Maconomy Reference Guide

Approval Section

Use this section to learn about Approval workspaces.

Introduction to Approval Hierarchies

In a company, you often need to be able to manage the approval of vendor invoices or expense sheets before making payments.

An example could be that if an employee wants to purchase a service, the employee's supervisor must approve the purchase order before it can be assigned to a vendor invoice by the bookkeeping department.

In certain cases, it might also be necessary for more than one person to approve an expense sheet, a purchase order, or the allocation lines of a vendor invoice. An example could be that you want expenses that exceed a certain amount to be approved by the supervisor of the employee who enters the expense, as well as by the department manager. Another example could be that expenses that are related to a certain job are always to be approved by the job's project manager and by the supervisor of the employee who entered the expense.

Approval is of crucial importance to the processing of expense sheets, purchase orders, and vendor invoices. You can only print and assign a purchase order to a vendor invoice when the purchase order has been fully approved. In addition, only approved purchase orders are included in the financial commitment accounts.

For expense sheets that use approval by approval hierarchies, this approval overrules the approval of a supervisor. This means that if you specify for a job that the supervisor must approve expense sheets, you can only post an expense (and settle it) when it has been fully approved by all of the people in the relevant approval hierarchy. If approval by the project manager for a given job is also required, the project manager must also approve the current line of an expense sheet before you can post it. The project manager's approval is performed without the use of approval hierarchies.

The approval principles are described in more detail in the Jobs workspace in the Job Cost module.

In Maconomy, the need for a specific approval procedure is handled by approval hierarchies. An approval hierarchy is a set of rules that determine who can approve the following, based on assigned allocation lines that match certain conditions: expense sheet, purchase order, vendor invoice, draft invoice, job budget, time sheet, vendor, company vendor, customer, company customer, employee, and user information.

An approval hierarchy applies to allocation lines of the items listed above. Because the functionality is identical for these types of approval hierarchies, the term "expense sheet" is used for the types of entries in the following description.

An approval hierarchy is a number of lines in the Approval Hierarchies workspace. For each line you specify a selection criterion and a person. This means that the person who is specified on the line in question must approve an expense sheet that matches the selection criterion specification on a given line. An expense sheet can match several selection criterion specifications in the same approval hierarchy. If that is the case, all respective persons must approve the expense sheet before it is considered to be fully approved.

The selection criterion specification on an approval hierarchy line is a predefined selection criterion specification that you create in the Selection Criterion Specification workspace. The person who is to approve expense sheets that match the current selection criterion specification is either a specific employee or a reference to an employee who is assigned a certain function. The reference might be, for example, the supervisor of the person who submits the expense sheet or the project manager on the job to which the current expense sheet is assigned.

The following example illustrates a simple approval hierarchy. The selection criterion specifications in the example are named according to the expense sheets that they contain. See the description of the Selection Criterion Specification workspace for more information about how to set up selection criterion specifications:

Selection Criterion Specification Approver Approver Reference

Amount <= 1,000

Submitter

Amount > 1,000

Submitter's supervisor

Amount > 10,000

1044

When an expense sheet amounts to USD 1,000 or less, only the person who submits it must approve it. The submitter's supervisor must approve any expense sheets that amount to more than USD 1,000. Employee no. 1044 and the submitter's supervisor must always approve amounts of more than USD 10,000 (no matter who submitted the expense sheet), because the expense sheet also matches the selection criterion specification on line 2.

For each approval hierarchy you can specify whether the approval of expense sheets that are to be approved by several persons (that is, the expense sheet matches more than one line in an approval hierarchy) is to be made in a certain order or if the approval is to be performed in any order. By specifying that approval is to be performed in a certain order, for example, you ensure that approval is always begun at the lower level in the organization before escalating to the higher levels in the organization.

If you use approval hierarchies, all expense sheets must be approved by means of an approval hierarchy; thus, an approval hierarchy line that consists of the submitted expense sheets must always be found. Expense sheets that do not match any of the selection criterion specifications in an approval hierarchy cannot be submitted because Maconomy issues an error message when submission is attempted.

The approval procedure can often vary among the companies in a multi-company model. For example, there might be a more restrictive need for approvals in one company than in another, or some companies might have different approval functions to be supported by the approval hierarchies.

An example could be that one company in the organization wants expense sheets to be approved by several persons, depending on the size of the amount, whereas another company always wants the manager of the company to approve expense sheets regardless of the size of the amount.

In Maconomy, you can handle this in the Approval Hierarchies workspace by creating separate approval hierarchies for the different approval procedures to be used.

