12.3 Purchase Approval Routing

What this section covers

Employees can ask the company to buy something by entering a purchase request. NetSuite will not turn that request into a purchase order accounting can process until the approval rules are satisfied. This section is the standard, out-of-the-box path: the Purchase Requests feature, the Approval Routing feature, the limit and approver fields on the employee record, and approval in the Employee Center.

Two neighboring topics are outside this exam. Purchase requisitions, including the requisition approval workflow in Advanced Procurement, are out of scope. Custom approval routing, including SuiteFlow workflows you design yourself, is also out of scope. Help lists Approval Routing as the basic method, standard SuiteFlow workflows as a SuiteApp option, and customized SuiteFlow workflows as the most flexible option. Study the basic purchase-request process here. Do not answer these questions with requisition states or with a custom workflow you would build in SuiteFlow.

Approval settings apply to everyone in the company, whichever method is in use. That company-wide rule is the only point to take from the other methods.

The controls you set before anyone submits a request

An administrator enables purchase requests at Setup > Company > Enable Features by checking both Purchase Orders and Purchase Requests. Purchase requests must be approved before they are turned into purchase orders.

Approval Routing is the feature that builds a hierarchy of supervisors and approvers for purchase and expense transactions. For the purchase process, Help tells you to keep purchase approvals on this standard feature rather than switching purchase orders over to a custom workflow. Expense approvals are not changed by that purchase-order preference. The exam scope here is purchases.

Each employee record holds the fields that decide whether a request stops for approval:

• Supervisor is the employee's direct supervisor.
• Purchase Limit is the amount the employee can purchase without supervisor or approver approval. Help also describes it as the highest transaction amount the employee can enter without additional approval.
• Purchase Approver is the person who approves that employee's purchase requests. If no approver is selected, the supervisor approves them. If a purchase approver is selected, the supervisor is no longer part of the approval hierarchy.
• Purchase Approval Limit is the maximum amount that person can approve on a purchase request when named as someone else's approver. It is not the same number as their own purchase limit.

Supervisors can be emailed when requests are waiting. Only an administrator can turn that on. Go to Setup > Accounting > Preferences > Accounting Preferences, open the Time & Expenses subtab, and check Automatically Notify Supervisor. Employees then cause an email to their supervisors when they submit purchase requests. That preference sends a message. It does not add a waiting period, and it does not choose a different approver than the employee record already names.

The person who approves must use the Employee Center. An administrator adds the Employee Center role on the employee record. In the Employee Center, open Approve Purchase Requests, select the employee who submitted the request, check the request, and save. In a OneWorld account, a supervisor or approver in the Employee Center sees purchase requests, expense reports, and requisitions for employees in all subsidiaries. Role subsidiary restrictions that apply to other records do not apply to those approvals.

If the company does not use Approval Routing, the request becomes a purchase order as soon as the immediate supervisor approves it. With Approval Routing, the request is not processed until an authorized supervisor or approver covers the amount.

When approval is required

Compare the request with the employee's purchase limit.

A request below the purchase limit is automatically approved. The purchase limit is the highest amount that does not need additional approval, so a request equal to that limit is still inside the amount the employee may enter without another person. A request over the limit follows the approval routing process. It goes to a supervisor or approver whose approval limit is high enough.

The purchase approver, or the supervisor if no purchase approver is set, must have a purchase approval limit greater than or equal to the request. If the amount is greater than that person's purchase approval limit, the request is sent to the next level of management. The chain continues until an authorized supervisor or approver approves it.

Read a purchase limit of zero with that same comparison. Zero means the highest amount that skips approval is zero. It does not approve every later request, and it does not cancel a purchase approver who is set on the employee. A request above the limit still routes.

An example with three amounts

Mara's purchase limit is $1,000. Her purchase approver is Luis, whose purchase approval limit is $1,500. These figures are an example of the Help rules, not default values stored by NetSuite.

• A $800 request is below Mara's $1,000 purchase limit, so it is automatically approved.
• A $1,400 request is over Mara's purchase limit, so it routes. A purchase approver is set, so the supervisor is not in the hierarchy. Luis can approve $1,400 because his $1,500 purchase approval limit is greater than the request.
• A $1,800 request is over Luis's purchase approval limit, so it goes to the next level of management until someone whose purchase approval limit covers $1,800 approves it.

If Mara had no purchase approver, the $1,400 request would go to her supervisor instead, and that supervisor would still need a purchase approval limit that covers $1,400. If she has no supervisor either, the request is still not a receipt. Transactions > Purchases > Receive Orders records item receipts against purchase orders. It does not approve a purchase request or convert an unrouted request into a purchase order.

Rejection, editing, and resubmission

When a supervisor rejects a purchase request, the employee who entered it receives a rejection email. In the Purchase Order Register, the status changes from Unapproved to Rejected. Accounting cannot process a rejected purchase request. The October 2024 foundation sample is that the rejected request can still be edited and resubmitted for approval. That matches the register behavior: rejection stops processing, and it does not delete the request. The employee corrects it and sends it through approval again.

Help's purchase-order status list uses Pending Supervisor Approval for a purchase request that has not been approved, and Rejected By Supervisor for a purchase request that has been declined. Pending Supervisor Approval is the waiting state. Unapproved is the register label Help uses before the status becomes Rejected.

Editing follows the purchase-order rule, because a purchase request is carried on that order until it is approved. Help says you can change a saved, approved, or unapproved purchase order. If the order has already been approved, you must recall it before you can edit it. An approved request is therefore not sealed forever. Recall comes first, and then the change can be made. A rejected or otherwise unapproved request does not need that recall step.

After approval, later purchase-order statuses such as Pending Receipt describe receiving and billing. They are no longer the approval decision. Do not use requisition statuses, or a custom workflow's Pending Approval buttons, to answer a question about this standard purchase-request path.