Setting who may approve spending in an agency
How an estate agency can set spending approval limits for its principal, office manager and agents, and which approvals Achekam enforces today.
By Achekam · · 5 min read · For Real estate businesses in South Africa, Nigeria, Kenya
In a young agency, the principal signs everything. Every portal subscription, every set of boards, every photographer's invoice crosses one desk. That works until the agency opens a second office, takes on a rentals department, or the principal spends a fortnight away and the office manager has to decide whether the new signage order can wait.
The answer is not to let everyone spend freely, nor to keep every decision with one person. It is to write down who may approve what, up to which amount, and then make the process follow that rule. This article sets out how to decide the limits and what Achekam enforces when the agency buys through it.
Why limits are a control, not red tape
ACCA lists authorisation and approval limits among the common control procedures a business uses, alongside segregation of duties, physical controls, management controls such as variance analysis, and arithmetic checks such as reconciliations. Investopedia gives the authorisation of invoices and the verification of expenses as examples of preventative controls: they stop a bad payment before it happens rather than finding it afterwards.
AccountingTools adds the principle underneath all of it: no single person should control the authorisation, the record keeping and the custody of assets for the same transaction. In an agency, that means the person who orders the brochures should not be the only person who approves the bill and releases the payment.
ACCA's overview of internal controls covers the control environment, the types of control and segregation of duties if you want the wider picture.
Drawing up an approval table
Keep the table to one page. Three bands are enough for most agencies. Choose amounts that suit your own turnover and write them in; the point is that everyone knows where the lines are.
| Who | May approve | Must refer upwards |
|---|---|---|
| Agent or rentals administrator | Nothing on their own; they request | Every purchase |
| Office manager | Routine costs up to the office manager's limit: stationery, couriers, key cutting, refreshments | Anything above that limit, new suppliers, contracts that renew |
| Principal or director | Anything above the office manager's limit, portal and software contracts, office lease matters | Very large or unusual commitments go to the board or the co-owners |
A few rules make the table work in practice:
- Limits apply to the whole purchase, not to each invoice. Ten boards ordered in two batches are one order.
- Recurring contracts count at their full term, not the first month.
- A person never approves their own request, however small.
- Urgency is not an exception. If something genuinely cannot wait, the principal approves by phone and the paperwork follows the same day.
The OECD lists abuse of non-competitive procedures, such as contract splitting and abuse of extreme urgency, as an integrity risk when a procurement procedure is chosen. Its warning is written for public buyers, but the same two tricks are how approval limits get dodged in a private office. The article on invoices just below the approval limit covers how to spot splitting after the event.
Requisitions, orders and bills: where approval happens in Achekam
Achekam builds approval into three points in the buying process. The amount bands in your table remain the agency's own written policy; what the system enforces is who may not approve.
The requisition. Staff can raise a purchase requisition saying what is needed, why and the estimated cost, and someone other than the requester approves or declines it. An agent who wants new show-day banners records the request; the office manager or principal decides.
The purchase order. A purchase order is raised from the selected quotation of an approved requisition. The person who raised the order cannot approve it, and an approved order can be cancelled with a reason, which leaves a record of why a commitment was withdrawn.
The supplier bill. A business records supplier bills line by line with VAT. A bill without a purchase order waits for approval before it posts, so an invoice that arrives out of the blue does not slip straight into the books. A bill can be paid in full or in parts from a chosen bank account.
So the approver's role in the table maps onto real steps: approving the requisition, approving the order, and approving any bill that came without one. For a fuller walk-through of the same flow in another industry, see materials requisitions and purchase orders.
The quotation rule you set by hand for now
Many agencies want a rule such as "two quotations above a certain amount" for things like a vehicle-branding job or an office refit. Achekam cannot enforce that today. A rule requiring a number of quotations above an amount cannot be switched on from the app: the Policy tab only displays thresholds, and there is no form that saves one. Until a threshold exists, no purchase needs quotations.
Until that changes, keep the rule in the written table and have the approver check that the quotations are attached before approving the requisition. It is a manual check, so name the person responsible for it.
Budgets and committed spend as a second line
Approval limits stop a single purchase being too big. They do not stop many reasonable purchases adding up to too much. Budgets cover that gap.
In Achekam, approved purchase orders count as committed spend against budgets per expense account and period. The budget screen shows the budget, what has been spent, what is committed and what is still available, and flags over-committed lines without blocking a purchase. That last point is deliberate: the system warns, and the approver decides.
To make this useful, set budgets on the expense accounts that matter to an agency, such as advertising and portals, signage, and office costs. If your chart does not separate those yet, the article on an estate agency chart of accounts is a good starting point. When the office manager sees the advertising line flagged as over-committed, that is the moment to involve the principal, even if the next order is within the office manager's own limit.
Checking the table still fits
Revisit the table each year, or whenever the agency changes shape:
- a new branch or a new rentals division;
- a change in office manager;
- a supplier that has grown into a large share of spending;
- a period when many orders sat just below a limit.
Print this year's approval table, check each name and amount against how the agency actually buys today, and have the principal sign the updated version before the next quarter starts.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
