Everything about multi level approval for reimbursement
Expense management softwares are designed to make accounting and admin work less challenging and painful.
With efficient workflows, expense tracking has been more accessible than ever. But companies still require more visibility into each expense made through the software.
The top-level management practically should never keep track of most minor small expenses made in the company.
This causes sheer wastage of time and diverts their focus from productive activities. Yet, certain decisions concerning costs and accounting are to be brought under management’s eye.
To address this, spend management tools are enabled with a multi level approval workflow.
Through this, management can decide which expenses can be approved by lower management and which expense approval needs to go through the upper management.
Additionally, the approval process workflow is equipped with cards with pre-approval.
This article will walk through the multi level approval process and request approval system.
Multi level approval is the approval hierarchy based on the employee's roles in the expense management software.
This demonstrates that a single employee annot approve an approval request at any level. Still, the request shall travel through a predefined matrix based on the approval policy.
Every employee on each level has a different approval limit.
Spend management tools allow expense visibility and controlling from a broad view, but companies need more granular controls for approvals. With approval process workflow, you can empower managers by creating spend policies that allow better management of cash flow and employees.
Let’s understand why expense management platforms are equipped with a multi level approval workflow:
With a robust and rigorous expense approval workflow, top-level management need not be in the loop for every request raised but they cannot be eliminated from the approval process.
Certain high-value and high-dollar transactions need to be verified before processing.
With the approval process, management can get hold of such transactions. Transaction requests above a certain threshold will be directed towards them to better clarify the reasons for such transactions.
In order to declutter your policies, you can create an individual expense approval system for your organization.
Your high-performing teams will use a standard and consistent process for all incoming requests of Bill Pay, Reimbursements, and funding of cards.
This way, your employees might not be confused by which policy has approvals, so there shall be no variance in the end result with a standard approval policy.
Sometimes, managers can recklessly approve the requests without validating them, costing the company huge bucks.
To layer this process, a second approver for transactions is required. Ensuring the approval requests are double-checked before processing them to the employee.
Through a fast and easy-to-use approval process, there exists an uninterrupted flow of information between employees and managers.
Employee requests are immediately approved, reimbursements and out-of-pocket expenses are settled on the spot, Bill Pay requests are processed fastest, and new physical cards or virtual cards are created.
Before creating the approval process workflow, it is vital to draft an approval policy.
You can set an expense approval workflow to guide all your approvals based on your defined approval policy.
Approval policies help ensure each expense is routed through the correct approver flow as per their company policies making the process transparent.
After which, the payment can be verified by the finance team and entered into their accounting system.
In Volopay, an approval policy can be created, edited, or deleted by an admin only.
Creating an approval policy under Volopay is an effortless and straightforward process.
Follow the steps below to know how you can make an approval process:
1. Go to the settings tab, as shown below, and click on approval policy.
2. After clicking on ‘create approval policy’, you shall be redirected to the page which lets you create a new approval policy. Your policy will be triggered and activated for use by simply entering the details asked.
Under the ‘create approval policy’ option, the following fields need to be filled:
Policy name - policy name can be the purpose of creating the policy. It can be named after a specific budget or corporate card.
Amount - the amount field should be entered with the value you want the policy to be triggered or activated. For example, you set $10 as the amount. Every expense above $10 shall require approval before heading ahead.
Volopay offers corporate cards with pre approval. Meaning to say- expenses below a certain threshold will get automatically approved. Expenses below $10 will be auto-approved or pre-approved.
First-level approvers - As the name suggests, the first-level approvers are the initial approvers for the request. They have the authority to approve or reject any incoming transaction.
Usually, the budget owners are the first-level approvers; hence, they can make any change in the policy.
Second level approvers - After the first level approver accepts the transaction, the request is moved to the second level approver.
If, by any chance, there happens to be no second-level approver and pre-approval is enabled within the software, the request is automatically pre-approved.
Also, the approval amount for first and second-level approvers has to be different; it cannot be the same. You can manually set ranges in the ‘ranges’ field.
The budget settings is the place where you decide which approval policy will apply to bill payments associated with the budget.
The cards section of the settings has three fields.
Users can decide the approval policy that applies to cards associated with the budget and set the threshold limit beyond which the expenses will need to be reviewed by budget owner.
In cases where no approval policy is created, the default policy comes into action.
Default policy means all the approval requests will directly go to the admin and budget owner for approval, and they shall be solely responsible for any acceptance or rejection.
Your default policy is uneditable; you cannot alter the amount or ranges.
Volopay offers an extensive system of expense approval workflow to its users.
Being critical to expense tracking and granular expense details, a multi level approval workflow is all-consuming for expense management.
Therefore, Volopay has developed a sophisticated and user-oriented request approval system, where employees and managers can easily communicate in an open space.
In Volopay, you can create multiple departments like sales, marketing, human resource, IT, and tech.
The expenses raised against each department will be directed towards their departmental heads or budget owners.
This actively demonstrates that if an HR department employee raises a Bill Pay request from the IT department, its budget owner will be responsible for approving the request.
Volopay’s approval matrix stretches up to 5 levels.
For an approval policy, admins can create a maximum of 5-level deep approval matrix.
Usually, companies opt for such dense layering when the requests are of high value to them and require approval from the top-level management before heading further.
In the absence of an approval policy, the default policy shall be playing the field. Under default policy, all the transactions from 0 to infinity will be routed to the budget owner or admin by default.
A default policy cannot be altered in any situation. You can create an approval policy for customized control if you want an editable policy.
In a practical scenario, approving every forthcoming request is a challenging task, especially if the dollar amount of the proposal is too low.
Attending such requests can all together reduce the efficiency of the process and direct the manager’s attention to unrequired areas.
Therefore, to avoid this situation, Volopay offers its users pre-approval.
They can select a transaction limit below which all the expenses will be automatically approved, i.e., managers need not approve the requests for that amount.
For example, if your first-level approver transaction limit is $40, requests below this will be pre-approved. They will be immediately approved as and when raised by the employee.
The approval system has three roles:
Card owner - All employees own their unique cards, and become card owners. The functionality of card owners is limited only to requesting funds and making payments.
Budget owner - Budget owners are responsible for creating the budgets. They have access to all the cards attached to their budgets. And hence, they can load-unload funds, freeze or block cards and create new cards.
Admin - The admin is superior in the hierarchy. He can perform all the functions of a card owner and a budget owner.
A fund request shall require approval from two distinct approvers with the maker checker enabled.
The prerequisite is that the approvers should differ and not be on the same level.
Our software immediately notifies you if any unauthorized transaction occurs because the system runs policy checks before letting a transaction into the system.
It immediately flags it and notifies the administrator if it finds anything suspicious.