Invoice approval matrix
Company: [Company name]
Owner: [Controller or AP manager] · Approved by: [CFO or owner] · Effective: [YYYY-MM-DD] · Next review: [YYYY-MM-DD]
This matrix sets who may approve a vendor invoice for payment, up to what amount, who steps in when they are away, and what happens when an approval waits too long. Every invoice is approved by the full invoice amount, including tax and freight.
1. Approval limits by amount
Swipe the table sideways to see every column.
| Invoice amount | Approver | Backup approver | Second approval |
|---|---|---|---|
| Up to [$1,000] | [Budget owner or department manager] | [Assistant manager] | None |
| [$1,000.01] to [$10,000] | [Department manager] | [Director in the same area] | None |
| [$10,000.01] to [$50,000] | [Director] | [Controller] | [Controller] |
| Over [$50,000] | [Controller] | [CFO] | [CFO or owner] |
Example rows. Replace the amounts, roles and names with your own.
2. Rules by spend type
Swipe the table sideways to see every column.
| Spend type | Who approves | Extra rule |
|---|---|---|
| PO-backed goods and services | No further approval if the invoice matches the PO and receipt within [2% or $50] | Over the tolerance: the PO owner approves the difference |
| Non-PO operating expenses | The budget owner, by the amount table above | Coding to a GL account and cost center is required before approval |
| Recurring contracts (rent, leases, subscriptions) | [Contract owner] approves the contract once; invoices that match it need no further approval | Any change in amount goes back through the amount table |
| Utilities and telecom | [Facilities manager] | More than [15%] above the prior period needs a note |
| Software and IT services | [IT manager] and the budget owner | New software also needs [IT or security review] |
| Professional services (legal, consulting, audit) | [Engagement owner] | Hours and rates are checked against the engagement letter |
| Capital purchases over [$5,000] | [Controller] and [CFO] | Asset tag and depreciation coding before payment |
| First invoice from a new vendor | By the amount table | Paid only after the vendor setup checklist is complete |
Example rows. Keep the spend types you actually have and delete the rest.
3. Backups and substitutes
- Every approver names a backup in this matrix. The backup approves at the same limit, never higher.
- Approvers set a substitute before planned time away of more than [2 business days] and tell AP the dates.
- If both the approver and the backup are away, the invoice goes to the next level up in the amount table.
- A substitute approval is recorded under the substitute's own name, never under the approver's login.
4. Escalation
| Waiting for approval | What happens |
|---|---|
| [2] business days | Reminder to the approver |
| [4] business days | Reminder to the approver and the backup; AP may ask the backup to approve |
| [6] business days | Escalates to the next level in the amount table; AP manager notified |
| Payment due in [3] days or a discount ends | AP manager contacts the approver directly the same day |
Example timings. Set them from your payment terms, not the other way round.
5. Separation of duties
- Nobody approves an invoice for a purchase they requested or ordered themselves above [$1,000]; it goes to their manager.
- Nobody approves their own expense reimbursement or an invoice from a company they have a personal interest in.
- The person who creates or changes a vendor record (including bank details) does not approve that vendor's invoices or release payments.
- The person who enters invoices does not approve them or release payments.
- Splitting one purchase into several invoices to stay under a limit is not allowed. AP flags invoices from the same vendor that together pass a limit within [30 days].
- Small teams that cannot separate every duty: the [owner or CFO] reviews a list of all payments and vendor changes every [month] and signs it.
6. Records
- Each approval keeps the approver's name, the date and any note, attached to the invoice.
- Rejected invoices keep the reason and go back to [AP or the requester].
- Changes to this matrix are approved by [CFO or owner] and dated. Keep earlier versions.