What Is an Approval Workflow? Examples from Finance Teams

An approval workflow is the agreed route a transaction takes before it's allowed to happen: who prepares it, who checks it, and who has the final say. In a finance team, it's the difference between "someone said it was fine" and a named person signing off at a recorded time. This guide breaks down how one works and shows four examples from the transactions finance teams handle every month.

The six parts of every approval workflow

However simple or complex, an approval workflow is made of the same parts.

1. The trigger. What starts it: an invoice raised, a payment requested, a pay run prepared.
2. The maker. The person who prepares the transaction. They gather the details and submit it.
3. The checker. The person who reviews it for accuracy and policy. They approve it, or return it with a reason.
4. The threshold. The rule that decides whether a further approval is needed, usually an amount in naira.
5. The outcome. What happens once it's approved: the invoice is sent, the voucher is paid, the payslips go out.
6. The record. Who did each step, and when. Without this, you have a habit, not a workflow.

The single most important rule sits across all six: the maker can't be the checker. This is called separation of duties, and it's what turns an approval from a formality into a control.

Example 1: A customer invoice

Trigger: the billing officer raises an invoice for ₦1,250,000 plus 7.5% VAT, ₦1,343,750 in total, to Lekki Heights Montessori.

Route:

• Chiamaka Obi, the accountant, reviews it. She checks the customer's TIN, the line items against the agreed fee, and the VAT calculation.
• Because the total is over the company's ₦1,000,000 threshold, it goes to Tunde Bakare, the MD, for final approval.
• Once Tunde approves, the invoice is emailed to the customer.

If something's wrong: Chiamaka returns it to the raiser with a note ("Wrong billing period: should be first term, not second"). It doesn't go out until it's fixed.

Why it matters: an invoice is a promise to your customer and a figure in your VAT return. Catching an error before it's sent costs a minute. Correcting one afterwards costs a credit note, an apology and a revised return. We go into the design choices in How to Design an Invoice Approval Process.

Example 2: A payment voucher

Trigger: the depot manager in Trans-Amadi requests ₦410,000 for diesel.

Route: the request becomes a payment voucher with the beneficiary's bank details attached. The finance manager reviews it against the purchase and the budget, then approves. Only then is it paid.

If something's wrong: the voucher is returned to the raiser ("Attach the supplier's invoice"). The depot manager adds it and resubmits.

Why it matters: vouchers are where money leaves the business. A clear request-to-payment trail answers the three questions an auditor will always ask: who asked, who approved, and what was paid.

Example 3: A monthly pay run

Trigger: Aisha Bello, the payroll officer, prepares November payroll for 46 employees. Gross pay is ₦18,420,000, with PAYE, pension, NHF, NSITF and ITF calculated.

Route: the finance manager reviews the run against last month's: new joiners, leavers, changes in allowances and any loan deductions. The MD gives final approval before payslips are released and payments are made.

What reviewers look for: a variance table makes this practical.

Why it matters: payroll errors are noticed by every employee, immediately. A reviewer comparing months catches most of them before anyone is paid. See Payroll Management in Nigeria for the full process.

Example 4: A staff loan

Trigger: an employee requests a ₦300,000 salary advance, repayable over six months.

Route: HR confirms the request fits the loan policy (for example, no more than one active loan, and monthly repayment no more than a set share of net pay). Finance approves. The deduction is added to payroll from the next run.

If circumstances change: a further approval pauses the deduction, for example during unpaid leave, and resumes it later. The pause is recorded, so nobody wonders later why a month was skipped.

How to set approval thresholds

Thresholds decide when one approval becomes two. Set them too low and the MD approves everything, so nothing moves. Set them too high and large payments get one pair of eyes.

A practical way to start:

1. List last quarter's transactions of each type by amount.
2. Find the amount above which roughly the top 10–20% of transactions sit.
3. Set the final-approval threshold there, and review it after three months.

For a business whose invoices mostly sit between ₦150,000 and ₦800,000, a final-approval threshold of ₦1,000,000 catches the large, unusual ones without slowing everyday billing.

Five common mistakes

• Approving your own work. Even in a small team, someone else should check. If there's genuinely nobody, the owner reviews after the fact, every week.
• Approving in chat. A thumbs-up on WhatsApp isn't a record you can find in six months.
• No route for "no". Reviewers need a way to return an item with a reason, not just ignore it.
• One approver for everything. When that person is away, the business stops. Name a deputy.
• Never revisiting the rules. Thresholds set when you had ten customers rarely suit two hundred.

Every approval should leave a trace. That's what an audit trail is for.

How Flux helps

Flux runs approvals across invoices, vouchers, payroll and staff loans. Invoices go to an accountant for review, with an optional final approval that you set to always, never, or above a naira threshold. The person who raises an invoice can't approve it, returned items go back to the raiser, and invoices are emailed only once they're approved. Vouchers follow a raise, review and approve trail, pay runs have approval steps, and every step lands in the audit trail. See how approvals work in Flux.