How to set up contract approvals in a growing company

In a five-person company, the founder reads every contract. At fifty people that stops working: sales sends proposals, procurement signs vendors and HR issues offer letters. Without a clear approval process, contracts go out with terms nobody agreed to. With a heavy one, deals stall. Here is how to find the middle.

Start with three questions

1. Which contracts need approval? Usually anything that is not on your standard template, or that commits the company to spending money.
2. Who must approve? Legal for terms, finance for money, the business owner for the deal itself.
3. In what order? Approvals that happen one after another are clearer than everyone at once.

Keep the rules few and clear

Write rules people can remember. For example:

• Sales contracts on the standard template: no approval needed.
• Sales contracts with changed terms: legal, then the head of sales.
• Vendor contracts: the team lead, then finance.
• Anything with unlimited liability: the CEO.

Three to five rules cover most companies. Add more only when a real problem shows up.

Never let people approve their own contracts

The person who asks for approval should not be the one who gives it. It sounds obvious, but in small teams it is the most common gap.

Decide who can sign

Approval and signature are different. A contract can be approved by legal and finance but must still be signed by someone with signing authority: usually directors or named officers. Keep a list of who can sign for the company, and check it before every contract goes out.

Make it fast

Approvals fail when they are slow. Three things help:

• Approvers get a notification the moment it is their turn.
• They can read the contract and the changes in one place, not across email attachments.
• Any one approver at a step is enough, so one person on leave doesn't block a deal.

Keep a record

For every contract, you should be able to see who approved it, when, and which version they saw. That record matters when a dispute or an audit comes.

How April does it

In April for businesses you set approval rules in steps, give each person a role with tick-box permissions and list the people allowed to sign. A contract can't be sent until it's approved, and approvers get a notification and an email. See how approvals work.