Cost object approval strategy

Cost objects can be used determine the approval flow for travel, expenses or invoices. 

For travel, you can choose to send all travel requests to the cost object approver as part of the travel approval process. 

For expenses and invoices, you can choose a standard Perk approval strategy or create a custom workflow built with the workflow designer. If you use hierarchical cost objects, approval can be escalated up to parent cost object approvers.

Cost object approval in travel

Often travel requests go straight to your direct manager. However, you can set the approval rule so that the cost object determines who signs off on the trip instead.

When you set up your cost objects, you simply assign a specific person as the approver for that cost object. If an employee chooses that cost object during checkout, Perk automatically routes the request to that cost object owner rather than their usual line manager.

For example, Company A has two main departments: Sales and Marketing.

  • Sales budget is managed by Jo Smith.

  • Marketing budget is managed by Alex Macdonald.

If the company sets up their travel approval process to use cost objects, the approval routing changes based on the department being charged:

  • Sarah works in Sales, but she’s traveling to help with a Marketing event.

  • When Sarah books her trip, she selects the Marketing cost object.

  • The approval request goes directly to Alex Macdonald (the Marketing lead) because she owns that cost object, skipping Sarah’s usual manager entirely.

You can set up a travel delegate, which allows you to temporarily transfer approval rights to someone else while you're out of office.

Cost object approval in expenses and invoices

In expense processing and invoice processing, you can set up complex approval flows depending on how your cost objects are set up:

  • Non-hierarchical: only a single approval
  • Hierarchical: may involve multiple approvals depending on approval limits, as approval is escalated up the structure

Expense and invoice approval with non-hierarchical cost objects

Each cost object has a default approver who is responsible for approving all expenses or invoices submitted against this cost object. When an expense or invoice is submitted with this cost object, the person selected in the Approver field is responsible for approving the expense/invoice before it is reviewed by financial reviewers.

If the approver is the same as expense or invoice submitter, by default, the document is automatically approved (unless you have set up a custom workflow to escalate approval to another user).

For example, when Sarah (from Sales) submits an expense for a Marketing banner she bought, Perk sees the "Marketing" cost object and sends the expense straight to Alex. However, if Alex buys something and tags it to her own Marketing budget, Perk knows she’s already "approved" it. It will skip the approval step and go straight to Finance (unless your company has a custom workflow to prevent this).

You can delegate any approvals for the cost object to another person temporarily by selecting that person in the Delegate field. You can do this either in Settings > Cost management > Cost objects (if you are an account admin) or in Spend > Approvals > Cost object approvals (for approvers). 

You can also set an expiry date. After that date, cost object approval goes back to the original approver.

Expense and invoice approval with hierarchical cost objects

Cost objects can have a parent-child relationship, with up to 5 levels. This determines how the approval is handled in those cost objects, automatically escalating any expenses or invoices to the person responsible for the parent cost object where the expense or invoice exceeds a certain threshold.

In hierarchical cost objects, you determine:

  • parent-child relationship
  • default approver 
  • approval limit

The approval limit determines the maximum point after which the cost object’s parent object determines the person to approve the expense or invoice. In other words, approval is escalated up a level, to the parent cost object’s owner for approval, according to a four-eyes principle.

For example, if a person in Cost Object 1A submits an expense report, it requires approval from the head of a cost object.

If the expense report exceeds the approval limit for the head of Cost Object 1A (e.g., CHF 1,000), the expense report requires additional approval from the head of the parent cost object, in this case the head of Cost Object 1.

If the expense report has been approved by the head of Cost Object 1A because the expense amount of the expense report was below CHF 1,000, the head of the parent cost object doesn’t need to sign off on the expense. In this example, there are only 3 hierarchical levels, but the cost objects can be set up with up to five levels where complex approval flows are needed.

The top-level cost object is not applicable in all approval flows, but is necessary for the technical setup. The top-level cost object can be set as invisible for all people, if needed. In other words, you don’t assign it to anyone as a default cost object.

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