Purchase Orders: Approving Purchase Orders
Purpose Statement
This guide explains how authorized personnel review, manage, and approve purchase order requests submitted by department members. The approval process ensures fiscal responsibility, verifies budget availability, and maintains proper documentation for all procurement activities. Authorized approvers validate purchase requests, complete missing information, and authorize expenditures according to department policies and budget constraints.
Background Information
Purchase order approval is a critical step in the procurement workflow that maintains financial accountability and ensures proper use of department resources. Authorized personnel with approval permissions can review submitted requests, verify all required information is complete and accurate, and either approve or reject purchases based on budget availability, necessity, and compliance with department policies.
The approval process may involve single or multi-level authorization depending on the dollar amount, funding source, or item category. Approvers are responsible for ensuring all vendor, billing, and delivery information is correct before finalizing the purchase order for processing.
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Required Permissions
Users performing purchase order management and approval must have:
- Assets module access permissions
- Purchase order approval authority
- Vendor selection and modification rights
- Billing agency access for budget verification
- Full purchasing permissions to complete incomplete requests
Contact your system administrator if you have been designated as an approver but cannot access the approval functions described in this guide.
Step-by-Step Guide
Best Practices
Review Process
- Verify all required fields are complete before approval
- Confirm budget availability before approving any purchase
- Check that quantities and pricing are accurate and reasonable
- Ensure vendor selection is appropriate for the items being ordered
Budget Management
- Review current budget status before approving purchases
- Consider timing of expenditures relative to fiscal year
- Verify proper budget codes and grant funding restrictions
- Track cumulative spending to avoid budget overruns
Documentation Requirements
- Read all requestor comments to understand purchase justification
- Add approver notes documenting the decision rationale
- Note any special conditions or follow-up actions required
- Maintain clear audit trail for financial accountability
Vendor Considerations
- Verify vendors are in good standing with the department
- Confirm vendor can meet delivery timeframes
- Check for existing contracts or preferred pricing agreements
- Consider vendor reliability and past performance
Communication
- Coordinate with receiving location contacts before approval
- Notify requestors promptly of approval decisions
- Communicate any changes made to the original request
- Provide clear instructions for any conditional approvals
Troubleshooting & FAQs
Q: What if important information is missing from the purchase order request? A: As an authorized approver, you can complete missing information such as vendor selection, billing agency, or contact person before approving. If critical details cannot be determined, contact the requestor for clarification before proceeding.
Q: Can I modify the items or quantities in a purchase order? A: You should coordinate with the requestor before making significant changes to items or quantities. Minor adjustments for budget or availability reasons may be appropriate, but substantial changes should be discussed with the original requestor.
Q: What if the budget cannot support the requested purchase? A: If budget limitations prevent approval, document the reason in comments and coordinate with the requestor about alternative options such as reduced quantities, different items, or waiting for the next fiscal period.
Q: How do I reject a purchase order request? A: Contact your system administrator for the proper procedure to reject or deny purchase orders in your system. Document the reason for rejection in the comments section and communicate the decision to the requestor.
Q: Can I approve a purchase order retroactively for items already purchased? A: Yes, authorized users can approve purchase orders entered after the fact. This is common for emergency purchases or situations where immediate procurement was necessary. Ensure all documentation is complete and accurate.
Q: What happens after I approve a purchase order? A: Once approved, the purchase order moves to the ordering stage where the vendor is contacted and the order is placed. The receiving location will be notified to expect delivery, and the purchase is tracked through receipt and payment.
Q: How do I know if a purchase requires additional approval levels? A: Your agency's approval workflow configuration determines if multiple approvers are required based on dollar amount or item category. Contact your purchasing department or system administrator for details about your specific approval hierarchy.
Q: Can I approve my own purchase order requests? A: This depends on your department's policies. Some agencies allow self-approval for authorized personnel, while others require separation of duties. Follow your department's established purchasing policies.
Additional Considerations
Approval Authority Limits
- Understand your dollar amount approval thresholds
- Know which purchases require higher-level authorization
- Follow competitive bidding requirements for large purchases
- Adhere to grant-funded purchase restrictions
Compliance Requirements
Purchase order approvals must consider:
- Department purchasing policies and procedures
- State and federal procurement regulations
- Grant funding terms and allowable expenses
- Audit requirements and documentation standards
Fiscal Responsibility
Approvers are accountable for:
- Ensuring purchases are necessary and appropriate
- Verifying budget availability before commitment
- Preventing unauthorized or wasteful spending
- Maintaining accurate financial records
Post-Approval Monitoring
After approval, approvers should:
- Monitor delivery status and timelines
- Verify receipt of items matches the purchase order
- Address discrepancies or delivery issues promptly
- Ensure proper reconciliation with invoices
System Integration
Approved purchase orders integrate with:
- Budget tracking and financial management systems
- Inventory management for stock level updates
- Vendor payment and accounts payable processes
- Audit trails and compliance reporting
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