Approval threshold
Delegated authority limit · Spending limit
An approval threshold sets the value, risk level or type of decision that requires a specified level of authority before a commitment can be made.
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Simply put
What it means in ordinary work
It defines who is allowed to approve what. Thresholds should reflect both value and risk, not only the purchase price.
Why it matters
Clear thresholds support consistent decisions and prevent unauthorised commitments. They also give approvers enough context to make a meaningful decision.
A hypothetical in practice
A hypothetical policy requires category managers to approve purchases below one threshold, a procurement director above it and a cross-functional committee for critical contracts regardless of value.
Common pitfalls
Splitting purchases to stay below a threshold is a control breach. Monitor patterns and total supplier commitments.
Approval without the proposal, risk assessment and budget context is a rubber stamp. Provide decision material.
Regional lens
How this lands where you work
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As-of date for date-sensitive regional content: 5 November 2026. Read the review policy.