Approval should happen before the commitment when possible
A receipt proves money was spent. It does not prove the company intended to spend it. For subscriptions, contractors, equipment, travel, and vendor contracts, approval is more valuable before the company becomes obligated.
The policy should distinguish buying authority from payment authority.
Build a short approval matrix
Set thresholds by amount or spend type and name the approver for each level. Include recurring contracts, budgeted spending, non-budgeted spending, employee reimbursements, and emergency exceptions.
Avoid a matrix so complicated that employees route every purchase to the founder anyway.
Send approval evidence to bookkeeping
The accounting team should be able to see invoice, business purpose, approver, account coding, and contract period when relevant. For recurring vendors, retain the original approval and require a new review when price or scope changes.
This makes close review faster and reduces unexplained spend.
Review the policy as the company delegates
Approval limits that made sense at five employees may bottleneck a team of fifty. Adjust thresholds as managers gain budget responsibility while preserving separation for high-risk payments.
Good controls should make routine spending faster, not slower.
Questions buyers usually ask
What should an expense approval policy include?
Define who can commit spend, approval thresholds, treatment of recurring and non-budgeted purchases, exception handling, required evidence, and who can release payment.
Is a receipt the same as approval?
No. A receipt documents the transaction after it occurred. Approval documents the company's authorization to incur the cost.
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A reliable monthly close is not a pile of categorized transactions. It is a repeatable process that reconciles source accounts, resolves exceptions, reviews the balance sheet, publishes statements, and gives operators a stable version of the month.