Guide
How to Design an Approval Matrix
By Keelstar Team · Updated June 1, 2026
The short answer
Document approval thresholds by dollar amount, cost center, and vendor category; assign named roles not just individuals; enforce segregation of duties; and version the matrix when org structure changes. An approval matrix that lives only in AP's head breaks the first time someone is on PTO or an auditor asks for the written policy.
Why a written matrix matters
Without a matrix, approvers are chosen by whoever is available in email. That breaks segregation of duties, creates inconsistent treatment of similar invoices, and fails SOX-style audits. A written matrix is the control document AP implements in software.
Dimensions to route on
Amount is the primary axis. Add department or cost center so spend is approved by someone who owns the budget. Vendor category matters for capital vs expense, IT vs facilities, and preferred vendor programs.
- Under $1,000: department manager
- $1,000–$10,000: director plus budget owner
- Over $10,000: VP or CFO per policy
- New vendor or non-PO invoice: additional procurement review
Segregation of duties in the matrix
The person who can add or change vendor bank details should not be the sole approver of that vendor's invoices. The person who submits a expense should not approve it. Encode these rules explicitly — auditors map duties to people.
Exceptions and delegation
Document how PTO delegation works: acting approver, date range, same threshold limits. Out-of-office auto-forward in email is not delegation — it is unaudited routing. Matrix exceptions for emergencies need a named override role and post-hoc review.
Maintain and version the matrix
Review quarterly and after reorgs. Store version history — auditors ask which matrix was in effect when an invoice was approved in Q2. AP should not guess; the system should apply the matrix version active on invoice date or receipt date per your policy.
Frequently asked questions
- Should approvers be people or roles?
- Define roles — department manager, site director, CFO — and map people to roles. Individuals change; the matrix should not require a rewrite every reorg.
- How many approval tiers do we need?
- Most mid-market companies use two to four tiers by amount. Too many tiers slow payments; too few weaken control on large spend.
Related guides
Put this into a monitored workflow
Invoice Approval handles this continuously — with reminders and an audit trail.