Approval processes are available for both outgoing orders placed through Procurement Partners and invoices that flow into Procurement Partners. This guide will cover what types of approval standards can be implemented and outline some helpful examples.

What Are Approvals?

Order approvals give one or more users the opportunity to approve an order before said order is released and sent to the vendor. During this approval process, the approver(s) can verify the GL codes that have been assigned by the orderer (the person who submitted the order) as well as the budgetary impact of the order. If necessary, they can also adjust the quantity of items within the order, or deny the order.

Invoice approvals give one or more users the opportunity to approve an invoice before the invoice is transferred from Procurement Partners to your accounting platform. During this approval process, the approver(s) can verify the GL codes of each item on the invoice.

Many organizations have one or more order approval rules in place, but it is not required; just note that orders that do not have any approval process will be submitted directly to the vendor upon the orderer’s submission of their shopping cart. If you wish to have some amount of double checking or “signing off” of orders before they are sent to the vendor, you’ll need to use order approvals.

Nearly all organizations have at least one person involved in the invoice approval process. While not required, it is highly recommended that at least one person reviews invoices before they are moved from Procurement Partners to your accounting platform to ensure their accuracy and GL code integrity.

How Are Approvals Set Up?

All rules in Procurement Partners are established with a combination of three key elements: the location to which the rule will apply, the vendor to which the rule will apply, and the job profile of the orderer or the person to whom you wish an invoice to be assigned. These are highly customizable and shareable: you can have a single rule for each location, or unique rules for certain locations. You can have rules that apply to only one vendor or rules that apply to all but one vendor, and everything in between. You can also have rules that apply only for specific job roles; perhaps if the executive director is the one submitting an order, it doesn’t need quite as much approval as when the housekeeping staff places a similar order.

You can create and set as many or as few rules as you like; many customers have 2-3 different approval rules, split up by vendor or by other metrics. Be careful to not go too overboard with rules and approvals, however; if an order needs to be approved by twelve different people, it will be a significant amount of time between when the user submits their order and when the order is received by the vendor!

Rule Steps

Rules are constructed from one or more steps. Steps can be used to define a single rule that would call for approval from more than one person, or to define parameters to only have the rule trigger in specific scenarios. The criteria that can cause a step to trigger includes:

• Order or invoice total exceeds a specified dollar amount

  • Ex. “Orders over $1000 require Facility Administrator approval.”

• Individual item on an order or invoice exceeds a specified dollar amount

  • Ex. “Orders containing an item over $500 require Controller approval.”

• Extended line item on an order or invoice exceeds a specified dollar amount

  • Ex. “Orders containing an extended line item exceeding $2000 require COO approval.”

  • The extended line item amount is determined by the cost of the item times the quantity; using the above example, a user purchasing a $700 printer would not trigger this rule, but if they purchased three of those $700 printers it would trigger (3 x $700 = $2100; $2100 > $2000).

• An item on the order or invoice is marked as capital, non-formulary or non-preferred

  • Ex. “Orders containing a capital item require Executive Director approval.”

  • These are custom tags that can be defined on a catalog or item level for your vendor catalogs.

• The order or invoice exceeds a specified percentage of your budget

  • Ex. “Orders that exceed 100% of budget require Facility Administrator approval.”

  • You need to have a budget set up for this rule step to apply.

• Specified GL codes are utilized on the order or invoice

  • Ex. “Orders containing the GL code 10-200-3000 require CEO approval.”

  • For orders, this rule will trigger if the GL code in question is assigned to one or more items contained within the order. For invoices, this rule will trigger if the GL code is assigned to one or more of the items as the invoice enters Procurement Partners, or if an item is switched to the specified GL code during the approval process (in the case of a multi-step approval process where GL code approvals are used on a later step).

  • More than one GL code can be established to trigger this step if desired.

  • You can have multiple steps that each trigger based on a separate GL code. However, order rules cannot move backwards. For example, if an approver on a later approval step changes an item’s GL code to one that would trigger an earlier approval step, the order or invoice will not go back to the previous step.

• The invoice is considered “invoice only”

  • Ex. “All invoices require Facility Administrator approval (Invoice Only).”

  • An “invoice only” transaction is an invoice that is not attached to an order that was submitted through Procurement Partners. This can be because a user submitted an order outside of our system, or an invoice that was generated by the vendor (such as a credit invoice). This would also apply to invoices that contain items added by the vendor that were not on the original order.

Multiple criteria can be combined within a single step, and you can define how you wish the step to trigger using AND/OR logic:

• AND – This rule will be triggered if all of the specified criteria are met

  • Ex. “Orders over $1000 and exceeding 100% of budget require COO approval.”

  • The above rule will trigger only if both parameters are fulfilled.

• OR – This rule will be triggered if any of the specified criteria is met

  • Ex. “Orders over $1000 or exceeding 100% of budget require COO approval.”

  • The above rule will trigger if either parameter is fulfilled. It will also trigger if both parameters are fulfilled.

Each step will require at least one job to be assigned as an approver, but secondary and back-up approvers can also be assigned.

Examples

Example 1 (Order Approvals): Pine Lodge Health and Rehab is getting started with Procurement Partners. They’re being set up with several vendors, including a food vendor. They trust that ordering is done properly for the most part, but would like to have orders approved if they go over budget. The CEO is also interested to review and approve orders that exceed $10,000. However, they do not want the budget approval to apply to their food vendor; they certainly don’t want to encourage going over budget, but they also don’t want an order to risk missing a cut-off due to awaiting approval.

Below is an example of order approval structure to suit Pioneer Health and Rehab:

1. All nonfood orders exceeding 100% of budget require Facility Administrator approval

2. All orders over $10,000 require CEO approval

Example 2 (Order Approvals): Meredith Senior Living has established a budget within Procurement Partners and wish to have it tied to their order approval process. However, they want to know a little before going over budget, and also wish to have further approval if exceeding budget by a wide margin.

Below is an example of incremental budget approvals being used which would suit Meredith Senior Living:

1. Orders exceeding 90% of budget require Facility Administrator approval

2. Orders exceeding 125% of budget require Director of Ops approval

Example 3 (Order Approvals): GoodLife currently has a complex order approval structure and wants to be sure Procurement Partners can manage it. They have a formulary for their medical supplies and want to be sure any items purchased from their medical supply vendors that are not on the established formulary will be approved by the Medical Director. They want their Executive Director to approve any orders that either go over budget or exceed $1,000, except for their food vendors – they only want to approve those orders if they go over budget. Additionally, any orders placed with an office supply vendor catalog by someone from their medical team should be approved by the Receptionist.

Below is an example of how GoodLife could set up these order rules:

1. All medical supply orders containing a non-formulary item require Medical Director approval

2. All nonfood orders over $1,000 or exceeding budget require Facility Administrator approval

3. All food orders exceeding budget require Facility Administrator approval

4. All office supply orders placed by a user assigned to the Medical job require Receptionist approval

Example 4 (Invoice Approvals): Ocean City Wellness Center is looking to establish their invoice approval rules. As recommended, they wish to have the orderer approve invoices first so that they can verify whether the items arrived and give the GL codes a once-over. If the order was placed outside of Procurement Partners, they would like the Facility Administrator to review and approve at the first level. They want their AP team to be the last to review invoices, but their Executive Director has also asked to be involved in the approval process if the invoice exceeds $2,000.

Below is an example of how invoice approvals would be set up for this customer:

1. All invoices require Orderer approval

2. All “invoice only” invoices require Facility Administrator approval

3. All invoices over $2,000 require Executive Director approval

4. All invoices require AP approval