Is your approval process as effective as you think? Here are some tips to improve it

Jul 21, 2020

When it comes to financial transaction approvals, more is better, right? Not necessarily.

When we have a “close call,” such as an invoice approval when there was no budget authority, we often hope we can avoid future problems by putting “one more set of eyes” on the situation.

Over time, the number of signature lines grows. So how many approvals do you actually need?

It starts with asking one question

It sounds simple, but just asking each approver, “When this form comes to you, what do you do?” can tell you a lot.

  • Person A: “When I get this form, I pull up my records and compare X to Y.” That is great to hear! This person is using their knowledge of the transaction to verify the details. This is probably one to keep.
  • Person B: “I only review it for this one thing” (like the account code). This person isn't involved in the transaction but knows something important. These can be tricky. Does another approver also understand account coding? Can another approver be trained to quickly find the information and make an accurate decision? Or is a separate approval the best and only way to accomplish this important task?
  • Person C: “I don't really know why I see these forms. It has always been this way, so I just sign them and move them on.” Clearly, this approval isn't adding value and is easy to remove.
  • Person D: “When I get the form, I look at these three details and record them in another system. That is, they aren't giving an approval but rather need some information from the document. This is a good opportunity to eliminate an approval, but only when you have found a way to get Person D the information they need to do their job.

There are other scenarios, too. The person who explains that they give pre-approval as well and would rather not see the same transaction twice. Or the person who says they see it “just because they like to keep an eye on everything that is happening.”

The only way to understand what a person is truly doing when they sign the form is to ask them. Besides, a sure way to create turmoil in your organization is to remove people from any process without talking with them first.

Why isn't more better?

When there are many approvers, some might assume the others have done the detailed review. If everyone makes this assumption, then no one performs a detailed review. From a process improvement perspective, clarifying roles and responsibilities – who is responsible for what aspects – makes it evident which approvals add value and which are excessive.

The more approvals there are, the more time the form sits on desks. This means someone is waiting – waiting for their money, for their permit, for their purchase or their permission to take action.

Are electronic approvals more effective?

Because of the COVID-19 pandemic and the push to work remotely, many local governments are looking to establish some kind of electronic approval procedure. We recently shared a post to help you with that transition. Before you automate a process, you should always evaluate your manual process for steps that don't add value and perpetuate waste, in this case – waiting. If you are considering an electronic process to collect and document approvals, this is a great opportunity to review which approvals are valuable – and create new ways to get other people the summary information they need.

A process change is an opportunity to improve. In process improvement work, there is an old adage: don't automate waste!

Want our help?

We want to help you do better – better service, more accurate, faster, with less frustration – and our services come at no charge to you. The Center for Government Innovation provides technical assistance and process improvement facilitation to any local government in Washington. Because we specialize in working with local governments, we can tailor our services to fit your needs.