Approval is a depth 3 action the agent can earn for a narrow class of invoice: fully matched to a purchase order and receipt, from an established supplier with unchanged bank details, under a value set per cost centre. Everything else is held for the budget holder. The agent never releases payment, and every approval is filed.
What does approval mean in the AP tool, and who owns it?
In most accounts payable automation tools, approving an invoice moves it from "pending" to "approved for payment". It does not pay anyone. The next payment run picks it up, and a separate release by people sends the money. That gap is why approval can sit at depth 3: it is routine, bounded and can be undone before the run without contacting anyone outside.
The delegation of authority owns approval limits. Today it names people: a budget holder may approve up to one amount, a director up to another. Letting an agent approve means adding a line to that delegation for a defined class of invoice, signed by whoever signs the delegation, usually the CFO. The AP team lead owns the day-to-day operation.
How the agent connects is set out in connecting an AI agent to your accounts payable automation tool. This playbook covers the permissions once it is connected; the wider rules for finance agents are in AI agents for finance.
Which permissions do you grant per action?
- Agent, depth 1: reads invoices, purchase orders, receipts and supplier records. Read only on the supplier master.
- Agent, depth 2: codes invoices. Proposes account, cost centre and tax code; a person confirms coding on anything without a purchase order.
- Agent, depth 3: approves invoices in the defined class. Matched within tolerance, supplier established, bank details unchanged within the cooling period, value under the limit for that cost centre.
- Agent, depth 2: routes everything else. Sends the invoice to the right approver with a note on why it was not approved: no receipt, price variance, first invoice from this supplier, over limit.
- Agent, refused: edits the supplier master or bank details. Those changes go through verification out of band.
- Agent, refused: releases payments or adds invoices to a run outside the normal selection. Payment is a separate decision; see whether an agent can approve a payment run.
- Person, budget holder or delegate: approves held invoices.
| Step | The agent does | Depth | Stays with a person |
|---|---|---|---|
| Read | Invoices, orders, receipts, suppliers | 1 | Nothing |
| Code | Proposes coding | 2 | Confirming non-PO coding |
| Approve in class | Moves to approved for payment | 3 | Setting the class and limits |
| Route exceptions | Sends with reason | 2 | Budget holder approves |
| Supplier changes | Nothing | refused | Master data team |
| Payment release | Nothing | refused | Authorised signatories |
How are limits set, and why per cost centre?
A single global limit is easy to configure and wrong. A facilities cost centre approves many small, repetitive invoices; a marketing cost centre approves fewer, larger, more discretionary ones. Set the agent's limit per cost centre, and set it below the lowest human limit in that line of the delegation, so the agent never approves something the budget holder could not.
Add a cumulative limit per supplier per period. A supplier who sends five invoices just under the limit in one week is the classic way to get around a per-invoice cap, whether by accident or design. The agent's bound counts invoices already approved in the period, by people and by the agent, and holds the one that crosses the line.
Where a supplier is also a customer, a different team may be setting credit limits for that trade customer. Keep those capabilities on separate agents; one agent approving what you owe and deciding what you extend makes netting decisions nobody asked for.
Which controls matter, and what evidence does each leave?
Delegation line for the agent. The class and limits are written into the delegation of authority. Evidence: the signed delegation version referenced on every approval.
Match evidence. Each approval records the purchase order, the receipt and the variance on price and quantity. Evidence: the match result stored with the verdict.
Supplier status check. Established supplier, no open dispute, bank details unchanged within the cooling period. Evidence: the supplier record version read at the moment of approval.
Cumulative limit. Running total per supplier and per cost centre. Evidence: the total on each verdict.
Revocation. The AP lead can switch off the approval capability, per cost centre or entirely, without removing the agent's read access. Evidence: the revocation event in the log, and invoices returning to human queues.
What should you measure?
- Invoices approved by the agent that were later rejected or reversed. Every one is reviewed.
- Held invoices by reason. A dominant reason, such as missing receipts, is an upstream fix.
- Approvals near the limit. A cluster just under the threshold is a pattern to investigate.
- Approval time for in-class invoices against the time before the agent.
- Early payment discounts taken on invoices that now reach the run sooner.
Where does it usually go wrong?
Tolerance creep. A price tolerance set to absorb rounding is widened to clear a backlog. Every change is a delegation change and needs the same signature.
Receipts entered to clear the match. A requester books a goods receipt so the invoice will match, without the goods arriving. The agent should flag receipts entered after the invoice for the same quantity, and the receiving function should own receipts.
Approval treated as release. People assume an approved invoice has been checked for fraud. Approval checks the match; payment review checks the payee. Keep both.
Silent limit changes. A cost centre's limit is raised in the tool and the delegation document is not updated. The bound in the agent should read from the signed version, not from tool settings alone.
Questions people ask
Can the agent approve non-purchase-order invoices?
Not at first. Without an order there is nothing to match, so approval depends on judgement about the spend. Some teams later allow recurring contracted charges, such as rent, against a signed schedule.
Does the budget holder lose sight of what the agent approved?
They should not. Send each budget holder a periodic list of what the agent approved on their cost centre, and let them query any line.
What happens if the agent's certificate lapses?
The approval capability stops the same day and in-class invoices go back to the budget holder's queue. Coding drafts and routing continue at their own depths.