Purchase Order Approval

Most companies have established their own processes of reviewing and approving purchase orders. Generally, all purchase orders require at least one approval, and orders with amounts above a particular threshold require one or more additional approvals.

With MYOB Acumatica, you can set up as many approvals for specific types of purchase orders as your company's policies require. You can configure parallel or multistage approvals of orders.

Note: The functionality related to approvals is available only if the Approval Workflow feature is enabled on the Enable/Disable Features (CS100000) form.

Configuration of Approval for Purchase Orders

To make it possible to set up the approval of purchase orders, perform the following general steps:

Identify the employees who will be reviewing purchase orders of specific types, and plan the workgroups that will include these employees. Review the organization's hierarchy of workgroups on the Company Tree (EP204061) form, and add any new workgroups needed for approvals.
Do the following for each type of purchase orders (if you will have different rules for different types):
- Decide whether a single approval is required or multiple approvals are required; if multiple approvals are required, determine whether they should be performed in parallel or in multiple stages. If multiple parallel approvals are required, you will need to create multiple approval maps.
- Define the rules for assignment of specific orders to specific employees. Assignment can be done unconditionally or can be based on the specific properties of the order.
- Specify these rules by using approval maps, which are created on the Assignment and Approval Maps (EP205500) form.
If needed, create email templates to notify approvers about new orders pending approval—then, once an order has been assigned to a specific employee or multiple employees for approval, the system generates a email or emails (based on such a template) that will be sent to the employees to notify them about the order pending approval. You can create email templates by using the Email Templates (SM204003) form.

For details on setting up the approval of purchase orders, see To Set Up Approval of Purchase Orders.

General Rules for Configuring Parallel Approvals

If your company requires multiple independent approvals for a purchase order, you can configure parallel approvals. In this case, every purchase order is approved by multiple employees in any order; the number of required approvals can depend on the document total, specific vendor, or particular item. For example, in a small company, each purchase order might be approved by a buyer, purchasing manager, and CFO independently—in this case you will need three maps, each of which assigns all orders unconditionally to one of these approvers.

In general, you will need multiple approval maps, developed by using the Assignment and Approval Maps form, for each purchase order type: Normal, Blanket, and Standard. For each type, the rules can be very simple if all orders are to be approved by the same persons, or more complicated if selection of the approver depends on the properties of the order, such as total amount, number of order lines, or specific products to be purchased.

Note: For each order type, you should configure one approval map per required approval.

For details, see To Create Approval Maps for Parallel Approvals.

Parallel Approval Workflow

After parallel approval has been configured for a specific type of purchase orders in your system, an order of the type will be processed as follows. When a user saves a new purchase order that has the Hold check box cleared on the Purchase Orders (PO301000) form, the system applies all the applicable approval maps to select the appropriate approvers for the order and changes the status of the order to Pending Approval.

If email templates are specified on the Approval tab of the Purchase Orders Preferences (PO101000) form, emails are generated and sent to the employees who have been assigned as approvers.

Each approver may approve or reject the order by using the Approvals (EP503010) form. If any approver rejects the order, the system assigns the Rejected status to the order. Rejected orders cannot be removed from the system; they are kept with the history of approvals. If your organization's policies allow editing of rejected orders, the orders can be modified. Any modification removes all approval records for this order, and the process of approval starts again once the Hold check box is cleared on the Purchase Orders form.

Note: If the system (when applying the rules of assignment) doesn't assign an approver to an order, the order gets the Open status. For instance, suppose you created an approval map that assigns approver for orders with amounts greater than $500. If you create an order with an order total of $450, no approver will be assigned, and the order will get the Open status once you take it off hold.

If purchase orders should be approved by multiple persons, order statuses do not indicate whether the orders are approved by some users or not yet approved at all. Once an order is assigned for approval, it has the Pending Approval status until all approvals have been completed. Detailed information about multiple approvals appears on the Approvals tab of the Purchase Orders form. The order gets the Open status only after all required approvals have been received. Open purchase orders may be emailed, or printed and mailed, to the vendor.

Configuration of Multistep Approvals

If in your company a purchase order of a specific type should be approved sequentially by multiple people, you should configure multistage approval of orders.

Note: To configure multistep approval for orders of a specific type, you need to create only one approval map (which would assign approvers in multiple stages) and specify this map for orders of this type on the Approvals tab of the Purchase Orders Preferences form.

Consider an example of multistep approvals. You might require that all purchase orders in your company be approved by a buyer (a member of the Buyer Workgroup), then the orders should be approved by the purchase manager (who belongs to Purchase Manager Workgroup), and that the orders above $5000 then be signed by the CFO (the sole member of CFO). The assignment rules for multistage approval should be designed in such a way that an order, when it is saved, is assigned to Buyer workgroup only if its current approval group is none, to Purchase Manager workgroup when its current approval group is Buyer, and to the CFO workgroup when its current approval group is Purchase Manager and only if the order total is greater than $5000. For each approval level, you can add as many level-specific conditions as needed (such as whether the order amount exceeds specific threshold amount or whether the order lists specific items).

For details, see To Create an Approval Map for Multistage Approvals.

Multistep Approval Workflow

After multistep approval has been configured in your system, an order of the type will be processed as follows: When a user saves a purchase order with the Hold check box cleared, the system applies the specified rules to select the initial approver for the order and changes the status of the order from On Hold to Pending Approval.

Note: Upon approval map application, if an order has not been assigned to anybody, its status changes to Approved. For instance, if only orders with amounts that exceed a specific threshold should be approved, specify conditions that assign only orders with amounts exceeding this threshold.

Once the initial approver approves the order, the system assigns the next approver, and so forth. Each of the approvers will be able to view the document at the appropriate time (upon assignment to the first approver, or after the previous approval for subsequent approvals) by using the Approvals (EP503010) form.

Note: If an order is first approved by an employee of a workgroup located higher (according to the company tree) than any of the assigned approvers, or by an assigned approver who belongs to an higher group than other approvers, the order gets all the required approvals at once.

If any of the approvers rejects the order, the system assigns the Rejected status to the order. Rejected orders cannot be removed from the system because they are kept with the history of approvals. If your organization's policies allow editing of the rejected orders, the orders can be modified. Any modification removes all approval records for this order, and the process of approval can be started again from the lowest level.

Once the last approver approves the order, the status of the order changes to Open. Open purchase orders may be emailed, or printed and sent to the vendor by mail.

Approval Escalation

Every workgroup has a wait time specified on the Company Tree (EP204061) form. If a document assigned to a specific workgroup for approval is not approved by any user of the workgroup during the group's wait time, then the document becomes escalated—visible to the group that is one level or multiple levels up in the company tree—and any user from this higher-level workgroup can review the document and approve or reject it. If an order that should be approved by multiple approvers in a multistage approval process has been approved only by an approver from the highest-level workgroup (specified for this approval process), the order gets the Open status and other approvals become unnecessary.

For some groups on the company tree, you can specify whether escalation bypasses them.