Why purchase orders and approval controls matter more as businesses grow
A department needs something.
Someone finds a supplier, agrees on the price, and places the order.
A few days later, the supplier sends an invoice to Finance.
Finance asks:
“Who approved this?”
Sound familiar?
For many businesses, Finance is still treated as the final checkpoint in the purchasing process rather than being involved before the money is committed.
That creates a problem.
By the time an invoice reaches Finance, the business has already made the purchasing decision. Finance can record the expense, question it, or delay payment—but the opportunity to control the spending has largely passed.
This is where purchase orders and structured approval processes become important.
Finance Shouldn’t Be the Last to Know
One of the biggest challenges businesses face as they grow is that purchasing decisions become distributed across different departments.
Marketing needs an agency.
IT needs new equipment.
Operations needs supplies.
HR needs training services.
Sales needs promotional materials.
Each department may have legitimate reasons for spending money. The problem arises when those purchases happen without a consistent process.
Finance eventually sees the cost when:
- An invoice arrives
- A payment request is submitted
- An expense appears in the bank account
- Someone asks Finance to reimburse an employee
At that point, Finance is left trying to answer questions that should ideally have been answered earlier:
- Was this purchase necessary?
- Was it within budget?
- Who approved it?
- Was there an existing supplier?
- Was the quoted price reasonable?
- Was the purchase already made elsewhere?
- Which department or cost centre should carry the expense?
The issue isn’t necessarily that employees are spending irresponsibly.
The issue is that the business lacks visibility before spending happens.
The Difference Between a Request, a Purchase Order and an Invoice
A strong purchasing process separates the decision to spend money from the recording and payment of that spending.
These are different stages.
1. Purchase Request
A department identifies a need and requests approval to spend money.
For example:
Marketing requires 500 branded promotional bags for an upcoming activation.
The request can include the supplier, estimated cost, purpose, budget and required date.
2. Approval
The appropriate person reviews the request.
Depending on the business, approval may depend on:
- Amount
- Department
- Type of purchase
- Available budget
- Supplier
- Strategic importance
A KSh 5,000 purchase may require a different approval level from a KSh 500,000 purchase.
3. Purchase Order
Once approved, the business issues a purchase order to the supplier.
The PO creates a formal record of what the company has agreed to purchase.
It can capture:
- Supplier
- Items or services
- Quantities
- Agreed prices
- Expected delivery
- Purchase terms
- Relevant department or project
4. Invoice
The supplier sends an invoice for the goods or services provided.
Finance can then compare the invoice against what was actually approved and ordered.
5. Payment
Only after the purchase has passed the relevant checks should payment be processed.
This creates a much stronger chain:
Request → Approval → Purchase Order → Delivery → Invoice → Payment
Instead of:
Purchase → Invoice → Finance asks questions
The “Buy Now, Explain Later” Problem
A common purchasing problem is what could be called the “buy now, explain later” approach.
Someone makes a purchase because they need something urgently.
The supplier delivers.
The invoice arrives.
Finance is then expected to process it.
When Finance asks why the purchase was made, the answer might be:
“The department needed it.”
That may be true.
But it doesn’t answer whether the purchase was approved, budgeted for or commercially appropriate.
More importantly, Finance has very little ability to prevent the same situation from happening again.
Without a process, businesses can end up with:
- Unplanned spending
- Purchases outside approved budgets
- Duplicate orders
- Unauthorised suppliers
- Incorrect quantities
- Price discrepancies
- Difficult invoice matching
- Payment disputes
- Poor visibility of committed spending
And these issues become harder to manage as transaction volumes increase.
Purchase Orders Give Finance Visibility Before Payment
One of the biggest benefits of purchase orders is that they create visibility before the invoice arrives.
Imagine Finance knows that the business has already approved:
- KSh 200,000 for marketing services
- KSh 150,000 for office equipment
- KSh 80,000 for professional services
- KSh 50,000 for event materials
Finance can see not only what has already been spent, but also what the business has committed to spending.
That distinction matters.
A company may look financially healthy based on its current bank balance, while having significant outstanding commitments that haven’t yet appeared as expenses or invoices.
Purchase orders help provide that additional layer of visibility.
Matching the PO to the Invoice
One of the most useful controls in accounts payable is comparing what was ordered with what was actually invoiced.
For example:
Purchase Order
10 laptops × KSh 80,000
Total: KSh 800,000
Supplier Invoice
10 laptops × KSh 80,000
Total: KSh 800,000
Everything matches.
Now imagine the supplier invoice says:
10 laptops × KSh 90,000
Total: KSh 900,000
There is a KSh 100,000 difference.
Without the original purchase order, Finance may have difficulty identifying the discrepancy.
With the PO, the difference becomes immediately visible.
