An approval only means something if the right person gave it, for the right amount, before the money left.
A sound invoice approval workflow routes every invoice to a budget holder with authority for that amount, never lets anyone approve their own spend, treats purchase-order invoices and non-PO invoices differently, and keeps evidence of who approved what and when. Test regularly for invoices split to stay under approval limits.
An approval matrix, sometimes called a delegation of authority, sets who can approve what. Keep it to one page.
| Invoice value | Approver | Second approval |
|---|---|---|
| Up to 1,000 | Budget holder | Not required |
| 1,000 to 10,000 | Department head | Not required if matched to an approved PO |
| 10,000 to 50,000 | Department head | Finance manager |
| Over 50,000 | Finance director | Chief executive or second director |
The amounts are an example. Set yours from your size and risk, write them down, and review them once a year.
An invoice matched to an approved purchase order and a goods receipt has already been approved once, at the order stage, so it can follow a lighter route if the match is within tolerance. A non-PO invoice has had no approval at all, so it needs the full matrix every time. If non-PO invoices are a large share of your volume, that is a control gap worth fixing at the ordering stage. See three-way match.
A common way round approval limits is to split one purchase into several invoices just under the threshold. Test monthly: list invoices from the same supplier within a few days of each other whose total exceeds an approval limit. In Excel, with supplier in column A, date in B and amount in C, this flags any supplier with another invoice within seven days:
=COUNTIFS($A:$A,A2,$B:$B,">="&B2-7,$B:$B,"<="&B2+7)>1Review the flagged groups and ask whether they were one purchase.
The workflow is the same in the UK and the US. Public companies in the US also need evidence that approval controls operated throughout the year for Sarbanes-Oxley testing, so approval dates and approver names must be retained, not overwritten.
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The Accounts Payable Control System runs four duplicate-invoice tests, supplier master fraud checks and a three-way match on every invoice, with a payment run release gate that blocks release while exceptions are open. Excel, no macros, one-time price.
Most companies use the net amount because that is the cost to the budget, but either works if the policy says which and everyone applies it the same way.
Someone outside the person's reporting line within finance, usually the finance director, with the finance director's own expenses approved by the chief executive or another director.
Yes, if the email clearly identifies the invoice and amount, comes from the approver's own account, and is saved with the invoice so it can be produced later.
Do not pay it and do not leave it in a drawer. Send it back to the person who placed the order with a deadline, escalate to their manager if it passes, and record the outcome. Unowned invoices are often duplicates, disputed work or invoices that were never valid.
Each quarter, take a sample of paid invoices from each value band and compare the recorded approver and date with the matrix. Any invoice approved by the wrong person, or after payment, is an exception to fix at its source.
Last updated 18 October 2026. General guidance for finance teams; check it against your own policies, systems and local rules.