Levels of Spending Authority

When Entrepreneurs start the company, they often control the spending authority such that all expenditures have to be approved by them.

As the company grows and competent leaders and managers are in place, the Entrepreneur/CEO needs to delegate the spending authority to the secondary levels in the organization.

Depending upon the size of the company, use careful thought in establishing the level of spending authority at each level. Purchase orders should be issued only upon the approval of the requisitions by the proper level of authority for the amounts to be expended.

Internal controls in this area are important for growth.

Ravi Patel

www.patelCFOservices.com

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