Overview: Approval Processing

Automating an approval cycle in PowerShift is a simple process that could save you time and money. It replaces the time-consuming sign-off process in which a paper document is circulated through several different departments. It ensures review cycles are followed based on criteria you determine, enabling you to exercise more control over the purchasing, sales, invoicing and manufacturing functions.

You can set up approval cycles for sales orders, credit memos (issued from RE), sales order shipments (before they can be invoiced), purchase orders, AP invoices, bills of material and engineering change orders (ECOs). The approval process for purchased items might include signoffs from the buyer, purchasing manager, or others (e.g., a safety board if the item is considered a hazardous material). Bills of material can be set up to require approval before work on manufacturing orders can proceed. Sales orders may require approval by customer service reps (to verify pricing, commissions, etc.), accounting, or other departments.

Implementing approval cycles can result in a smoother operating enterprise, mitigating potential risks, with work continuing seamlessly and without interruption.

This topic has these subtopics:

Hierarchy Setup
Approval Setup
Approving Transactions
Substituting Approvers
Approval Inquiries
Mobile App

Hierarchy Setup

A hierarchy is established indicating the classification of customers or vendors, and items which require approval. The levels in the approval hierarchy may be flagged to "always process" – in which case the approval test is always done at this level, even if a match was found in a lower level of the hierarchy. Approval hierarchies are defined in Approval Hierarchy Maintenance (APPHM).

Classifications include:

Item

Customer

Vendor
All All All
ABC class Customer price class Buyer
ECO signoff Customer Vendor

Product end-of-life

 Customer type Vendor type
Hazardous material    
Item    
Item price class    
Item status    
Not manufacturer approved    
Non-stock    
Non-compliant    
Not QA approved    
Over standard cost    
Product class    
Product subclass    

Not all classifications are applicable for all approval types. When establishing hierarchies, Approval Hierarchy Maintenance displays only the valid classification types and applicable criteria based on the type of approval.

Approval Setup

Once a hierarchy is defined, specific rules need to be set up for the approval process. Approval rules are set up in Approval Maintenance (APPM).

Up to 5 approvers (specified by user ID, with alternates for each) can be specified for each hierarchy level. Approvals can be dependent or independent, and you can also set up override users (i.e., a manager or company officer) for any approval requirement.

Changes to the hierarchy or approval setup only impacts new orders, invoices or bills of material. A standalone program can be run in some cases to add open orders to the approval cycle. If an approver or alternate needs to be replaced, Approval Substitution (APRS) can be used to replace the approver on transactions that are pending approval.

Purchase Orders

Approvals can be based on a dollar amount by line. There can be different dollar amounts specified for different signoffs (e.g., one limit for the buyer, another for the purchasing manager). If the criteria is one that doesn’t have a dollar limit (e.g., QA approval), the dollar amount should be left at 0. Once an order has been approved, if changes are made to it and there is a dollar limit specified, a variance (percent) can be established. If the changes are within the original amount plus the variance, no new approvals are required.

When a purchase order line entry is completed, approvals are checked. If all lines of a PO that require approval are approved, the PO is approved. If the PO is not approved, it is not sent to the document print queue. If an unapproved PO is manually printed, "not approved" prints at the top of the document. If a PO that is not approved is sent to a vendor, it can be received to stock and invoiced.

If a vendor item is changed to be QA approved or compliant, any POs that are pending approval are re-evaluated and possibly removed from the approval cycle. If a PO is removed and no other approvals are required (i.e., no other approval criteria established for the PO), it is processed to the document queue or immediately printed/sent to the vendor.

However, if you change an item’s status from QA-approved or compliant to non-approved or not complaint, no action is taken on existing POs already entered. The change in status applies only to new POs as it is assumed existing POs have already been sent to vendors.

Note
Adding a line to an approved PO after something has been received against it does not trigger a new approval.

AP Invoices

AP invoice approvals can be set up for all vendors or for a specific vendors or vendor type. They are based on dollar amounts, with potentially different values specified for different signoffs. Invoices must be approved before they can be processed in the Vendor Payments (NC) program.

