Skip to main content

 

 

Coupa Success Portal

Approval

Overview

The approval process is the formal, internal approval of the final contract before signature.  In general, review and negotiation cycles will have been completed and the outcome reviewed and agreed, or the contract is within legal/commercial playbook guidelines and needs no review before official approval.

Scoping Questions

  1. How does your approval process work today? Are there different approvers depending on the contract value?
  2. When a contract is sent for approval, does the approver review the actual contract or a summary thereof?
  3. How do users know who they need to send the contract to for approval?

Design Options

The first design decision is whether approval is even required. The ideal is that the contract remains within the legal and commercial playbook, thereby it falls within acceptable tolerances. For these contracts, adding an approval step is unnecessary as all the content/commercials are pre-approved.

It is therefore important that the design facilitates being able to identify when the negotiation went outside the playbook and needs formal approval. (The best practice is to have the relevant areas (e.g. legal, SME’s) part of the negotiation process, so this article assumes that the approval required is that of a senior manager). When approval is required, the next design decision relates to what exactly will be sent for review and approval:

  • Full Contract
  • Summary of key terms / commercials
  • both

If a summary document is required, then the contract template needs to be designed to generate this in addition to the contract. (Please refer to Template Structure and Grouping for more details). It also requires the process to ensure that any metadata is updated (and an updated summary generated) if any data points changed during the negotiation.

The final design decision relates to the workflow:

  • Out-of-the-box workflow
  • Bespoke workflow

To avoid customizations, the recommendation is to use Out-of-the-box (OOTB) workflow. However it will depend on the approval rules of the customer.

Considerations

  1. The client should have clear approval rules, these may include rule for approval based on the contracts:
    • Financial commitment
    • Specific contract topics/clauses included e.g.
      • Finance (tax rules, financing schemes etc.)
      • Data protection / location
      • Data security
      • HR (TUPE etc.)
      • Supplier risk level
      • Etc.
  2. It is important to consider if CLMA will enforce or facilitate the contract approval process.  And if CLMA will dynamically calculate the approvals required, or follow a static list of roles for each contact type.
  3. To enforce the process, a custom workflow will have to be developed to match the approval policy.  
  4. To facilitate the approval process with a dynamic approver list, the template can produce a summary sheet based on the contracts data. The OOTB workflows may then be used by the user to gather the approvals. 
  5. For buy-side contracts integrated into Coupa purchase-to-pay, clear separation should be maintained between purchase requisition (PR) approval and CLMA contract approval. This may lead to a manager approving a contract, and then a second approval when a PR is raised against that contract. The business process for this, and the approval rules should be clearly defined to avoid confusion.
  6. Email approvals or approval via the Coupa App is not yet available. To complete a workflow task, the user will need to log into CLMA. For executive level approvers, this is not ideal, so bear in mind the level of guidance/training that can be provided to help make this more intuitive for these users.
  7. OOTB workflows are currently an addition to the process, rather than a compulsory step. As such, there is nothing stopping a user from moving the contract through to sending it for signature whilst there is an active workflow against the contract. If it needs to be strictly controlled that no contracts can go for signature until it’s passed approval, then bespoke workflows are required to facilitate this requirement.

Things to avoid

CLMA workflow is to manage contract approval, not business process in general. When using a bespoke workflow, do not try to cater for other parts of the business process that do not strictly relate to contract approval.

  • Was this article helpful?