Procurement Glossary
Order release: definition, process steps and importance in Procurement
November 19, 2025
Order approval is a central control mechanism in the procurement process that ensures that orders are only triggered after prior review and approval by authorized persons. This process ensures budget adherence, compliance and strategic alignment of all procurement activities. Find out below what order approval means, how the process is structured and which key figures are relevant for successful implementation.
Key Facts
- Order release is a multi-stage approval process before the final order is triggered
- Release levels are based on order value, Category and risk assessment
- Digital workflows reduce throughput times by up to 60% compared to paper-based processes
- Automated approvals under defined thresholds speed up routine orders
- Integration into ERP systems enables complete traceability and audit trails
Contents
What is order approval? Definition and process in Procurement
Order release refers to the structured approval process by which orders are checked and authorized before they are finally sent to suppliers.
Core elements of order release
The approval process comprises several review levels, which vary depending on the size and structure of the company. The main components are
- Technical check of the requirement request for completeness and correctness
- Budget check and cost center allocation
- Compliance check with regard to internal guidelines and external requirements
- Supplier and contract review
Order release vs. requirement release
While the confirmation of requirements validates the fundamental need for procurement, order approval focuses on the actual implementation. It takes place after supplier selection and price negotiations, but before the final order is submitted.
Importance of order approval in Procurement
Modern order approval processes are an integral part of order processing and contribute significantly to risk minimization and cost control. They create transparency regarding procurement activities and enable strategic control of the purchasing volume.
Process steps and responsibilities
The systematic design of order approval processes requires clear structures and defined responsibilities. Modern companies rely on multi-stage workflows with automated elements.
Multi-level release hierarchy
Typical release levels are based on order values and risk categories. The structure usually comprises
- Automatic release for routine orders under defined thresholds
- Departmental approval for standardized medium-value procurements
- Purchasing manager approval for strategically relevant or high-value orders
- Management approval for exceptional or critical procurements
Digital workflow integration
Modern ERP systems enable the seamless integration of approval processes into the handling processes. Automated notifications, escalation mechanisms and mobile approval options significantly speed up throughput times.
Exceptional and summary proceedings
Special emergency orders and shortened release paths are defined for time-critical procurements. However, these require downstream documentation and justification of urgency.
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Important KPIs and target figures for order approvals
Measuring the performance of the approval process requires specific key figures that reflect both the efficiency and quality of the approval procedures.
Lead time key figures
The average approval time is the key efficiency indicator. The time between the release request and final approval is measured, differentiated by:
- Order value categories (under €1,000, €1,000-10,000, over €10,000)
- Categories and risk categories
- Release levels and organizational units involved
Quality and compliance metrics
Approval quality is measured by rejection rates, rework rates and compliance violations. Key purchasing indicators include the number of incomplete approval requests and the rate of compliant approvals.
Degree of automation and cost efficiency
The proportion of automatically approved orders shows the progress of digitalization. In addition, the process costs per approval and the personnel resources tied up in manual approvals are recorded in order to identify optimization potential.
Process risks and countermeasures for order releases
Inadequately designed approval processes can lead to considerable operational and financial risks. Systematic risk analysis and preventive measures are therefore essential.
Delay risks and throughput times
Overly complex approval hierarchies lead to extended procurement cycles and can jeopardize critical delivery deadlines. This is particularly problematic:
- Vacation-related leave of absence without defined substitution rules
- Sequential instead of parallel release steps for non-critical orders
- Lack of escalation processes in the event of release delays
Compliance and control risks
Insufficient approval control can lead to budget overruns, maverick buying and compliance violations. Critical weaknesses arise from unclear approval powers and a lack of dual control principles for high-risk procurements.
System failures and continuity planning
The reliance on digital release systems requires robust backup procedures. Manual emergency processes must be defined for system failures and tested regularly to ensure continuity of supply.
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Practical example
A medium-sized mechanical engineering company implements a three-stage digital order approval process. Orders under €500 are approved automatically, orders up to €5,000 require the approval of the department head, and the purchasing management is also involved. The system automatically checks budget availability and supplier status. In the case of a special order for spare parts worth €12,000, the request passes through both approval stages within four hours thanks to mobile notifications.
- Reduction of the average release time from 3 days to 6 hours
- Increased process reliability through automated compliance checks
- Complete traceability of all release decisions
Current developments and effects
Digitalization is fundamentally transforming order approval processes. AI-based systems and automated workflows are shaping the future of procurement approval.
AI-supported approval decisions
Artificial intelligence is revolutionizing order approval through intelligent risk analysis and pattern recognition. Machine learning algorithms evaluate orders based on historical data and automatically identify anomalies. This enables:
- Dynamic adjustment of approval thresholds based on supplier performance
- Predictive analytics for budget overruns and compliance risks
- Automated categorization and prioritization of release requests
Mobile-first approval processes
Smartphone-based approvals are becoming the standard, especially for managers who travel a lot. Progressive web apps enable location-independent approvals with complete audit documentation.
Blockchain integration for compliance
Distributed ledger technologies create immutable approval trails and increase transparency in regulated industries. Smart contracts automate rule-based approval decisions and reduce manual intervention.
Conclusion
Purchase order approval is an indispensable component of modern procurement organizations, ensuring control, compliance and efficiency in equal measure. Digital workflows and AI integration are transforming traditional approval processes into intelligent, adaptive systems. Companies that strategically design and continuously optimize their approval processes achieve significant benefits in lead times, cost control and risk management. The balance between necessary control and operational speed remains the key to success.
FAQ
What is the difference between order approval and invoice approval?
The order release takes place before the order is triggered and approves the planned procurement. The invoice release takes place after delivery and confirms the proper provision of services. Both processes have different review criteria and responsibilities, but complement each other in the overall procurement process.
Which order values require which release levels?
Approval thresholds vary depending on company size and sector. Typical structures provide for automatic approvals up to €500, department head approval up to €5,000 and management approval from €25,000. Critical Categories or new suppliers may require lower thresholds, regardless of order value.
What is the maximum time an order release should take?
Best practice companies achieve average release times of 4-8 hours for standard orders. Complex approvals should not exceed 48 hours. Automated systems enable immediate approvals for routine orders, while critical procurements can be deliberately given longer review times.
What role does order approval play in budget control?
Order release is the central control instrument for budget compliance in Procurement. It prevents budget overruns through automated availability checks and enables early control measures. Integrated systems block orders in the event of insufficient budget coverage and create transparency about planned expenditure in real time.
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