Sales Orders

When a sales order is completed, approvals are checked. If all lines of a sales order requiring approval are approved, the order is approved.   In PowerShift, material can still be obligated (i.e., reserved) for the order, but a shipment cannot be created for a sales order that is not approved (and therefore it cannot be confirmed in Sales Shipment Confirmation (OC).   

If a shipment has been created, but the order is not approved (i.e., changes were made to the order), Sales Shipment Confirmation will not allow the shipment to be confirmed and no further shipments can be created for the order.

If an order is not approved, the system not prevent printing of internal documents, such as a pick ticket, or customer documents such as an order acknowledgement, but the documents will state that the order has not been approved. The packing list will not be printed because a shipment cannot be confirmed for an unapproved order.

Similar rules regarding changes and application to existing orders v. new orders are the same as for purchase orders. For example, if you change an item’s product class that causes a sales order to require approval, it is not automatically added to the cycle; i.e., the product class change applies only to newly-entered orders for the item.

Bills of Material

When a new bill of material is created, the approval status check is performed. If the item/ ECL requires approval, based on the hierarchy, the "unapproved" status is updated to the BOM header.

Manufacturing orders for an item/ECL whose bill is pending approval can be released (whether through requisitions, the MPR/MRR process, a sales order, or manually by Manufacturing Order Maintenance). You can opt for the system to send an email notification when a manufacturing order for an unapproved BOM is released. While unapproved orders can be released, shop paper will not be automatically printed, components cannot be picked and you cannot record labor against the order until the bill is approved. If unapproved shop paper is manually printed, "not approved" prints at the top of the document.

Another approval check is done at the time of receiving. If the manufacturing order has already been picked, it may be blocked from being received until the bill and order have been approved again. Whether or not the order can be received is based on the Stop mfg receipt for unapproved bills manufacturing system option.

Bill of material changes that trigger approval checking include:

  • Components added (manually or through a bill merge)

  • Components deleted

  • Changes to quantity per

  • Changes to substitution items

  • Changes to effective dates

If changes are made to a bill without creating a new ECL, the bill must be approved again. Keeping approval at the bill of material level applies to all manufacturing orders automatically and there is no need to review open orders.

Sales Shipments

When a shipment is confirmed, the approvals for sales shipments are reviewed. The packing slip will not print automatically if the shipment is not approved as it cannot be confirmed until it is approved.

Credit Memos

Approvals checking can occur when a credit memo is confirmed in One-Step Invoice Entry (RE). Approvals for credit memos are based on dollar amounts, with potentially different values specified for different signoffs. Credit memos must be approved before they can be selected for AR invoicing.

Sales Invoices

When a shipment is confirmed, approvals for invoices are checked. Approvals for invoices are based on dollar amounts, with potentially different values specified for different signoffs. Invoices must be approved prior to invoicing in the AR Invoice Register (RR).

Engineering Change Orders (ECOs)

There are two levels of types of approvals that can be set up for ECOs: one is for changes to approve the ECO itself; the other is to sign off that the ECO has been implemented.

Approving Transactions

When transaction requires approval, the Approval button on the bottom right hand side of all PowerShift menus becomes active for a user assigned as the approver, alternate or manager; approvers are also alerted via the mobile app and can approve transactions with a simple click.

Substituting Approvers

If someone will be unavailable for a length of time and using the manager’s override isn't appropriate in all cases, Approval Substitution (APRS) can be used to change an approver from one user ID to another. You can limit approver substitution to a specific approval type (e.g., purchase orders) or a range of order/ECO numbers. Or, if the original approver is expected back at some point, you can limit the substitution to orders due by a specified date.

Approval Inquiries

If approvals are active, an approval button in the associated maintenance and inquiry programs (e.g., Sales Order Maintenance and Sales Order Inquiry) enables you to view the current approval status. Additionally, a number of inquiries display approval information, including:

Mobile App

The mobile app enables you to approve or not approve transactions from a mobile device, sending a notification when an approval is pending. See Approval Signoff.