Set up a purchase order approval flow for trades: Xero, QuickBooks and ApprovalMax (UK-friendly steps)

Category: Business & Operations • Niche: Procurement, approvals, Xero, QuickBooks, ApprovalMax

Contents

• Quick answer
• Why trades firms need PO approvals now
• What “good” looks like (one-page policy)
• Option A: Xero with ApprovalMax
• Option B: QuickBooks Online Advanced workflows
• Who should approve what? Thresholds that work
• Domestic Reverse Charge and CIS: records to keep
• Flowchart: end-to-end PO to bill
• Troubleshooting and common pitfalls
• FAQs

Quick answer

• Use purchase orders for anything over £100 to control spend and get better prices from merchants.
• If you’re on Xero, layer ApprovalMax for proper multi-step approvals and PO-to-bill matching.
• If you’re on QuickBooks, PO approval automation is built into QuickBooks Online Advanced via Workflows.
• Keep VAT and CIS records tidy: retain POs, delivery notes, invoices and evidence for Domestic Reverse Charge.

Purchase orders in Xero. QBO Advanced Workflows. ApprovalMax for Xero PO approvals.

Why trades firms need PO approvals now

• Material price volatility: formal approvals stop surprise spend and secure quotes.
• Cash flow: POs matched to bills tighten control and speed up month-end.
• Audit trail: clean evidence for HMRC VAT and CIS, plus reverse charge compliance.
• Less rework: attaching photos/specs to POs reduces wrong items turning up.

What “good” looks like (one-page policy)

Keep this simple and printed in the site office:

• When a PO is required: any spend over £100, or any subcontractor booking.
• Who can raise: supervisors and office staff. Who can approve: manager or owner per threshold.
• Checks before approval: supplier, item spec, quantity, price, delivery date, reverse charge end-user status.
• Required attachments: quote, drawings/photo, delivery address, site contact.
• Receiving: mark items received and attach delivery note photo the same day.
• Matching: bill must match the authorised PO lines and quantities before payment.

Option A: Xero with ApprovalMax

Best for: firms that want multi-step approvals, project codes and tight PO-to-bill control.

What you need

• Xero Business Edition with Purchase Orders enabled.
• ApprovalMax for Xero integration.

Steps

1. Map your approval rules. Example: up to £500 site supervisor, £500–£2,000 ops manager, over £2,000 director. Specialist items always to director.
2. Connect ApprovalMax to Xero and import suppliers, accounts, tracking categories and projects.
3. Build approval workflows in ApprovalMax: sequential or parallel, based on amount, supplier, tracking category or account code.
4. Create POs in ApprovalMax or Xero. Route for approval. After final approval, ApprovalMax sets the PO to Authorised in Xero and Xero assigns the PO number.
5. Email the PO PDF to the supplier from ApprovalMax or Xero.
6. On delivery, capture the delivery note photo and mark items received.
7. When the bill arrives, use ApprovalMax’s matching to compare to the PO and receive only what arrived. Exceptions get routed back to approvers.

Useful references: Xero purchase orders overview. ApprovalMax: Xero PO approvals. ApprovalMax: PO numbering and life cycle.

Video: Matching POs and Bills in a Xero-connected setup

Option B: QuickBooks Online Advanced workflows

Best for: firms already on QuickBooks that want basic approval automation without another tool.

What you need

• QuickBooks Online Advanced (PO approval workflows are an Advanced feature).

Steps

1. Turn on purchase orders in Expenses settings.
2. Go to Workflows, choose the PO approval template.
3. Set conditions, for example: if PO amount is over £500 or supplier is “New Supplier,” route to Ops Manager.
4. Assign approver(s), add email or mobile notifications.
5. Test with a small PO, then roll out.

References: QBO Advanced workflows. How POs work in QBO.

Who should approve what? Thresholds that work

• Low spend (under £500): site supervisor.
• Mid spend (£500–£2,000): ops manager.
• High spend (over £2,000) or specialist kit: director.
• New supplier or credit account setup: always director.
• Subcontractor labour: add a check for insurance, right to work, and CIS registration before approval.

Tip: review thresholds every 6 months. If inflation is biting, move the lines.

Domestic Reverse Charge and CIS: records to keep

• Reverse charge: if you buy in-scope construction services and you’re not the end user, the supplier should not charge VAT. Their invoice must say reverse charge applies and show the VAT amount or rate for you to account for. Keep end user/intermediary written confirmations with the PO.
• CIS: for subcontractors, keep gross amounts, materials breakdown and deductions.
• Retention period: VAT business records generally 6 years; CIS records at least 3 years after the tax year.

Guidance: VAT record keeping. CIS contractor record keeping. Domestic Reverse Charge rules. Technical guide.

Flowchart: end-to-end PO to bill

Below is a simple visual of the process you can print and pin up.

Steps at a glance

1. Raise PO with attachments and project code.
2. Auto-route for approval by amount and category.
3. Email approved PO to supplier.
4. Receive goods; attach delivery note photo.
5. Match bill to PO and receipts.
6. Post to accounts and pay on terms.

Troubleshooting and common pitfalls

• Duplicate POs: always search supplier + project before raising.
• Approvals stuck: add a backup approver or time-based escalation.
• Reverse charge errors: train staff to tick the correct VAT treatment and attach the end-user note.
• Missing delivery notes: make it part of the supervisor’s day-end checklist.
• Over-receipting: only mark quantities received when they physically arrive.

FAQs

Do I need a PO for small buys like fixings?

Under £100, use a petty cash or card policy. Over that, use a PO so you can match the bill later.

Can I do multi-step approvals in Xero without extra apps?

Xero doesn’t have rich multi-step rules out of the box. Use ApprovalMax to add amount, supplier and project-based routing.

Which QuickBooks plan has PO approvals?

You’ll need QuickBooks Online Advanced for approval workflows; Plus has POs but not approval automation.

How do I handle DRC on POs?

Flag the job as end user or not, and store the end-user confirmation with the PO. When the invoice arrives, check it states reverse charge and that VAT isn’t charged.

Can I attach photos and drawings to POs?

Yes. In Xero and ApprovalMax you can attach files. In QuickBooks, attach files to the PO record as needed.