Delegation of Authority Template Generator

Why every business needs a Delegation of Authority

A Delegation of Authority (DoA) matrix defines who has the authority to commit the business financially: approving invoices, signing purchase orders, authorising expenses, and committing to contracts. Without a clear DoA, businesses face uncontrolled spending, fraud risk, audit failures, and confusion about who can approve what.

For Australian businesses, a documented DoA is not just good governance. Auditors expect to see documented authority levels as part of internal controls testing. Boards have a fiduciary duty to ensure appropriate financial controls are in place. And AP teams need clear rules to know whether an invoice approval is valid or needs escalation before payment is released.

Worked example: mid-size construction company

A construction company with AU$15 million annual revenue and 40 staff sets up a four-tier DoA:

Special conditions: subcontract agreements above AU$100,000 require co-signature from the finance manager and managing director. Related party transactions require board approval regardless of amount. Variation orders above AU$50,000 require managing director approval even if the project manager has authority for the original contract.

This structure allows 85% of day-to-day invoices (materials purchases, subcontractor progress claims under AU$25,000) to be approved at the project manager level without escalation. Only large invoices, unusual transactions, and new contracts require senior management time.

Common mistakes in DoA design

Limits set too low. If the site supervisor can only approve up to AU$1,000 but regularly receives material deliveries of AU$3,000-5,000, every delivery requires escalation. This creates approval bottlenecks and delays. Set limits so that 80-90% of routine transactions can be approved at the first level.

No coverage for absence. When the finance manager is on leave and a AU$60,000 subcontractor claim arrives, who approves it? A DoA without temporary delegation provisions creates either delays (the invoice waits until the approver returns) or compliance breaches (someone else approves without authority). Include standing deputy arrangements for each role.

Documented but not enforced. A DoA that exists as a PDF in a shared drive but is not configured in the AP system is a governance document, not a control. When approval routing is manual (emailing invoices to the "right" person), there is no system preventing someone from approving beyond their limit. Configuring the DoA limits in your approval workflow system makes the control automatic.

How to use this template generator

1. Enter your company details including ABN and version number for document control.
2. Add authority levels for each role. Use the "Standard SMB" quick-fill for a starting point, then customise.
3. Define which transaction types each role can approve and the dollar limit.
4. Set co-signature thresholds and escalation paths.
5. Add special conditions (e.g. related party transactions always require board approval).
6. Download as PDF for board approval, then configure the same limits in your AP system.

Frequently asked questions

What should authority limits be based on?

The organisation's risk appetite, the seniority of each role, and the practical needs of the business. Set limits so that 80-90% of routine transactions are approved without escalation. Review annually or when roles change.

How often should the DoA be reviewed?

Annually at minimum, or whenever there is a significant organisational change (new senior hires, restructures, acquisitions). The review should be documented and approved by the board, with the updated version configured in financial systems and distributed to all relevant staff.

How do I enforce the DoA in my AP process?

Configure the authority limits in your AP automation or ERP system so that invoices above a threshold are automatically routed to the correct approver. This eliminates the risk of someone approving beyond their authority and removes the need for AP staff to manually check limits on every transaction. AP automation makes the DoA a live control, not a static document.