Here's a statistic that should embarrass our industry: I estimate 8 out of 10 SAP Business One companies I walk into are approving purchase orders over email. Or worse — verbally. "Yeah, go ahead and order it." Meanwhile, sitting inside their ERP, fully licensed, already paid for, is a complete approval workflow engine. It's called Approval Procedures. Almost nobody turns it on.
This is like buying a car with cruise control and driving cross-country with your foot on the gas the whole way. The feature is RIGHT THERE.
What Approval Procedures Actually Do
The concept is simple: when a user creates a document that matches your rules, B1 doesn't post it — it parks it as a draft and notifies the approver. The approver reviews, approves or rejects with comments, and only then does the document become real.
The engine lives at Administration > Approval Procedures > Approval Templates, and it's more capable than people expect:
- Conditions with teeth. "Purchase orders over $5,000" is the obvious one. But you can stack conditions: over $5k AND from a vendor created in the last 90 days. Over $25k requires TWO approvers. Discounts over 15% on any sales order. The condition builder handles AND/OR logic that covers 95% of real policies.
- Stage chains. Approval doesn't have to be one person. Route POs over $50k through the department head, then the controller, then the owner. Each stage sees the previous approver's comments. No more "I thought you approved it" — the chain is the audit trail.
- Approval by exception. The magic setting: documents that DON'T match any template post normally, no friction. Your team only feels the approval process on the transactions that actually need oversight. This is why adoption works — 90% of daily work is untouched.
The Five Approvals Every Company Needs
If you turn on nothing else, turn on these five. I've seen each one prevent a specific, expensive disaster:
1. Purchase orders over your threshold. Pick the number where a bad purchase hurts — for most SMBs, $5,000. The disaster it prevents: the $22,000 server order that a junior IT guy placed because a vendor told him the "promo ends Friday." With approvals, that PO parks until someone with budget authority looks at it. Without approvals, you've got servers.
2. Outgoing payments above a limit. A/P invoices and outgoing payments over $10,000 get a second pair of eyes. The disaster it prevents: duplicate payments. I watched a company pay the same $14,500 vendor invoice twice — once by check, once by wire — because two people were "handling it." An approval step on payments over the threshold would have caught the duplicate in ten seconds.
3. Sales discounts beyond margin. Any sales order or quotation with a discount over 15% (tune to your margins) routes to the sales manager. The disaster it prevents: the rep who discounts 35% to "win the deal" and wins you a loss. One company found a rep had given away $40,000 in margin over a quarter before anyone noticed. Approvals make the discount visible BEFORE it ships.
4. Journal entries to sensitive accounts. Manual journal entries hitting cash, equity, or intercompany accounts require controller approval. The disaster it prevents: the well-meaning bookkeeper who "fixes" the books with a journal entry that unbalances three months of reconciliations. Manual journals are where accounting goes to die — gate them.
5. New business partner creation. Every new vendor or customer master record gets reviewed before it's usable. The disaster it prevents: duplicate vendor masters (the #1 cause of duplicate payments), fake-vendor fraud, and the customer record with no tax ID that blows up your 1099s in January. Fifteen seconds of review at creation saves hours of cleanup later.
The Objections (And Why They're Wrong)
"It'll slow us down." No — it slows down the 5% of transactions that need scrutiny. The other 95% post exactly as before. And "slowing down" a $50,000 purchase order by four hours for a review is not a cost. It's due diligence.
"Our approvers won't check their inbox." B1's approval requests show up in the user's Cockpit and can trigger email alerts. But the real fix is cultural: make approval response time a metric. The companies that do this well have a rule — approvals answered within 4 business hours. The approver who sits on requests for three days gets a conversation, not a workaround.
"We'll just do it over email." Email approvals have no audit trail, no enforcement, and no connection to the document. When the auditor asks "who approved this $80,000 PO?" — "Dave said it was fine in an email I can't find" is not an answer. The approval procedure IS the answer, timestamped and attached to the document forever.
Setup: An Afternoon, Not a Project
This is not a six-week implementation. A competent B1 consultant sets up the five templates above in an afternoon:
- Define your thresholds (the numbers where oversight kicks in).
- Build the templates with conditions.
- Assign approvers and backup approvers (people go on vacation — plan for it).
- Test with a sample PO before going live.
- Train the team in 30 minutes: "if it parks, your approver gets pinged; here's what the approval screen looks like."
The most common mistake: making the conditions too clever on day one. Start simple — threshold-based, single approver. Add stage chains and compound conditions in month two, after the team trusts the process.
Turn it on. Your auditors will thank you, your controller will sleep better, and you'll never again discover a $22,000 server order that nobody approved.
