Who should approve a contract based on its value?

“Who needs to sign?” is the question that holds up the most files. Without rules based on value, two extremes coexist: everything goes up to Management (bottleneck), or everyone signs “on their own” (risk). Clear thresholds, aligned with the delegation of authority, are at the heart of well-governed contract management.

This topic builds on the contract management guide and on how roles are split between Procurement / Legal / Management.

Principles before figures

• A single definition of “amount” (annual excl. VAT, total over the term, etc.)
• Few tiers (3 to 4) so they are easy to remember
• Written exceptions (urgency, exclusivity, personal data)
• A record: who approved, when, on which version

Sample grid (to adapt)

The thresholds below are for illustration. Model them on your banking / signing authority delegations and your risk appetite.

1. Up to T1: business team or Procurement, standard template, short checklist.
2. From T1 to T2: Procurement + business manager; Legal if non-standard.
3. From T2 to T3: + Legal systematically; Management kept informed.
4. Above T3: Management (or executive committee) approval mandatory before signature.

Value is not the only criterion

Some low-value contracts are still sensitive: exclusivity, heavy penalties, personal data, non-compete clauses, multi-year commitments. Providing for “escalation to Legal” regardless of amount avoids blind spots. The pre-signature checklist complements the value grid.

Amendments, frameworks and cumulative totals

An €8k amendment on a framework already close to the Management threshold can tip the total commitment over. Decide whether you approve based on the amendment alone, on the cumulative total, or both. Without this rule, teams artificially split commitments.

Making the rule work day to day

• Display the applicable threshold on the contract record
• Route the workflow automatically based on the extracted amount
• Measure “off-workflow” files (signed by e-mail with no trace)
• Review thresholds once a year with Management

Common pitfalls

• Threshold too low → Management overloaded, rushed decisions
• Threshold too high → heavy commitments with no strategic oversight
• Amount entered incorrectly → wrong workflow (hence the value of extraction)
• A verbal “OK” with no version attached

Communicating the grid without jargon

Publish the grid on a half-page internal page: definition of the amount, three thresholds, exceptions, who to contact if in doubt. Train Procurement and managers once; after that, the workflow should carry the rule. If every approval starts with a debate about “who’s signing this?”, the grid is not operational.

DocPilot and approval thresholds

DocPilot extracts the amount at intake (OCR + extraction), triggers the appropriate workflow, keeps the audit log, lets you search for the complete file and approve on mobile. Inbound e-mail stops the PDF from sitting in a personal mailbox while waiting for “the right approver”.

To go from a PowerPoint grid to a real workflow, use DocPilot’s contract management software: start with one contract type and two thresholds, then expand.