Typical B2B:
Order Approvals

In this series of blogs, we highlight the most common B2B commerce features—the features that you could call ‘typical B2B’. Today, I’d like to discuss Order Approvals in B2B Commerce and how this feature helps businesses maintain control over their purchasing processes.

When it comes to developing and implementing B2B commerce environments, Madia can call itself a true specialist. Over the last 17+ years, we’ve seen many B2B commerce cases, each with its own unique use cases and requirements.

My name is Falco van der Maden, and I am the founder and CEO of Madia (LinkedIn). With nearly two decades of hands-on experience in the B2B commerce industry, I have worked with a diverse range of businesses, from small enterprises to multinational corporations. My journey in this field has equipped me with an in-depth understanding of the challenges and opportunities that businesses face when making choices in the complex world of B2B commerce.

Throughout my career, I have been dedicated to helping businesses optimize their B2B platforms to drive growth, improve efficiency, and enhance customer satisfaction. I am passionate about sharing my knowledge and insights to help others succeed in B2B Commerce.

Why Order Approvals Matter in B2B Commerce

1. Budget Control
   In most B2B scenarios, purchases can significantly impact a company’s financial health. Departments often have set budgets, and order approvals ensure that no purchase exceeds the allocated budget without proper oversight. This is particularly crucial in larger organizations where procurement teams need to closely monitor and manage spending across departments.
2. Accountability and Responsibility
   The order approval process helps assign responsibility for purchasing decisions. Different levels of approval may be required depending on the value of the purchase or the nature of the product. This ensures that responsible individuals authorize orders, minimizing the risk of unauthorized or unnecessary spending.
3. Procurement Process Visibility
   With an order approval system, procurement teams gain visibility over what is being ordered, by whom, and why. This transparency helps avoid duplicate orders, out-of-policy purchases, or products that don’t meet the company’s needs.
4. Compliance with Company Policies
   Many organizations have strict policies regarding vendors, products, and pricing. Order approval processes ensure that these policies are followed, helping companies remain compliant with both internal guidelines and external regulations.
5. Fraud Prevention and Risk Management
   By adding multiple layers of approval for high-value or sensitive purchases, companies can minimize the risk of fraud or unintentional errors. Cross-checking orders against contracts, pricing, and delivery terms ensures that all purchases are legitimate and serve the company’s best interests.

Not All B2B Merchants Need an Order Approval Process

While order approval workflows are essential in many B2B commerce environments, it’s important to remember that not all merchants need to implement this feature for their customers. The necessity of an order approval process varies depending on the type of merchant and customer.

Type of Merchant

Merchants who deal with high-value products (e.g., industrial machinery, IT solutions) often need a structured approval process. Their customers are likely making significant investments that require oversight from multiple decision-makers. In these cases, an order approval system adds value by streamlining the approval process for large purchases.

On the other hand, merchants selling low-cost or consumable items (like office supplies or basic parts) may find that their customers don’t need the extra step of approvals. Offering a more direct and simplified purchasing process can be more attractive to buyers who prioritize speed over control.

Type of Customer

The need for an order approval process also varies by customer profile. Large enterprises with centralized procurement teams often require a robust approval process to maintain control over budgets and responsibilities. These customers will appreciate merchants offering multi-level approval workflows that align with their internal processes.

For small to medium-sized businesses (SMBs), a streamlined purchasing process may be more appropriate. SMBs tend to prioritize efficiency and speed, so they may not need the complexity of a detailed order approval system. Offering flexibility—allowing businesses to enable or disable order approvals—ensures merchants meet the needs of all customer types.

Key Elements of an Effective Order Approval Process

1. Multi-Level Approval Workflows
   Orders can go through a tiered approval process, where smaller purchases are approved by department managers, while high-value or strategic orders require executive approval.
2. Role-Based Permissions
   The approval process should incorporate role-based permissions, ensuring that only authorized individuals can approve or modify orders.
3. Automated Alerts and Notifications
   To keep things moving efficiently, automated notifications can alert approvers when an order requires their attention, preventing unnecessary delays.
4. Tracking and Reporting
   A good order approval system provides detailed tracking of orders, approvals, and rejections, allowing procurement teams to monitor trends and make informed decisions.

Benefits of an Order Approval Process

1. Cost Savings
   By enforcing budgets and preventing unnecessary purchases, an order approval process leads to better financial control and cost savings.
2. Increased Efficiency
   Automated workflows eliminate bottlenecks, allowing orders to move quickly through the approval chain and ensuring prompt order fulfillment.
3. Transparency
   With visibility over all orders, stakeholders can see the status of purchases in real time, reducing confusion and improving inter-department communication.
4. Stronger Supplier Relationships
   A well-managed approval system allows procurement teams to consolidate orders, negotiate better terms with suppliers, and improve overall purchasing strategies.

Conclusion

Order approvals are a cornerstone of B2B commerce for many companies, offering a structured way to manage budgets, assign responsibility, and streamline procurement processes. However, it’s important to recognize that not every merchant or customer needs this feature. Depending on the products offered and the customer base, some businesses may benefit from a simplified purchasing process without approval workflows. Offering customizable solutions ensures that merchants can meet the diverse needs of their customers, whether they require detailed approval processes or not.

Madia

Madia is a commerce solution provider for more than 17 years. Our experience in B2B commerce implementations is extensive. We’ve seen many different use cases and with that, a broad verity of requirements. Our team of experts always, in collaboration with our customer will find the best solution to each of customers needs.

Madia works with the best B2B commerce tools available on the market. Tools that from within the core have been developed to fulfill all the typical B2B needs in commerce.

As a Gold partner of Orocommerce we have, in addition to our experience, one of the best B2B commerce solutions for successfully developing and implementing your B2B commerce platform.

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