• Increase transparency: Approval workflows can help increase transparency into employee spending. This transparency can help businesses identify areas where costs can be reduced and make better purchasing decisions.
• Improve efficiency: Approval workflows can help improve the efficiency of the purchase process. By automating the approval process, businesses can reduce the amount of time and paperwork involved in purchasing goods and services.

Types of approval workflows.

There are two main types of approval workflows for employee purchases:

• Sequential approval workflows: Sequential approval workflows require employees to submit their purchase requests to a series of approvers in a specific order. For example, an employee might need to submit their purchase request to their manager, department director, and then the CFO for approval.
• Parallel approval workflows: Parallel approval workflows allow employees to submit their purchase requests to multiple approvers at the same time. This type of workflow is often used for purchases that are urgent or that involve a large amount of money.

How to implement approval workflows for employee purchases.

Approval workflows for employee purchases are an important tool for businesses to reduce fraud and waste, improve compliance, increase transparency, and improve efficiency. By following the best practices outlined below, businesses can successfully implement approval workflows for employee purchases and reap the many benefits that they offer.

• Identify the types of purchases that require approval: Not all employee purchases need to be approved. Businesses should identify the types of purchases that require approval based on the risk of fraud, waste, and compliance issues.
• Define the approval process: Once the types of purchases that require approval have been identified, businesses need to define the approval process. This includes identifying the approvers for each type of purchase and the order in which they will review and approve purchase requests.
• Communicate the approval process to employees: Employees need to be aware of the approval process for employee purchases. This information can be communicated to employees through training sessions, company policies, and employee intranet sites.
• Automate the approval process: There are a number of software solutions available that can help businesses automate the approval process for employee purchases. Automating the approval process can help businesses improve efficiency and reduce the risk of human error.
• Monitor the approval process: Businesses should regularly monitor the approval process to ensure that it is working effectively. This includes tracking the number of purchase requests that are approved and denied, as well as the average time it takes to approve purchase requests.
• Use data to identify areas where the approval process can be improved: For example, businesses can track the average time it takes to approve purchase requests and identify areas where the process can be streamlined.
• Get feedback from employees on the approval process: Employees can provide valuable insights into how the approval process can be improved.
• Make sure that the approval process is flexible enough to accommodate changes in business needs: For example, businesses may need to adjust the approval process during periods of rapid growth or when new products or services are launched.

How Airbase can help with approval workflows.

Airbase has revolutionized approval workflows for company spending with automation that can address the most complex and nuanced requirements. There are two important aspects of this automation: first, to offer an easy way to configure the workflows, and second, as an intuitive, easy-to-use way to secure all approvals.

Standard approvals.

A basic workflow can be used to get sign-off for all spend from budget owners before a purchase is made. Standard Approval Policies give the finance team visibility into an expense before it is made. They make the pre-approval process simpler and more transparent.

With the Standard Approval Policy in place, every Virtual Card, Purchase Order, and Reimbursement request will be screened based on their Spend Limit. This avoids overspending on a tool or service. Additionally, you can create a Standard Approval Policy for Airbase Physical Card transactions for an added layer of verification over an employee’s Physical Card spends.

Advanced approvals.

Airbase Advanced Approval Policy is a set of rules that define who approves an Airbase User’s Virtual Card, Bill Payments, Reimbursements, and Purchase Order requests. It makes the pre-approval process simple and transparent. You can define the Approval Policy for Physical Card transactions as well.

Advanced Approval Policies are highly flexible. It can mirror the complex and specialized approval workflows set up in your organization.

An advanced approval policy is comprised of Rules. Each Rule can be designed as one or more “When… then…” statements called Conditions.

Multi-stakeholder approvals.

Multi-stakeholder review can be achieved with Airbase’s Guided Procurement module, that networks all stakeholders into Airbase for their review and sign-off via integrations with their business systems. These stakeholders may include Legal, IT, InfoSec, FP&A, and others. Airbase integrates with the business systems that these stakeholders use so that they can conduct their review in their own system. The routing for stakeholder review reflects a company’s policy. This type of approval process ensures total compliance for all spend.