14 April 2026
Written by Sajid Fense, Founder
Who in your business is allowed to sign a contract?
Whoever your approval matrix says, and if you do not have one the honest answer is whoever was in the room.
Most businesses can answer this for large amounts and cannot answer it for small ones. There is a clear rule for the six-figure agreement and no rule at all for the software subscription, the equipment hire, or the supplier who sent through their own terms with a signature block already in it.
The small ones are where the obligations accumulate, because they are the ones nobody escalates.
What an approval matrix is
A table with three columns: the type of commitment, the threshold, and the role that may approve it. Not the person: the role.
A workable one for a business of thirty people might look like this:
| Commitment | Threshold | Approver |
|---|---|---|
| Customer agreement on standard terms | Any value | Sales lead |
| Customer agreement with a variation | Any value | Operations manager |
| Supplier agreement on their terms | Under $10,000 per year | Operations manager |
| Supplier agreement on their terms | $10,000 per year or more | Managing director |
| Anything with a term over three years | Any value | Managing director |
| Anything creating a security interest | Any value | Managing director |
Six rows. It fits on a wall. That is roughly the right size: a matrix that needs a page of explanation will not be followed under deadline, which is the only time it matters.
The four design decisions
Thresholds should be annual value, not contract value. A three-year agreement at $8,000 a year is a $24,000 commitment, and people will describe it as an $8,000 one because that is the number on the invoice. Setting the threshold in annual terms and then adding a separate row for long terms catches both.
Roles, never names. A matrix naming individuals stops working the first time somebody is promoted and stops working entirely when they leave. It also creates the single worst failure mode, which is a matrix that names somebody who no longer works there and is therefore ignored in full.
Include the categories that have no dollar value. Security interests, exclusivity, anything that restricts who else you can sell to, anything with automatic renewal. These are commitments that a threshold based on price will never catch, because their cost is not in the price.
Decide what happens when the approver is away. This is the row everybody omits and it is the row that gets tested first. Either name a standing delegate role, or state that the approval waits. Both are defensible. Silence is not, because silence means the deal proceeds and the matrix quietly becomes advisory.
Why supplier documents are the gap
Almost every approval process is built around documents the business issues. Documents the business receives go through a different path, which is usually no path.
A supplier sends their agreement. It arrives as an attachment to an email about something else. Somebody signs it because it is obviously routine, and it is obviously routine, and it also contains an automatic renewal, a three-year term and a price escalation.
The fix is a single row in the matrix covering inbound documents, and one habit: anything that arrives with a signature block goes to the same intake point as everything else, regardless of how routine it looks. The intake point does not need to assess it. It needs to log it and route it.
Making it stick
An approval matrix fails in one of two ways. Either nobody knows it exists, or it is slower than the deadline.
For the first: it belongs in onboarding and in the place where documents get requested, not in a policy folder. If somebody has to look for it, it is not in effect.
For the second: measure how long approvals actually take. If a routine approval takes three days, people will route around it, and they will be right to. The threshold is not "is this rule correct" but "is following this rule faster than ignoring it". A matrix with a same-day path for the common case and a slower path for the unusual case survives; a uniformly slow one does not.
What it produces
After a year, a working matrix gives you something no other artefact does: a list of every commitment the business has made, by category, with a role attached to each. That list is the input to almost every other question worth asking: what are we committed to, for how long, and who agreed it.
It also does something quieter. It converts "who is allowed to sign this" from a question about seniority into a question about category, which removes the awkwardness that stops people asking it at all.
The boundary
The matrix decides who approves. It does not decide whether the terms of any particular document are acceptable, what a clause does, or what a commitment exposes the business to. Those go to your own external adviser, and they go there faster, because the matrix is what routes the document to somebody who knows to send it.