Approval Matrix, Escalations & Audit Logs: Control Without Slowing Execution

Why approvals break in real operations

Most organizations implement approvals as “one extra step” in the software. The intent is right, but the design is incomplete. Approvals fail for three reasons:

• No risk model: low-risk and high-risk requests are treated the same.
• No SLA / escalation: pending items become invisible work—teams start chasing on WhatsApp.
• No auditable history: when something goes wrong, nobody can prove who changed what and why.

Build a scalable approval matrix (not a static table)

A scalable matrix is not just “amount slabs”. It is a combination of object, risk triggers, roles, and evidence. Start by defining approvals around business objects:

• Purchase Indent / Purchase Order
• Vendor onboarding / vendor rate changes
• Sales discount / pricing overrides
• Credit limit changes / dispatch release on overdue
• Expense claims / advances
• Payments / advance payments / exceptions

Risk triggers that actually matter

Amount is only one trigger. Real control comes from combining multiple triggers:

• Value bands: 0–50k, 50k–2L, 2L+ (example)
• Deviation: beyond budget, beyond standard price, beyond lead-time tolerance
• Entity risk: new vendor/customer, blacklisted, overdue, high return rate
• Category: capex vs opex, critical spares, regulated items
• Urgency: emergency purchase, expedited dispatch

Approvers should be role-based (with delegation)

Approvals must run even when people are on leave. Design the workflow around roles: Procurement Head, Finance Controller, Ops Head, Director. Then add these controls:

• Delegation: acting approver during absence.
• Maker-checker: maker cannot approve their own request.
• Parallel approvals: where required (example: capex needs Ops + Finance).
• Re-approval rules: if amount/terms change after approval, it must re-route.

Evidence requirements (the missing piece)

Approvals become weak if they can be approved without proof. Define evidence per object:

• PO deviation: last purchase price + comparative quotations
• Discount approvals: margin impact snapshot + customer segment
• Expenses: bill copy + purpose + cost center / project reference
• Advance payments: proforma invoice + delivery commitment + SLA

Escalations: keep work moving without chasing

Controls become operational only when each approval has a defined SLA. Escalations should change responsibility and visibility—not silently skip controls.

• SLA per object: expense approvals vs dispatch holds vs capex approvals will differ.
• Reminder cadence: early reminder + near-SLA reminder (avoid spam).
• Escalation path: approver → supervisor → director visibility.
• Outcome capture: approved / rejected / sent back with remark.

Audit logs: what to capture (and what not to)

Audit logs are not “last updated”. They are a structured history of who changed what, when, and why. Capture these fields at minimum:

• Actor: user id, role, department
• Action: created / edited / submitted / approved / rejected / reverted
• Object: type + id (e.g., PO#1029, DiscountReq#88)
• Change set: old → new values for key fields
• Reason/remark: mandatory for overrides and deviations
• Timestamp: with optional IP/source module

Avoid noisy logging (every keystroke or full row snapshots). Audit must be searchable and usable for investigation.

Sample rules you can adopt quickly

Below are real-world patterns we implement (thresholds are illustrative; tune to your scale):

• Purchase Order: ≤50k Procurement Manager • 50k–2L Procurement Head + Finance • 2L+ Director
• Deviation rule: price >10% above last purchase price triggers Finance Controller approval
• New vendor: mandatory compliance approval before PO release
• Discount: ≤5% Sales Manager • 5–12% Sales Head + Finance (margin snapshot) • 12%+ Director
• Expenses: missing bill → auto send-back (cannot approve)
• Dispatch release: overdue customer triggers finance hold and approval-based release

Turn approvals into MIS (where leakage becomes visible)

Once approvals + escalations + audit trail are running, you can finally build dashboards that leaders use:

• Average approval time by module and department
• Top “stuck approvers” (SLA breaches)
• Override hotspots: discount overrides, PO deviations, dispatch releases on overdue
• Deviation reasons trend: breakdown, urgency, price increase, shortage

This directly connects to how we design MIS dashboards that drive action and why a phased rollout reduces friction (module-wise ERP rollout plan).

Implementation plan (controls first, then automation)

We recommend this rollout so adoption stays high:

• Step 1: control mapping workshop (objects + triggers + roles + evidence)
• Step 2: matrix sign-off + SOP alignment
• Step 3: workflow engine setup (routing + delegation + parallel approvals)
• Step 4: SLA + escalations + notifications
• Step 5: audit log taxonomy + searchable trails
• Step 6: MIS layer for leakage visibility + continuous tuning