As your business grows, it becomes more and more difficult to control the compliance with discount rules, credit limits and customer balances, in the case of purchasing products or services. In SAP Business One ERP, you can configure approval procedures in order for the system to automatically check all data and rules and restrict users accordingly.
What is an approval process?
The approval process is a standard work procedure involving the consent of a manager or a superior before the user can generate different documents such as purchase orders, discounts, etc. SAP Business One includes approval templates in which you can define:
- Users whose documents need approval (originator)
- Levels of approval and users who can approve documents
- Documents that are part of the approval
- Conditions for triggering approval
Think of the following case:
“Until December 2017, all sales agents introduced in their ERP system sales orders based on personalized offers. Some of those orders had very low sales margins and the company management wants to activate an approval flow so that all sales orders that have at least one product with a margin of less than 5% will require approval by the sales manager.
The process of approving a sales order begins when a user (sales agent) wants to add a customer order. If the product margin is below 5%, the user will receive a warning message indicating that the document needs to be approved.
The sales order will be saved as drafts and the sales manager will receive a notification that a sales order needs approval. The Sales Manager checks the order in SAP Business One or SAP Business One Mobile (Android or iOS) and either approves or rejects it.
The user who generated the document will also receive a notification in the system and in case of approval, he can open the temporary sale order and add it to the system, entering in the standard sales process.
If the sales order is rejected, the user who generated the document may either change it so that the margin is over 5% or cancel it.
The Sales Manager can run reports to see the status of all approval requests, based on different parameters.
Approval streams can be defined on predefined templates (credit limit, amounts, margins) or can be configured as required using an SQL script.
You can set up a multi-level approval, for example:
- Purchase orders below 5000€ do not require approval
- Purchase orders between 5001€ and 10,000 € require approval from at least one of the two procurement managers
- Orders over 10,000€ require a 2-stage approval process (cascading): approval from at least one of the procurement managers and approval from the general manager.
Other examples of approvals:
- Approval from the purchaser when the manager introduces a NIR, which has a higher entry price than the one negotiated in the purchase order.
- Approval from the manager for issuing sales orders to clients (or excluding certain clients) who have exceeded their credit limit
- Approval from the manager for registering sales orders to customers (or excluding certain clients) that have exceeded their maturity by 10 days
- Approval from the manager if manual consumption vouchers (other than those from production) are introduced.
Similar to notifications that users receive in the approval process, they also can receive various alerts within the SAP Business One application or by e-mails, when certain conditions are met. You will find some standard alerts that can be triggered, such as deviation from a certain set margin, from the budget or credit limit, reducing the stock below the minimum. By using SQL queries, these alerts can be expanded as needed: commodities with stock available, payday invoices in the current day, invoices that have been collected, etc.
SAP Business One approval and alerting procedures are an effective tool for a real-time document tracking by setting up verification criteria with different degrees of complexity. This advanced feature improves communication between departments, simplifies the internal flow, reduces the number of errors and situations that need to be avoided and it increases productivity while having a more effective control over everything that ultimately influences profits.
Author: Irina Oprea, Managing Partner, System Innovation Romania