The same principle applies to quantities.
If a business ordered 100 units but receives an invoice for 150, the finance team has something against which to check the invoice.
This doesn’t mean every invoice should automatically be rejected when something differs.
It means Finance has the information needed to investigate the difference before payment.
Approval Thresholds Can Keep Controls Practical
Another concern businesses sometimes have is that adding approval controls will make purchasing painfully slow.
It doesn’t have to.
The solution is to design controls around the level of risk.
For example:
| Purchase Value | Possible Approval |
|---|---|
| Up to KSh 10,000 | Department Manager |
| KSh 10,001–50,000 | Department Head |
| KSh 50,001–250,000 | Finance + Department Head |
| Above KSh 250,000 | Senior Management |
The exact thresholds will depend on the business.
The principle is what matters.
Not every purchase needs the same level of approval.
A well-designed process should make low-value, routine purchases easy while applying greater scrutiny to significant spending.
Finance and Procurement Should Work Together
Purchase controls aren’t solely a Finance responsibility.
Procurement, Finance and individual departments all have different roles.
Procurement
Focuses on suppliers, pricing, sourcing and purchasing processes.
Departments
Define what they need and why they need it.
Finance
Provides financial control, budget visibility, accounting and payment oversight.
When these functions operate independently, gaps can appear.
A department may know what it needs.
Procurement may know where to buy it.
Finance may know what the business can afford.
The strongest purchasing process brings those perspectives together before the money is committed.
Where Accounting Software Can Help
As purchasing volumes increase, managing purchase orders, bills and supplier information through spreadsheets and email becomes increasingly difficult.
Accounting platforms such as QuickBooks and Zoho Books can help businesses centralise purchasing and accounting information rather than keeping different parts of the process in separate spreadsheets, emails and folders.
Depending on the setup, businesses can use accounting software to manage areas such as:
- Suppliers and vendor records
- Purchase orders
- Bills
- Expenses
- Payments
- Approval workflows
- Financial reporting
- Supporting documentation
The important point is that software isn’t the control by itself.
A business can have sophisticated accounting software and still have poor purchasing controls if employees are allowed to bypass the process.
Technology should support a clearly defined workflow.
Don’t Make Finance the Department That Says “No” to Everything
Good financial control isn’t about blocking every purchase.
It is about making sure the business knows:
What are we buying?
Why are we buying it?
Who approved it?
How much will it cost?
Which budget does it belong to?
Have we already committed to this spending?
Does the invoice match what we agreed to purchase?
Those questions shouldn’t create unnecessary bureaucracy.
They create accountability.
And when the process is clear, employees often find purchasing easier because they know exactly what is required to get a purchase approved.
The Real Goal Is Better Spending Visibility
The purpose of purchase orders isn’t to create more paperwork.
It’s to give the business visibility and control over spending.
As a company grows, Finance needs to move beyond simply recording what has already happened.
It needs to understand what the business is about to commit to.
That’s the difference between reactive financial management and proactive financial control.
If Finance only sees the transaction after the invoice arrives, it is largely managing history.
If Finance can see approved purchases and commitments before payment, it can help the business manage spending while decisions are still being made.
A Simple Purchasing Process to Start With
Businesses don’t necessarily need a complicated procurement system to improve their controls.
A simple process can make a significant difference:
1. Department identifies the need
What is required and why?
2. Purchase request is submitted
Include estimated cost, supplier and budget.
3. Appropriate approval is obtained
Based on the value and nature of the purchase.
4. Purchase order is issued
The approved purchase is formally documented.
5. Goods or services are received
The business confirms what was actually delivered.
6. Invoice is checked against the PO
Price, quantity and supplier details are verified.
7. Finance processes payment
Only after the required checks are completed.
This creates a clear audit trail from the original request all the way to payment.
Finance Should Know About the Spend Before It Becomes an Expense
The bigger a business becomes, the harder it is to control spending through informal conversations, emails and spreadsheets.
Purchases happen across departments.
Suppliers increase.
Transaction volumes grow.
Budgets become more complex.
And eventually, Finance cannot rely on simply knowing everyone who is making purchasing decisions.
A structured purchase order and approval process gives Finance something much more valuable:
visibility before the money leaves the business.
Because financial control isn’t about discovering where the money went.
It’s about helping the business make better decisions about where the money goes in the first place.
How Remotix Solutions Can Help
Remotix Solutions helps businesses improve their finance and accounting processes through technology solutions such as QuickBooks and Zoho Books.
From purchasing and supplier management to bills, expenses, reporting and financial visibility, the right system can help reduce manual processes while giving Finance greater control over day-to-day spending.
If your Finance team is regularly asking “Who approved this purchase?” after the invoice has already arrived, it may be time to rethink the purchasing process.