Approving spending before a vendor commitment

The riskiest moment often comes before an invoice exists. A founder accepts a proposal, a colleague starts a paid trial, or someone sends a purchase order. Finance sees the obligation only later. Put a simple approval at the commitment point.

Show the full decision

The requester should state the problem, vendor, one-off and recurring cost, term, renewal or cancellation rule, payment timing, and who will use the service. Include implementation or switching effort if it is material. For a significant commitment, compare an alternative; do not turn a routine small purchase into a procurement project.

Set authority by role and value according to the startup’s risk tolerance. The approver should check budget and cash timing; a technical or operational owner checks fit. Consider how the commitment affects cash flow, and choose payment terms that suit the startup.

Record the decision before signing

Keep the approved version of the quote or terms, the decision date, approver, and contract location together. Make clear who may sign, order, or enter payment details after approval. If scope or price changes, return for approval under the startup’s own rule; an old approval is not unlimited.

After purchase, assign an owner to verify delivery and review the first invoice. Approval is not proof the vendor delivered what was agreed. A short record can prevent duplicate spend and make a later renewal decision much easier.