Purchase Order Approval Workflows: Who Signs Off on What

Approval is a delegation problem before it is a software problem. Set 1 threshold a technician can spend under without asking, and everything above it routes to a named person. Most service companies set that number too low, which turns the owner into a bottleneck on a Friday afternoon.

The short version

At two technicians the owner approves everything and that is fine. At eight, an owner approving every part order is either slowing the work down or approving without looking, and the second one is worse because it looks like a control.

What a working arrangement needs is smaller than most service companies expect:

• One spending threshold, set high enough that most orders pass under it
• A named approver above it, and a named substitute
• A route that reaches the approver where they already are
• A record of who approved what, which is the part people skip

The rest is enforcement, and enforcement only matters once the policy is right.

Set the threshold from your parts data, not from instinct

The number most service companies pick is the one that feels responsible, and it is usually far too low.

A threshold that catches most of your orders is not a control. It is a queue. Every order stops, the approver becomes the constraint, and within a month approvals happen in batches without anybody reading them.

The way to set it is with your own history. Pull twelve months of parts purchases and sort by value. Find the point where roughly the top fifth of orders sits above and four fifths below. That is a defensible starting threshold, because the approvals you are creating are the ones that carry most of the money.

Two adjustments after that. Create it if the approver is still handling more than a few a week. And set a separate, lower threshold for anything ordered outside your normal supplier list, since new vendors are where the real risk sits rather than in familiar parts at familiar prices.

Commercial kitchen work needs 2 approvals, not 1

This is the part that catches service companies moving up from residential work.

Internal approval is you agreeing to spend your money. Customer authorization is them agreeing to pay for it. They are different decisions, they come from different people, and a technician on site needs both before fitting an expensive part.

	Internal approval	Customer authorization
Who gives it	Your owner, office or service manager	The customer's facilities manager, or a portal
What it means	We are committing this money to a supplier	They will pay for this repair, up to a limit
What it looks like	An approved purchase order	A not-to-exceed number, or a purchase order from them
What goes wrong	Nobody available, so the part is ordered anyway	The cap is exceeded and the invoice is disputed months later

Both have to be visible to the technician doing the work, not only to the person who obtained them. An authorization that lives in an email in the office is an authorization the person on site does not have.

Who signs off on what

Three roles cover most service companies, and naming them removes more friction than any tool.

1. The technician. Anything under the threshold, from an approved supplier, for a job already on the board. No asking.
2. The office or service manager. Everything above the threshold during working hours, plus anything from a new supplier at any value.
3. The owner. A second, much higher threshold, plus anything unusual: a large special order, a supplier requiring payment up front, or a part for a job that is not yet authorized by the customer.

What matters more than the tiers is the substitute. Every level needs a named alternate, because the failure mode is not a wrong approval. It is a Friday afternoon where the approver is unavailable and the part is ordered anyway, outside the process, which teaches everyone the process is optional.

Where approval workflows actually break

Not at the policy. At the moment the process meets an urgent job.

A fryer is down at a franchise location during lunch. The part is available if ordered in the next twenty minutes. The approver is in a meeting. What happens next decides whether you have a process or a document.

Service companies that handle this well build the exception in rather than pretending it will not happen:

• An emergency route. A named person reachable by phone with authority to approve verbally, recorded on the purchase order afterwards.
• A standing exception for equipment down. A higher threshold when a customer is not trading, agreed in advance rather than negotiated in the moment.
• Retrospective approval that is real. If it happens, it gets recorded and reviewed, not quietly forgotten.

The third one is what keeps the process honest. A service company that never records an exception is not a service company without exceptions.

The record is the point, not the permission

Approval workflows are usually sold as control and their real value is the audit trail.

Six months later the questions are specific. Who approved this. Was the customer's authorization obtained before or after the part was ordered, and why did we buy from this supplier at this price when the usual one was cheaper.

Those questions are answerable if the approval is attached to the purchase order and the purchase order is attached to the job. They are not answerable from a mailbox, which is where most approvals live.

This is also what makes a disputed invoice survivable. A customer querying a parts charge is a short conversation when the authorization, the purchase order and the job are one chain, and a long one when the pieces have to be assembled.

Roopairs keeps purchase orders attached to work orders with vendor and purchase history against the supplier, which is the structure that makes those questions answerable rather than a research task. Ray has written about how purchase orders and inventory sit with the work order.

Writing the policy in one page

You do not need software to start, and starting without it tells you what the software has to do.

Write down the threshold and how you arrived at it. Name the approver and the substitute at each level. Write the emergency route, including who can be called and what gets recorded afterwards. Name the suppliers that count as approved, so anything outside that list is an exception by definition.

Then run it for a month and count the exceptions. If there are many, the threshold is wrong rather than the team. Adjust the number before adding enforcement, because enforcing a bad threshold is how a process gets worked around permanently.

Roopairs runs a product tour where you can see approvals, purchase orders and the job in one chain.

What service companies in the trade say

“It tracks technicians in the field, cust information, job locations, parts & pricing, vendor information and job scheduling.” — D. Williams

Also worth reading

• Purchase Orders in Field Service Software
• Purchase Orders and Job Costing Are One Number
• The achilles heel of warranty service

Frequently asked questions

What is a purchase order approval workflow?

The rule that decides which parts orders can go straight to a supplier and which need somebody to agree first, plus the route that gets them agreed. In a service business it usually means a spending threshold, a named approver above it, and a record of who approved what.

What threshold should we set?

One derived from your own purchase history rather than a round number. Sort twelve months of parts orders by value and set it so roughly the top fifth needs approval. If your approver is handling more than a few a week after that, the number is still too low.

Should technicians be able to order parts?

Under the threshold, from approved suppliers, for jobs already on the board, yes. That is most orders and stopping them costs more in delay than it saves in control. Where technicians should not have authority is new suppliers and anything a customer has not authorized yet.

What is the difference between internal approval and customer authorization?

Internal approval is your business agreeing to spend money with a supplier. Customer authorization is the customer agreeing to pay for the repair, often as a not-to-exceed cap or their own purchase order. Commercial work needs both, and having one is regularly mistaken for having the other.

How do you handle an urgent job when nobody can approve?

Build the exception in before it happens. Name somebody reachable with verbal authority, agree a higher threshold for equipment that is down, and record the retrospective approval on the purchase order afterwards. A process with no emergency route gets bypassed once and then permanently.

Do we need software for this, or will a policy do?

A policy is where to start and it is what most service companies are missing rather than a tool. Software matters at the point where the approval has to be visible to a technician on site and attached to the purchase order afterwards, because those two are what a spreadsheet or a mailbox cannot do.