How to Streamline Approvals in Procurement

Inefficient approval processes can slow down procurement cycles, leading to missed opportunities and unnecessary costs. That is why approvals are essential in procurement to ensure that purchases align with the budgets and compliance standards. 

Streamlining approvals not only helps you speed up procurement but also boosts operational efficiency, helping to reduce manual effort and improve transparency. Throughout this article, we’ll explore everything about streamlining approvals, from the main elements of approval workflow to actionable strategies for simplifying these workflows. 

So, let’s dive into it. 

What is a Purchase Approval Workflow? 

First, we must clarify the definitions. 

Purchase approval workflow refers to a structured process designed to ensure that procurement requests meet company standards and are approved before execution. It involves routing purchase requests through specific approvers like department heads, financial officers, or procurement managers who review and either approve or reject the requests. The approval or rejection depends on predefined criteria such as budget limits, vendor compliance, and necessity. 

Primary Elements of the Approval Process

To understand purchase approval workflows better, let’s also overview the primary elements of the process, which are: 

• Documentation 
• Approvers
• Permission policy
• Performance dates. 

Documentation 

Documentation is an element that includes request forms, supporting documents, and audit trails. 

Approvers

Approvers are key stakeholders responsible for the approval or rejection of the request. Often, approval roles are assigned based on job functions, such as finance or department managers, with some workflows structured hierarchically. For instance, higher-value requests might require multiple or higher-level approvals. 

Permissions Policy 

The permission policy defines who has the authority to view, submit, or approve various types of requests. Access controls are critical to maintain confidentiality and ensure that only authorized personnel can interact with specific aspects of the workflow. 

Performance Dates 

This element refers to the process being efficient and fast. Key dates include the submission date and the deadlines for each of the approval stages. 

Approval Workflow Process Steps 

Before moving on further, let’s first overview the main steps of a typical approval workflow. 

• Step 1: Request Submission 

The workflow process starts with an employee or a team member submitting a purchase request for approval. 

• Step 2: Automatic Routing 

After the request submission, it is automatically routed to the relevant approver or approvers based on the predefined rules. These rules can be based on roles, departments, or other customer parameters set by your organization. 

• Step 3: Initial Review Stage 

The assigned approvers review the request details, check them for accuracy, and make sure that they align with the procurement policies and budgets. They may or may not request additional information. 

• Step 4: Approval Decision 

The approver either approves or rejects the request. In some organizations with more complex processes, the approver may forward the request to higher-level approvers if it exceeds certain budget thresholds. 

• Step 5: Final Approval 

Once approved by all the required personnel, the system will notify all relevant stakeholders. If the request is rejected, then the requester will be provided with feedback on modifications. 

After completion of all the stages mentioned above, the approved request is typically stored in the system for future reference, which helps maintain a clear audit trail and supports compliance requirements.

Benefits of Streamlining Approval Workflows 

By streamlining approval workflows, your organization will gain immense benefits from increased efficiency and cost savings. The primary benefits are the following: 

• Improved accuracy. Automated workflows allow you to automate data entry and check for policy compliance, minimizing errors. 
• Increased efficiency. Reduces manual tasks and accelerates decision-making, resulting in faster approvals.
• Enhanced transparency. With a good approval process and approval system, you will gain access to a clear audit trail and more visibility into the status of each request. 
• Cost savings. Well-optimized approval workflows will help to reduce bottlenecks and improve cycle times, leading to lower operational costs. 
• Better compliance. Streamlined approval workflows help to ensure adherence to organizational policies and regulatory standards. 

How to Create an Automated Approval Workflow?

Finally, it is time to dive into the practical section of today’s guide. There are certain steps you must take to create efficient approval workflows, and these include the following: 

Identify the Process

Define the approval process you want to automate, such as purchase requests, leave approvals or budget authorizations. Identify who needs to be involved and establish criteria that determine approval thresholds. 

To simplify all of this, here are the main steps you need to complete: 

• Define the approval type. 
• List required participants and their roles in the process.
• Set approval rules, like escalation triggers and thresholds.

Choose a Workflow Management Tool

The next step is to choose the right software solution for efficient workflow management. Make sure to choose a tool that suits your organization’s needs. 

In order to choose the right software solution, you need to do the following: 

• Research available workflow tools that meet your needs.
• Check for key features like automation, notifications, and custom fields.
• Ensure the tool integrates well with your existing systems.

For instance, you can navigate toward all-in-one procurement software solutions such as Tradogram. Tradogram offers all the necessary features for approval workflow automation and various other tools to maximize procurement efficiency. 

Define User Roles & Permissions 

To ensure the efficiency of the approval workflows, make sure to clearly define user roles and permissions beforehand. 

• Assign specific approval and escalation roles to relevant staff.
• Set up permissions for view, edit, and approve functions.
• Determine access levels based on department or hierarchy.

Configure Automation Rules

Make sure to leverage the power of automation for assigning tasks, sending notifications, and setting approval thresholds. 

You can use automation in several ways to streamline the approval workflow, including: 

• Set task assignments for automatic routing based on the request type.
• Create notifications for each workflow stage completion or delay.
• Establish escalation criteria if approvals aren’t completed on time.

Launch the Workflow 

Finally, once everything is set, you can launch the approval workflow. 

• Deploy the workflow organization-wide after testing.
• Track metrics like approval times and completion rates.
• Regularly review and adjust for bottlenecks or inefficiencies.

After you launch the workflow, simply keep an eye on it and monitor its performance for improvements. Also, to ensure a smooth process, good training must be provided to all the employees involved in the approval process. Ensure that they understand how to submit, review, and track approvals by the system. 

Streamline Approval Workflows with Tradogram

If you are looking for the perfect software solution to streamline approval workflows, then you are in the right place. Tradogram is robust Approval Workflow Software that comes in handy with all the necessary features to streamline approvals and improve procurement efficiency. 

With this platform, you can say goodbye to manual tasks and welcome automation that will save time and increase ROI. The features of the software range from customizable approvals and hierarchies to instant notifications and multi-level management. 

To learn more about how Tradogram can help you streamline approval workflows and overall procurement, contact us, and our team will be more than happy to assist you.