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Who should approve a purchase before it is ordered?

Prepared by the Flawian team · Reviewed .

A bank approval comes too late to prevent an order already placed. In the example, Mira may order up to $500, so her $1,200 filter order needed Jo's approval first. Only sixteen of the twenty filters arrived, so that approval did not show the invoice matched delivery. Permission to order, proof of delivery and approval to pay are separate checks.

Principle and explanation

A business may already have promised to pay before anyone opens the bank account. This example shows which question belongs before an order, which belongs before payment, and why one approval cannot answer both.

Commitment and payment are different events

State who can place orders or enter agreements, as well as who can release money. A bank approval happens too late to prevent an agreement that was already made. Check the actual contract before assuming it can be cancelled.

An approval needs evidence for its own question

Compare the request, authorised order, delivery evidence and invoice. The same person saying yes twice adds little if the second decision never checks what changed. The Charity Commission describes order and payment authority and receipt checks for charities in England and Wales; we use the control mechanism, not its legal duties for other firms.

Use the people you actually have

Separating duties can provide a second view. Where staff are limited, make the gap explicit and arrange feasible independent review. A later review is not the same as approval before committing, and no arrangement guarantees that mistakes or collusion are impossible.

Worked example

The order was approved. Four filters are still missing.

Mira wants twenty filters at $60 each: $1,200. Her firm's written policy lets her order up to $500. Larger commitments need Jo's approval before ordering. Jo approves this order; Mira then places it.

Only sixteen filters arrive, but the invoice charges for twenty. This example's contract requires payment for received goods. Jo checks the missing four, worth $240, before releasing that disputed part. Approval of the $1,200 order did not establish that all twenty filters arrived.

Later, Sol compares the payment record with the bank entry. That check asks whether the money movement was recorded correctly. It cannot replace the earlier decision to order or the delivery check. A routine $60 replacement can still follow Mira's delegated limit without waiting for Jo.

  • The people, $500 limit and payment term are invented company arrangements, not legal requirements for other businesses.
  • The example has three people and accessible records. It does not assume every small business can separate the same roles.
One purchase, three different questions
Point in the purchasePerson in this exampleQuestion and evidence
Before orderingJoMay we commit $1,200? Request and authority policy.
Before paymentJo, using Mira's receipt recordDoes the invoice match delivery and agreed terms? Four filters need checking.
After paymentSolDoes the bank movement match the recorded payment?

Common misconceptions

Only I can pay, so nobody else can commit the firm.
An order or signed agreement may come first. The authority to make that commitment needs its own boundary.
The order was approved, so the full invoice is ready to pay.
In the filter example, the receipt record still leaves four filters unexplained under the stated payment term.
Every purchase should wait for the owner.
The example permits Mira's ordinary $60 replacement. Clear delegation includes what she can decide and when she must ask.

First step

Trace one actual purchase

Find the request, agreement, delivery evidence, invoice and payment record for one purchase. Name who could approve each event and what they checked. If one person does everything, identify the missing independent check rather than recording a separation that does not exist.

Sources