Who approves spending in a startup?

Spending is approved by tier. Under your first limit, the budget owner approves. Above it, one named person approves in writing, and above your second limit, both founders (or the board) approve.

You set the two limits yourself. The table below shows the structure; fill in the brackets with numbers that fit your burn.

Watch the 5-minute video version.

The 3-tier spending approval matrix

Tier	Amount	Who approves	What counts as approval
1	Up to [your limit]	Budget owner for that area	Within that owner's budget
2	[your limit] to [your second limit]	One named role, such as the chief executive	A written "approved"
3	Above [your second limit]	Both founders, or the board	A written "approved" from each

Who is informed: whoever keeps the books for every tier, plus the budget owner for tiers 2 and 3.

A spending approval matrix is sometimes called a spending authority matrix. Either way, it answers one question for every purchase: who can say yes?

Set it up in 15 minutes

Pick your two limits. Base them on monthly burn and on how easily the spend can be reversed.
Name one role per tier. "Leadership" is not an approver; one person must hold each role.
Count recurring costs at annual value. Judge subscriptions by their 12-month cost and contracts by their total commitment.
Define approval. A written "approved" counts. If there's no answer [X] days before the due date, ping once, then escalate a tier.
Name an owner for the matrix. That person reviews it every quarter and whenever the team grows.

Common mistakes

Most approval problems come from a few habits, not from bad limits.

Treating a forwarded invoice as approval.
Counting a thumbs-up emoji or silence as a yes.
Letting two people both approve the same tier with no default.
Judging a monthly subscription by its monthly price, not its annual cost.
Lumping hires, new vendors, annual contracts and refunds in with ordinary purchases; give each its own row.

FAQ

What is a good spend approval process for a small team?

Three amount tiers, one named approver per tier, and a written "approved" on record. Start simple and add rows only when a real case doesn't fit.

What should an approval limits policy include?

Your two limits, the approver role for each tier, what counts as approval, and an escalation rule for late answers. Check contract and tax questions with your own advisers.

What are expense approval best practices?

Get approval before the spend, not after. Keep every approval in one shared place so anyone can see who said yes and when.

Who approves the budget in a company?

In most startups, the founders or the board approve the overall budget. Budget owners then approve spending within their share, up to the first limit.

Next step

Check where your decision rights are unclear: Decision Rights Health Check. It's free.

Take the Decision Rights Health Check

Want the full matrix ready to fill in? ClearAuthority Startup Decision Rights System, $49

Startup decision rights matrix: map hiring, contracts and other decisions beyond spending.
Who approves spending?: the 5-minute video.
Deep dive: setting one threshold.