Procurement Glossary
Approval Workflow procurement
Approval workflow in a nutshell:
An approval workflow is a clearly defined, usually digital approval process that regulates the approval of procurement requests according to predefined criteria and hierarchy levels. In Procurement , it ensures adherence to compliance guidelines and enables transparent, traceable control of all procurement processes.
Example: In a medium-sized company, purchase requisitions go through a three-stage approval workflow, whereby amounts up to EUR 5,000 must be approved by the team leader, up to EUR 25,000 by the department head and above that by the managing director within a maximum of 48 hours.
Everything buyers need to know about Approval Workflow Procurement
Everything buyers need to know about Approval Workflow Procurement
The Approval Workflow in Procurement optimizes and digitalizes the approval processes and thus creates more transparency and efficiency in procurement. This structured overview shows you how you can save time and reliably meet compliance requirements through automated approval processes.
Introduction to the Approval Workflow Procurement
"The approval workflow in Procurement is a structured process for approving procurement processes in companies. It ensures that all purchasing decisions are made in accordance with defined guidelines and taking into account the relevant hierarchical levels. An effective approval workflow contributes significantly to transparency, compliance and cost control in the procurement process. By digitizing and automating these approval processes, companies can increase their efficiency while minimizing potential sources of error. In this guide, you will learn about the most important aspects of the approval workflow in Procurement, from basic structuring to practical implementation and optimization."
What is the Approval Workflow in Procurement?
The approval workflow in Procurement refers to the structured approval process for procurement processes within a company. This process ensures that all orders and expenses are checked and approved by the responsible persons before they are implemented. Clear processes and responsibilities ensure compliance with internal guidelines and budgets, which leads to improved control and transparency in procurement.
Core elements of the approval workflow
Significance for Procurement
An effective approval workflow is essential for ensuring compliance and cost efficiency in Procurement. It enables controlled approval of expenditure, minimizes risks from unauthorized orders and promotes a responsible procurement culture. It also supports the strategic alignment of procurement by ensuring that resources are deployed in a targeted manner.
Approval workflow in Procurement: from manual approval processes to automated workflows
The approval workflow in Procurement is at the heart of efficient procurement processes. Building on the theoretical understanding of this approval process, it is becoming clear in practice how crucial a smooth process is for the cost efficiency and compliance of a company. Traditional methods are increasingly reaching their limits, underlining the need for a transformation to modern approaches. This development not only enables greater process speed, but also minimizes risk management and increases transparency.
Old: Manual release processes
Traditional approach:
In many companies, approval processes in Procurement were carried out manually for a long time. Purchase requisitions were forwarded to superiors by email or in paper form. The review was often carried out without clear criteria and the documentation was inconsistent. Communication channels were lengthy and there were often delays. There was also an increased risk of errors due to duplicate data entries or lost documents. Tracking approval steps was difficult, which impaired transparency and compliance.
New: Automated approval workflows
Approval Workflow:
Modern systems rely on automated approval workflows that are integrated into digital procurement solutions. Predefined approval rules ensure that requests are automatically forwarded to the relevant people. Electronic notifications and dashboards provide a real-time overview of pending approvals. Innovation features such as mobile approvals via apps and the integration of AI for review support increase efficiency. This leads to shorter processing times, reduced error rates and seamless documentation of all process steps for audit purposes.
Practical example: Implementation at GlobalTech AG
GlobalTech AG introduced an automated approval workflow in its Procurement department. The transformation enabled them to reduce the average approval time for orders from 5 days to just a few hours. Transparency increased significantly as all approval steps can now be viewed centrally. The compliance rate rose to 99% and unauthorized spending was virtually eliminated. Employees also reported a 60% reduction in administrative tasks, which gave them more time for strategic activities.
Conclusion on supplier evaluation in the Approval Workflow Procurement
The Approval Workflow in Procurement is an indispensable tool for efficient and compliant procurement management. The combination of clear structures, automated processes and strategic control not only optimizes costs and minimizes risks, but also creates the basis for a sustainable procurement organization. Success lies in the balance between standardized processes and the necessary flexibility for operational requirements.