In the Approval Hierarchy Selection workspace you can specify a range of conditions that determine when an approval hierarchy is to be used. In the Approval Hierarchy Selection workspace you can then specify a specific set of rules to be applied to approval hierarchies for purchase orders, a specific set of rules to be applied to approval hierarchies for expense sheets, and a specific set of rules to be applied to approval hierarchies for vendor invoices and assigned allocation lines. If you create one or more lines in the Approval Hierarchy Selection Lines sub-tab for each of these hierarchy selection types, all purchase orders, expense sheets, and vendor invoices must be approved via an approval hierarchy. If you do not define any hierarchy selection lines, no approval hierarchies are used for the current type of transaction, and the approval must be performed based on a procedure that is specific to purchase orders, expense sheets, or vendor invoices. For more information about approvals without using approval hierarchies see "Other Approval Procedures."

A set of rules consists of a number of lines in the Approval Hierarchy Selection Lines sub-tab of the Approval Hierarchy Selection workspace. For each line, you provide a selection criterion specification and an approval hierarchy; this means that an expense sheet that matches the selection criterion specification on a given line must be approved through the approval hierarchy that is specified on the current line. The selection criterion specification here is also a selection criterion specification that you created in the Selection Criterion Specification workspace. The approval hierarchy is a hierarchy that you created in the Approval Hierarchies workspace.

When you submit an expense sheet, Maconomy first checks which selection criterion specification in the Approval Hierarchy Selection workspace the current expense sheet matches. Next, Maconomy determines the holders of approval in the approval hierarchy specified for the selection criterion specification in question.

If an expense sheet matches several selection criterion specifications in the Approval Hierarchy Selection workspace, Maconomy uses the hierarchy that you defined for the selection criterion specification in the upper line of the sub-tab. If the approval hierarchy selection consists of several selection criterion specifications that can include the same expense sheets, you should put the most specific selection criterion specifications in the upper lines of the sub-tab, followed by selection criterion specifications that have more broad criteria. This enables you set up a process where an expense sheet flows through the most narrow selection criterion specifications until it reaches a selection criterion specification that it matches.

Using approval hierarchies requires that all expense sheets are approved by means of an approval hierarchy; as a result, Maconomy must always find an approval hierarchy selection line that consists of the submitted expense sheet. Expense sheets that you do not put within any of the selection criterion specifications in an approval hierarchy cannot be submitted because Maconomy issues an error message when expense sheet users try to submit them.

One way to ensure that all expense sheets can be submitted is to put a line that contains a selection criterion specification that covers all expense sheets in the lower part of the Approval Hierarchy Selection Lines sub-tab, and select an approval hierarchy for expense sheets that do not match the conditions of any of the selection criterion specifications that you entered in the upper part of the sub-tab.

The following example illustrates how Maconomy selects the relevant approval hierarchy via the Approval Hierarchy Selection workspace. As in the previous example, the selection criterion specifications are named according to the expense sheets that they contain. See the description of the Selection Criterion Specification workspace for more information about the setup of selection criterion specifications.

In the Approval Hierarchy Selection workspace, you create the following lines in the set of rules for expense sheets:

Line No. Selection Criterion Specification Approval Hierarchy

1

Expense sheets assigned to company no. 1 and job no. 1050

AH3

2

Expense sheets assigned to company no. 1

AH2

3

Expense sheets assigned to company no. 2

AH1

Employees create and submit the following expense sheets:

Expense sheet No. Company No. Job No.

2100

2

2486

1100

1

1050

1101

1

1091

Because it applies from expense sheet no. 2100, this expense sheet matches the selection criterion specification on line 3 in the approval hierarchy selection. This means that this expense sheet is approved by means of approval hierarchy AH1.

Due to its company and job specification, expense sheet no. 1100 matches the selection criterion specification on line 1; however, because the selection criterion specification on line 2 only contains the condition that the expense sheet must be assigned to company no. 1, this expense sheet also matches that selection criterion specification. Maconomy thus selects the upper of these lines, which means that expense sheet no. 1100 is to be approved by means of approval hierarchy AH3.

Finally, expense sheet no. 1101 matches the selection criterion specification on line 2 in the approval hierarchy selection and is therefore to be approved by means of approval hierarchy AH2.

When someone submits an expense sheet, Maconomy checks which approval hierarchy is to be used to determine the persons who must approve that expense sheet. In this hierarchy, Maconomy then finds the lines whose selection criterion specification is matched by the expense sheet and creates an approval line.

