Approval Chain

Meaning & Definition

An approval chain is a predetermined order of people or organizations that evaluate and approve an application prior to making it official. In human resource management, a chain of approval is often utilized for requests such as time off, reimbursement, hiring, promotions, salary modifications, or requests for exemption from policy. Using a chain of approval guarantees that every decision is made in accordance with the company structure and responsibility, and corporate internal control.

Importance of approval chain:

• Keeps transparent and controlled decision-making.
• Reduces payroll, leave, and expense approvals errors or misuse.
• Clearly defines accountability throughout the approval process.
• Assists organisations in complying with internal Human Resources and Finance policies.
• Provides automated workflows for improving efficiency in HRMS processes.

Legal & Regulatory Considerations:

There is no legally mandatory requirement or statutory compliance that is specifically tied to this term. However, the approval chain supports compliance with the following regulations:

• Internal audit requirements.
• The accuracy of Payroll and Statutory filing(s).
• The policies of the Company HR, Finance, and Delegation of Authority.

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