Right-sizing deal approvals as you grow: a maturity framework

When designing approval rules, you need enough rules to catch the deals that could really hurt the company, without slowing down the routine deals. The right number of rules shifts as the company grows.  What is enough today will be too little in a year.  What suits a large company today would be too much for a small company.

A common mistake is implementing a more sophisticated process than your business needs today. The superpower that smaller companies have when competing with bigger companies is less process complexity - don't give up that superpower to 'look more sophisticated.  A mature approval matrix bolted onto a small team may appear responsible but gets circumvented by frustrated AEs within a month. The healthy path is to build for where the business actually is today, and to add more rules as the business grows. This blog will outline a rough progression through three stages, with the understanding that most companies are moving through them continuously.

What is the minimum viable approval process?

Begin with a small number of rules that address genuine risk the business faces today, and resist the urge to add more until needed. Decide on and document a clear definition of a standard deal as a baseline. Then, choose three to five triggers, which for most companies are a subset of discount, payment terms, commercial terms deviation, and custom commitment.  At this early stage, don’t worry about adding validation steps for booking completeness. Optimize for speed and simplicity, keeping the process to no more than two approval levels. Assign each approval to a role not a person, and give each role a backup. At this stage, for simplicity, send all approvals to the role rather than separating out by function.  Next, require AEs to provide a short explanation for every approval request.  The required-reason field costs will build the evidence you will use to decide which exceptions have become common enough to fold into the standard deal definition. Finally, establish an SLA, e.g., 24 hours, for approvers.

When should I add more?

Add net new rules when the variety of your deals begins to strain your existing one-step approval path. E.g., when a company selling one product on an annual Net 30 contract begins taking on custom work, selling to buyers who run formal security assessments, or negotiating structures your original approval triggers didn’t anticipate, the approval process should expand to multiple parallel approval requests from different teams.

Split the single approval path into separate parallel paths for pricing, finance, legal, security, product, and services. Reviewing in parallel instead of in sequence keeps approval time down. Validation for booking readiness should now become its own dedicated gate, not an afterthought at Closed Won. Implement re-approvals for changes mid-deal so that a change in one area only triggers another approval in the affected area, not on the entire deal. For example, if pricing and discounting is already approved, but the customer requests an increase in the volume and mix of products which makes them eligible for a large discount on the order from, it should trigger a re-approval.  

Promoting an exception into the standard

Do a quarterly review of all approved and rejected deals to see how the approval process should be modified and to prevent the list of triggers from growing in volume too much. Suppose the quarterly review shows that requests for Net 45 are approved ninety percent of the time, almost always on deals above a certain size and almost always declined below it. It is a policy the company has been making one deal at a time without writing it down. Encode this in the standard deal definition. Net 45 should become standard for deals above that size and remain an exception below it.  The approval trigger that used to fire on every Net 45 request now fires only on the deals that fall below that size threshold. The review has turned a repetitive manual decision into an automatic one. The reviewers get their time back, and the exception list gets shorter instead of longer. Doing this consistently, quarter after quarter, will make your approval process faster and simpler.

What does a mature process look like?

The mature approval process is not defined by having a long complex list of approval triggers. It is defined by routing ever fewer deals to humans while still catching the ones that need judgment. 

In practice, that will mean adding thresholds calibrated by segment, deal size, product, region, or margin, so that a rule can be strict where the risk is high and relaxed where it is low, rather than requiring manual review of every deal. A mature process automatically approves deals that fall inside the standard, and automatically approves changes that make a deal better for the company, such as a shorter payment term or a smaller discount. It means routing dynamically to the correct regional or functional owner instead of to a single central queue. It means tolerance bands for minor changes and true-ups, so that trivial movements do not re-trigger a full review. A mature process also supports automated reminders and escalation, so that nothing stalls. And it means a single view of approvals across quoting, contracting, booking, and billing, so that no deal falls through a gap between systems.

How to tell you have added too much

In most organizations, approval processes tend to accrete rather than erode.  Adding new approval triggers and rules is easy to justify because each new rule points to business risk. Removing process is harder, since nobody wants to be the person who dropped a critical control.

But a well-designed approval process should get quieter over time, not louder. Each quarter, retire rules that no longer catch anything. A rule that fires constantly but is always approved is taxing the business and should become part of the standard deal definition. This pruning is an important ongoing part of maintaining a solid approval process. 

A blueprint

For most sales-led B2B companies, a strong mature approval process looks like this:

1. Auto-approve deals that fall within the standard deal definition.
2. Sales manager approval for moderate discounts.
3. Deal desk together with finance for deep discounts, unusual payment terms, price protection, or nonstandard structures.
4. Legal only when contract language deviates from the standard terms or previously approved variance.
5. Product, engineering, services, or security only when the deal creates a commitment that function owns.
6. Independent reviews run in parallel.
7. When a quote is changed, only require re-review of changes - not the whole quote.
8. Measure approval rate, turnaround time, resubmission rate, and the most common exception reasons over time.
9. Review the rules quarterly and remove the ones that have stopped earning their place.

The ideal approvals structure, regardless of your company stage, should offer a fast path for standard deals, a clear path for exceptions, and every decision made by the person who will answer for the consequence.

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Turnstile is a quote-to-cash solution with approvals built right in.  The definition of a standard deal, the routing rules, and the gates all live in the same system that produces the quote, the order form, and the invoice, so an approved deal carries straight through from sign-off to booked without anyone re-entering the terms along the way. Approvals stop being a separate tool you have to wire into everything else and become part of how a deal moves.

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Frequently asked questions

What is the minimum viable approval process?

The minimum viable approval process is one that avoids downstream headaches, such as being unable to operationalize the deal, unable to collect payment, and/or the deal does not mean minimum margin requirements. To achieve this, we recommend a written standard-deal definition, three to five triggers, no more than two approval levels, role-based approvers with backups, one enforced gate before the quote or order form, a required reason for every exception, and a same-day SLA for commercial approvals. 

How many approval levels do I actually need?

Usually you need two to start: a manager or functional owner for moderate exceptions, and an executive or cross-functional owner for material ones. Add more levels only when needed due to volume.

When should I add more approval rules?

When the variety of your deals, rather than the volume alone, starts to strain a single path, add more approval rules. That usually happens as you take on custom work, buyers who run security assessments, or nonstandard structures.

How do I know an exception should become policy?

When your quarterly review shows the same exception is approved almost every time, it should become policy. At that point, change the standard so the deal stops being an exception at all, rather than continuing to approve it by hand. However, just because you will approve it doesn’t mean it has to be your first offer. For example, you may no longer require an approval to net 45 payment terms, but you can still offer net 30 to new customers by default. 

Where to go next

• Sales deal approvals: what to automate, what to route, and to whom covers the principle behind the stages.
• How to design approval rules that don’t slow deals down covers how to write the rules themselves.

Turnstile is a quote-to-cash system with robust approvals built in. The definition of a standard deal, the routing rules, and the gates all live in the same system that produces the quote, the order form, and the invoice, so an approved deal carries straight through from sign-off to booked without anyone re-entering the terms along the way. Approvals stop being a separate tool you have to wire into everything else and become part of how a deal moves.

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