"Who needs to approve this?" is a question your team should never have to ask. If the answer depends on who you ask, or on a policy PDF nobody has opened since it was written, the result is either delays (everything goes to the top) or risk (nothing goes anywhere).
Key takeaways
- An approval matrix says who can approve what, up to which amount, for each type of request.
- Base the limits on your real request history, and keep it to three or four tiers.
- Decide the edge cases up front: self-approval, split purchases, absence, and amounts that change after approval.
- The matrix works best when the workflow picks the approvers from the amount, not the requester.
An approval matrix answers that question once, in writing, for every type of request and every amount. This guide explains how to build one, how to choose the limits, and how to deal with the edge cases that break most matrices in practice.
What an approval matrix is
An approval matrix (also called a delegation of authority matrix, approval limits or signing authority) is a table that says who can approve what, up to which amount.
At its simplest it has three columns:
| Request type | Amount | Approvers |
|---|---|---|
| Purchase | Up to $1,000 | Manager |
| Purchase | $1,000 to $10,000 | Manager, department head |
| Purchase | Above $10,000 | Manager, department head, CFO |
Every row is a tier. A request falls into exactly one tier, and that tier says who has to approve it.
The amounts above are only an example. The right limits depend on the size of the company, its margins and how much risk it is willing to take on a single decision.
Why it matters
A good approval matrix does three things at once:
- Speeds up small decisions. A $300 software subscription should not wait for the CFO. Pushing small amounts down to managers removes most of the queue.
- Protects big decisions. Large or unusual commitments get more eyes, and the people who own the budget see them before money is spent.
- Makes audits boring. When an auditor asks how a $25,000 contract was approved, the answer is a rule and a record, not a story.
How to choose your limits
There is no universal table, but there is a reasonable method.
1. Start from real requests
Export the last 6 to 12 months of purchases, expenses or contracts. Sort them by amount. You will usually see that a large number of requests are small, and a small number of requests account for most of the money. That shape tells you where the tiers should be.
2. Put the first limit where most requests stop
The first tier should cover the bulk of routine requests, so that most of them need only one approval. If most of your purchases are under $500, a first limit of $1,000 keeps them moving.
3. Tie the top tier to real impact
The highest tier should catch commitments that would genuinely hurt if they were wrong: a meaningful share of a department's budget, multi-year contracts, or anything above what the CFO or owner wants to see personally.
4. Keep it to three or four tiers
Every tier you add is one more rule people have to understand. Most small and mid-sized companies are well served by three tiers for purchases and two for expenses.
5. Review it once a year
Companies grow and prices change. A limit that made sense at 20 people may create a queue at 80.
Sequential or all at once?
When a tier has more than one approver, decide how they approve:
- Sequential: the manager approves first, then the department head, then the CFO. Each approver sees what the previous ones decided, and senior people only spend time on requests that already passed the first check. This is the most common choice.
- Parallel: everyone receives the request at the same time and all must approve. Faster, but senior approvers review requests that may still be rejected by the manager.
Sequential is usually the better default for amount-based approvals. Use parallel when the approvers check different things, such as finance checking the budget while legal checks the contract.
The edge cases that break approval matrices
Most approval matrices look fine on paper and fail on these situations. Decide them up front.
Self-approval
What happens when the requester is also the approver for that tier, for example a department head buying something under their own limit? The usual rule: nobody approves their own request. The request skips that person and goes to the next approver or one level up.
Split purchases
Someone needs to buy $12,000 of equipment, the limit for a single approval is $10,000, and three requests of $4,000 appear the same week. This is called splitting, and the matrix should forbid it explicitly. The practical control is a periodic review of requests per supplier or per requester per month.
Absence and delegation
Approvers go on vacation. If nobody is designated, requests either wait or get approved by "whoever was around". Define a delegate for each approver, with dates, and make sure the delegation is recorded in the request history so it is clear who approved on whose behalf.
Missing approvers
Some tiers name a role, like "department head", that may not exist for every team. Decide the fallback: the next level up, or a named person in finance.
Amount changes after approval
If a $900 request becomes $1,400 after the quote arrives, it crossed a tier. The request should go back through approval at the new amount, not continue with the old approval.
Currency
If you buy in more than one currency, state which currency the limits are in and how to convert. Most companies use the company's reporting currency at the rate of the request date.
Example approval matrices
Small business (10 to 50 people)
| Request | Amount | Approvers |
|---|---|---|
| Purchase | Up to $2,500 | Manager |
| Purchase | Above $2,500 | Manager, owner or CEO |
| Expense report | Up to $500 | Manager |
| Expense report | Above $500 | Manager, finance |
Mid-sized company (50 to 300 people)
| Request | Amount | Approvers |
|---|---|---|
| Purchase | Up to $1,000 | Manager |
| Purchase | $1,000 to $10,000 | Manager, department head |
| Purchase | $10,000 to $50,000 | Manager, department head, CFO |
| Purchase | Above $50,000 | Manager, department head, CFO, CEO |
| Contract | Any amount | Department head, legal |
| Discount | Up to 10% | Sales manager |
| Discount | Above 10% | Sales manager, sales director |
These tables are starting points. Replace the amounts with ones based on your own request history, as described above.
Frequently asked questions
What is a delegation of authority (DOA) matrix?
It is another name for an approval matrix, common in larger companies and in audit language. A DOA usually covers more than purchases: hiring, contracts, pricing, capital expenses and legal commitments, each with its own limits.
Who should own the approval matrix?
Finance usually maintains it, and the CEO or the board approves it, since it delegates their authority. Department heads should review the tiers that affect them, because they live with the delays if a limit is too low.
Should approval limits be the same for every department?
Not necessarily. A marketing team that buys media may need a higher first limit than an office team buying supplies. Keep the structure the same and adjust the amounts per request type or department when the request history justifies it.
What happens when an approver rejects a request?
The request stops and goes back to the requester with the reason. Requiring a short reason on every rejection avoids the same request coming back unchanged. For small issues, sending the request back for changes is better than rejecting it.
From a spreadsheet to automatic routing
An approval matrix in a spreadsheet still depends on the requester picking the right approvers. The step that makes it work in practice is letting the workflow pick the approvers from the amount, so the requester only fills in the request.
In Easyflow, an approval step can use approval limits: you define the tiers by amount, each tier lists its approvers (a person, the requester's manager, someone chosen in an earlier step), and the request goes to the right people automatically. If the amount changes, the approvers are recalculated. Approvers can decide from the email, a delegate takes over while someone is out of office, and every decision is recorded in the request timeline. The Purchase order with approval limits and Discount approval processes in the gallery are ready to adapt.
For the full purchasing process around the matrix, from request to delivery, read our guide to the purchase approval workflow.