A vendor gets paid twice. A wire goes out to a contractor the owner hasn't vetted yet. A supply order clears the day before payroll. Do any of these scenarios sound familiar?
If they do, you're in good company. These situations tend to become more common as payment responsibilities spread across a growing team. In most cases, nobody was trying to do the wrong thing. The payment simply moved before the right person had a chance to review it.
If you've ever handed off payment tasks to a bookkeeper or office manager, you may not have put a formal approval process in place alongside it. Most businesses don't.
In this article, we'll walk through a few signs that your business may have outgrown an informal sign-off process, and how to establish a payment approval workflow.
The real risk isn't fraud—it's delegation without structure
The scenarios that cause the most headaches usually don't involve bad actors. They involve people doing their jobs the way they understood their jobs to be, without anyone in the loop who could have caught the issue before money moved.
A few examples that show up again and again include:
A junior bookkeeper who sends a payment to an outdated vendor account because nothing in the process required a second set of eyes
Two people processing the same invoice because each assumed the other hadn't done it yet
A $12,000 materials order going out before a scope change was confirmed
The pattern in each of these is the same. Access was granted, but no approval layer came with it. The person initiating the payment was following the process as they understood it. The issue was that no review step existed before the payment was sent.
Signs your business may have outgrown informal sign-off
"Just text me before you send anything big" works when there's one person and one account involved. It typically stops working so well beyond that point.
Here are some signals that your current system may be creating more exposure than you realize:
More than one person on your team can initiate payments
Payment amounts vary, or some are high enough that a mistake would genuinely hurt
Your current approval process is a text thread or a verbal "sounds good"
You've had to ask a vendor to reverse a payment at least once
Your team operates across time zones or different schedules, so payments sometimes clear while you're offline
Most businesses hit this tipping point when the team grows past the stage where the owner can personally review everything in real time, but the stakes are still high enough that mistakes are costly. If that sounds familiar, an informal system is probably working against you.
What a payment approval workflow actually looks like
The core mechanic is straightforward. You create a rule that holds certain payments before they send. The designated approver reviews the payment and decides whether it should move forward.
For example, an owner might require approval for any wire payment over $2,500 sent to a new vendor. Routine payments continue as normal, while higher-risk transactions get an extra review before money leaves the account.
What makes a good setup is how specific those rules can get. A basic dollar threshold is a start, but it only catches so much. A $500 ACH to a vendor you've paid 50 times is different from a $500 wire to someone new. A payment initiated by a long-tenured office manager carries different risk than one initiated by someone who started last month.
Here are the conditions that matter beyond dollar amount:
Vendor or payee: Flag payments to new or high-risk vendors regardless of amount.
Who initiated it: Route payments from certain team members for review before they process.
Payment type: Apply stricter rules to wires than to recurring ACH transfers.
There's also the question of who can approve payments. A well-built system won't let the person who initiated a payment be the one who approves it. For accounting firms managing client accounts, that's often a compliance requirement. For any business that wants a clean record of who authorized what, it's good practice.
What to look for when setting one up
If you're evaluating whether to put a payment approval workflow in place, here's what to look for.
Conditions beyond dollar amount
Approval rules should let you filter by vendor, initiator, and payment type, not just a threshold. A flat dollar limit won't catch the scenarios that actually create problems.
Coverage across all outgoing payments
Some tools only apply approval rules to bill payments. Make sure any setup you use covers every way money leaves the account: ACH, wire, bill pay, and any other payment type your business uses.
A full audit trail
Every approval or denial should be logged with a timestamp and tied to the specific payment. That record should be exportable when you need it for a client, an accountant, or your own records.
Flexibility
The best setups let you pause a rule without deleting it, and build multi-step chains for payments that need more than one set of eyes. You shouldn't have to rebuild your rules every time something changes.
Putting structure around a delegated task
Building a payment approval workflow isn't a signal that you don't trust your team. It's the same thing you'd do with any other delegated responsibility.
The goal is to make sure that when something out of the ordinary happens, you find out before the money is already gone.
