Signing authority

Actually this issue extends well beyond signing authority. We created for each employee an authorization profile. This file addressed approval of a broad variety of authorizations often with stratified dollar levels and potential risk. Thus a secretary might be able to requisition office3 supplies up to $500, where approval of major contracts required approval of two corporate officers, one of which had to be either the CEO or CFO. Several types of transactions were restricted to senior management. These levels depended on the magnitude and degree of risk. This permitted us to function smoothly within the appropriate levels of authority but for larger or riskier agreements required higher level of authority.

The following are the types of authority levels we addressed. Purchasing: purchase requisitions, purchase orders under contract, PO"S or non-PO items, authorization for initiating professional services or other non-inventory items, approval of invoices for payment and actual check signing, T&E approval, petty cash reimbursement. Sales: authority over sales terms, pricing, issuance of credits within sales contracts, credits outside sales contracts., approval of promotional programs etc. There were about 40 items, most of which were N/A for most employees or restricted to only their specific work areas.

The approval profile was signed by the employee, direct supervisor and a member of higher level of management. No levels of authority could be approved that exceeded the level limits of the approver. From time to time authority profile limits were updated following the same approval process previously described. We had an authority policy which was distributed and the approval profiles in a data base. Anyone should feel free to contact me if additional details are desired.