Maconomy then transfers the number of the employee who is specified as the approver on the hierarchy line that resulted in the approval line to each approval line. You can identify the approver by either a specific employee number or a given reference. Thus, Maconomy can, for example, use the employee number of the project manager of the job to which the expense sheet is assigned.

An approval line thus corresponds to a person (or personal function) who is to decide on the approval of the expense sheet. If approval is to be performed in a certain order in the current approval hierarchy, Maconomy ensures that if one or more persons (or functions) must approve an expense sheet before you are supposed to, you cannot make your decision on the expense sheet until the persons (or functions) who precede you in the approval order have completed their approval/denial task.

The Approval sub-tab of the Approvals workspace displays a listing of a number of approval lines that you should make a decision on. You can choose whether Maconomy displays only the approval lines that you should approve. You can then select each of these lines as approved, released, or rejected.

If you reject an approval line for an expense sheet, Maconomy rejects the entire expense sheet, regardless of whether other employees approved other approval lines for the same expense sheet. The release of a line corresponds to neither approving nor rejecting the expense sheet, but letting approval be made by another approver in the hierarchy. This means that Maconomy only sees the line as approved if another employee approved any other approval line that is related to the same expense sheet. Among other things, the rejection of a purchase order means that you cannot print it or assign it to a vendor invoice. The consequences of rejecting a vendor invoice or an expense sheet can be that the invoice or the sheet cannot be posted, depending on the approval principle selected for supervisors' and project managers' approval of the job in question in the Jobs workspace. See the description of the fields in the Approval island for more information about the consequences of the approval principles.

When you have appropriately identified all of the approval lines in the Approval Hierarchy Selection Lines sub-tab, you use the Carry out Approval action. Maconomy then changes the approval status of those lines.

When all approval lines for an expense sheet have been approved, or when at least one line has been approved and the remaining lines have been released, the expense sheet is fully approved. At least one person is always to either approve or reject the current expense sheet, which means that if all other approval lines for an expense sheet have been released, the last line must be approved or rejected.

In the Approvals workspace you can also see approval lines that are to be approved by other employees (to the extent that you have been granted access in Maconomy's Access Control System). However, you cannot approve, release, or reject these lines because only the employee who is responsible for the approval of the respective lines can do that. A listing of the approval lines to be approved by other employees does, however, enable you to see how far an expense sheet has gone in the approval procedure.

You can approve expense sheets one by one using the Action menu in the Expense Sheets workspace. Approving, releasing, or rejecting an expense sheet in the Expense Sheets workspace corresponds to approving, releasing, or rejecting an approval line on which you are specified as an approver in the Approvals workspace. In the Expense Sheets workspace, Maconomy also checks that the order in which the approval is performed complies with the rules of the hierarchy in question.

You can approve vendor invoices and invoice allocation lines using the Action menu in the Vendor Invoices, Invoice Allocation, and Reallocate Invoices workspaces, based on the functionality that corresponds to that of expense sheets. This functionality also applies to purchase orders, which you can approve in the Purchase Orders workspace in the A/P module.

You can choose whether or not you want to use the approval hierarchy functionality. You can choose to use approval hierarchies for only purchase orders, or expense sheets, or vendor invoices; both purchase orders, expense sheets; and vendor invoices; or none of these.

Even if you do not use approval hierarchies, each purchase order, expense sheet, and vendor invoice must go through an approval procedure that is specific to purchase orders, expense sheets, vendor invoices, and allocation lines, respectively.

When someone submits a purchase order, an employee must approve it in the Purchase Orders workspace. Any employee can perform this approval can be performed, because the only condition for approving purchase orders (when you do not use approval hierarchies) is that the current user has been granted access to approving purchase orders. You grant this access in the Actions workspace.

When someone submits a vendor invoice, an employee must approve it in the Vendor Invoices workspace. Any employee can perform this approval, because the only condition for approving vendor invoices that does not have allocation lines (when you do not use approval hierarchies) is that the current user has been granted access to approving purchase orders. You grant this access in the Actions workspace. If you create allocation lines for a vendor invoice, you must also submit and get approval for the allocation, a procedure that also applies to the reallocation of vendor invoices. You can submit and get approval for allocations and reallocations in the Invoice Allocation and Reallocate Invoices workspaces, respectively.

When you do not use approval hierarchies for expense sheets, the approval by supervisor must be performed by means of the Approve action in the Expense Sheets workspace. The setup of a job determines whether approval by supervisor is necessary or allowed, just as the setup of the job determines whether expense sheet lines are to be approved in the Approve Expense Sheet Lines workspace. See the description of the Approval island in the Jobs workspace for more information about the approval of expense sheets when you do not use approval hierarchies.