The sign-off limit is £500. It was set when the business was a third of this size.

Approval thresholds are set once and almost never revisited, and the drift quietly converts a financial control into a queue with the owner at the front of it.

By Steve 5 min read
Abstract bridge artwork for The sign-off limit is £500. It was set when the business was a third of this size.

Most approval limits have no author. Somebody set the number years ago, when the business was smaller, prices were lower and the owner personally knew every supplier. Since then revenue has multiplied, headcount has doubled, the cost of almost everything bought has risen, and the number has not moved. The control still reads the same. What it does is entirely different. This is worth more attention than it usually gets, because the failure is invisible in the accounts. Nothing shows up as a loss. What shows up is an owner…

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