Approval hierarchies let you automatically route documents for approval.

There are two kinds of approval hierarchies in Purchasing: position hierarchy and employee/supervisor relationships. If an employee/supervisor relationship is used, the approval routing structures are defined as you enter employees using the Enter Person window. In this case, positions are not required to be setup. If you choose to use position hierarchies, you must set up positions. Even though the position hierarchies require more initial effort to set up, they are easy to maintain and allow you to define approval routing structures that remain stable regardless of how frequently individual employees leave your organization or relocate within it.

Setups required for Position hierarchy in detail: Say we want to implement the below position hierarchy for the Requisition Document approval routing in Purchasing (Each rectangle represents a Position), below are the setups required:

1) Enable the check box Use Approval Hierarchies

Navigation: Purchasing Responsibility > Setup > Organizations > Financial Options

Click Human Resources tab. to use positions and position hierarchies to determine approval paths for your documents within Purchasing. (Disable this option if you want approval paths based on the supervisor structure)

2) Create Positions S20, MGR, DIR based on the above hierarchy in HR.

Navigation: Human Resources responsibility > Work Structures > Position > Description Click on New Button and enter the required fields.

Similarly create MGR and DIR positions.

3) Assign the positions created to the Employees who fall under the portfolio. Each position can be assigned to more than one employee.

Navigation: Human Resources responsibility > People > Enter and Maintain

Query for the Employee Name. Click on Find Button.

Click on Assignment button

Enter the desired value in the Position field.

Save the work.

4) Create the Position hierarchy

Navigation: Human Resources Responsibility > Work Structures > Position > Hierarchy

Enter Hierarchy Name Save Enter the From Date Save

Click in the POSITION field and query the position you would like to be your Top position. In our example you would query for DIR.

After the Position is selected Press the Down Key. Your cursor will now be in the subordinate region, choose the position MGR to go under DIR position.

Again hit the Blue Down Arrow. You will now see the Subordinate position shift to where the Top Position was located. Add a new Position S20.

Save the work.

5) Create Approval groups for each Position.

Approval Groups window lets you define the Approval limits for a particular group which will be assigned to a position. As per our example, we will create three Approval Groups S20, MGR, DIR and define the limits.

Navigation: Purchasing Responsibility > Setup > Approvals > Approval Groups

Enter the Name of the approval group Select Enabled to permit the approval group to be assigned to a position in the Approval Assignments window. Choose one of the following Objects: Account Range (Required) You enter the accounting flexfields for the Low and High Values. Document Total (Required) The document total refers to the monetary limit on an individual document. Item Category Range You enter the purchasing category flexfields for the Low and High Values. Item Range For this option, you enter the item flexfields for the Low and High Values. Location The location refers to the deliver-to location on a requisition as well as the ship-to location on purchase orders and releases. Select the rule Type: Include or Exclude indicates whether to allow objects that fall within the selected range. Enter the Amount Limit. This is the maximum amount that a control group can authorize for a particular object range.

Enter the Low Value. This is the lowest flexfield (accounting, purchasing category, or item) in the range pertinent to this rule. When the object is Location, enter the location. You cannot enter this field when the object is Document Total. Enter the High Value. This is the highest flexfield (accounting, purchasing category, or item) in the range pertinent to this rule. You cannot enter this field when the object is Location or Document Total. Save your work.

6) Assign the Approval groups to the Position

Navigation: Purchasing Responsibility > Setup > Approvals > Approval Assignments

Query the Position for which you want to assign the Approval group.

Select the Document type you want to assign to this position or job (As per our example we will choose Approve Purchase Requisition) Enter the approval group that you want to assign to the selected position or job. The list of values includes only enabled approval groups with at least one approval rule. (Assign it to the approval group DIR as per our example) Enter the Start Date and End Date for the assignment. Save your work.

Similarly assign the Approval groups MGR and S20 to the positions MGR and S20 respectively for the document type Approve Purchase Requisition.

7) Assign the Position hierarchy created to the desired Document Type. Document Types window can be used to define access, security, and control specifications for all Purchasing documents. Navigation: Purchasing Responsibility > Setup > Purchasing > Document Types

Find Document Types window appears. Select the document type Requisition .

Enter your Document Name for the document. The description must be unique for the given document type.

Check Owner Can Approve to indicate that document preparers can approve their own documents. Check Approver Can Modify to indicate that document approvers can modify documents. Check Can Change Forward-To to indicate that users can change the person the document is forwarded to.

Check Can Change Forward-From to indicate that users can change the name of the document creator. This field is applicable only when the Document Type is Requisition.

Check Can Change Approval Hierarchy to indicate that approvers can change the approval hierarchy in the Approve Documents window. This field is not applicable when the Document Type is Quotation or RFQ.

Check Disable to disable a document type. For Purchase requisitions only, select Use Contract Agreements for Auto Sourcing to require the requisition creation autosourcing logic to include approved contract purchase agreements.

Include Non-Catalog Requests For Oracle iProcurement only, this checkbox is used in conjunction with the Use Contract Agreements for Auto Sourcing. Select this checkbox to enable the use of contract purchase agreements when autosourcing non-catalog requisitions.

Choose one of the following options: Hierarchy Only the document owner and users above the owner in the defined purchasing security hierarchy may access these documents.

Private Only the document owner may access these documents. Public Any user may access these documents. Purchasing Only the document owner and users listed as buyers in the Define Buyers

window may access these documents. Choose one of the following Access Level options:

Full Users can view, modify, cancel, and final close documents. Modify Users can only view and modify documents. View Only Users can only view documents. Choose one of the following options:

Direct The default approver is the first person in the preparers approval path that has

sufficient approval authority. Hierarchy The default approver is the next person in the preparers approval path

regardless of authority. (Each person in the approval path must take approval action until

the person with sufficient approval authority is reached.) Choose the Position Hierarchy that we have created previously Purchasing Approval Test as the Default Hierarchy field.

Run the Fill Employee Hierarchy Request Navigation: Purchasing Responsibility > View Requests Click on Submit a New Request button and select Single Request.

Approval routing explanation based on the example hierarchy:

1. Say the S20 position creates a Purchase Order for $4,000 and submits for Approval. 2. The system will look at which Approval Hierarchy to be used from the Document Types window. Since in our example Owner Can Approve is not checked, it will try to determine what the Approval group is for the position MGR as MGR is the next Position in our hierarchy. 3. Once the Approval Group is located, the rules will then be considered one at a time, from first

to last. 4. If all rules are satisfied, the Purchase Order will be forwarded to the Manager for Approval. If a rule cannot be satisfied, the Purchase Order will be forwarded to the next position (DIR) in the Hierarchy. Whoever is assigned to that position will then need to take action on the Purchase Order.

In release 11.0, when attempting to Approve a Purchase Order, if the system doesnt find any of the positions defined in the hierarchy to have the authority to Approve, then the Document will remain Incomplete without any warnings instead of In Process.