Key takeaways
- An owner who signs every document does not control the company more, but becomes a bottleneck and can review the important items less thoroughly.
- Start by counting the actual approval data, then set thresholds that give the owner time back while still covering most of the value.
- When small items are released, the owner must move from signing before payment to reviewing afterwards and reading reports.
The owner returns from a trip upcountry to find a stack of files waiting for a signature as high as the screen: paper purchase orders, air-conditioner repairs and contractor progress payments worth millions of baht, all mixed together. Staff are waiting, suppliers are chasing, and the owner signs without being able to read properly. The reason for not daring to let go is the fear of delegating to the wrong person, but signing without reading does not control anything in practice.
This article focuses on how business owners can move from signing everything to delegating authority. The structure of the approval authority table for a group of companies is covered on the Delegation of authority at group level page.
Count before deciding
Don't set limits by gut feeling. Pull the items the owner approved over the past 3 months and split them into limit bands. You will see at once that the time goes on small items, while the money sits in large ones.
Take a hypothetical example: the owner approves 1,000 items a month, totalling THB 40 million. A typical item takes 3 minutes. If the owner keeps only the large items and spends 15 minutes reading each one:
| Limit band per item (THB) | Number of items | Value (THB million) | % of value |
|---|---|---|---|
| ≤10,000 | 620 | 2.5 | 6.25% |
| 10,001-50,000 | 250 | 6.5 | 16.25% |
| 50,001-200,000 | 95 | 9.5 | 23.75% |
| 200,001-1,000,000 | 30 | 12.5 | 31.25% |
| Over 1,000,000 | 5 | 9.0 | 22.50% |
| Total | 1,000 | 40.0 | 100.00% |
If the owner keeps only items above THB 200,000, 35 items remain, or 3.5% of the count, yet they still cover 53.75% of the value. Approval time falls from 50 hours to about 8.75 hours a month, and each item gets five times more reading time.
Don't rely on limits alone
Some matters must still come back to the owner or the board even when the amount is small, because the risk lies in the nature of the transaction.
| Type of transaction | Reason |
|---|---|
| Out-of-budget items | It changes the plan rather than paying according to it |
| Transactions with relatives, directors or related companies | There is a conflict of interest |
| A new supplier, or a change of bank account number | A common point where fraud occurs |
| Long-term commitments or guarantees | The monthly amount is small, but the total obligation is high |
| Hiring and changes to key salaries | It is an ongoing fixed cost |
From signing first to reviewing afterwards
Before delegation
- Control through signatures
- Sees one document at a time, not the big picture
- Staff do not need to think, because the owner signs for them
After delegation
- Control through budgets, limits and reports
- Monthly after-the-fact sample checks
- Approvers are accountable within their scope
Four monthly reports are essential: budget vs actual, approvals listed by approver, items close to the limit ceiling that may have been split, and new suppliers.
An internal authority table does not change directors' authority as stated in the company affidavit, or the authorised-signatory conditions given to the bank for withdrawing funds. When adjusting the table, check that it is consistent with the articles of association, board resolutions, bank conditions and joint venture agreements.
90-day plan
- Days 1-30: Count the actual items and set the limits and the types of item that must go to the owner.
- Days 31-60: Trial it with one department. The owner does not sign items within the limit but reviews the reports every week.
- Days 61-90: Review the results, extend it across the company, and issue a single table approved by the board.
The fears to address
Owners who dare not let go usually have real reasons: for example, they have been defrauded, have seen a manager approve something wrongly, or are unsure whether the team understands the budget. This fear should not be answered by saying "trust the team", but with mechanisms: start with one department, limit the amount per item and per month, require a co-approver on risky items, and open the after-the-fact reports for review. Once the numbers show no problems, widen the scope.
Delegates must also understand what rights they receive and what additional responsibilities they carry. Delegating without giving them budget information makes them approve by guesswork. Show them the remaining budget balance, the procurement policy and examples of items that must be escalated. When in doubt, they should escalate one level, but if they escalate too often, it means the scope is still unclear or the delegate is not yet ready.
What the owner should do with the time regained is to review important items in greater depth, talk to major customers, review bank matters and think about the company's structure. If the owner gets time back and then goes back to asking about small items through other channels, such as asking about every item on LINE, the team will not dare to make decisions as before. Effective delegation therefore requires the owner's behaviour to change as well.
Next steps
- Pull the approvals from the past 3 months and split them by amount band and type.
- Set limits so the owner still sees most of the value while the number of items falls markedly.
- Define the items that must come back to the owner even when the amount is small.
- Set a rule against splitting items, and name a substitute approver for when the main person is absent.
- Adjust system permissions to match the table, so it is not enforced by instruction alone.
- Sample-check items within the limit every month, and review the limits once a year.