TL;DR & What You’ll Set Up

You’ll configure who can raise POs, who can approve them, and how a purchase order moves from Draft → Awaiting approval → Approved → Billed. You’ll also learn the exact screens to use in Xero to create, submit, approve/send, or send back to draft/delete a PO, plus least-privilege role tips so you don’t overexpose financial data. For deeper patterns (multi-step routing, Slack/Teams approvals), see our Xero PO guide in Approveit.

• Xero PO lifecycle you’ll rely on: Draft → Awaiting approval → Approved → Billed.

• Who can approve POs: Adviser, Standard, and specific Invoice-only variants with Purchases access (details below).

• Core screens you’ll use: Business → Purchase orders (create/submit/approve), item lines, Reference, delivery details, and file attachments to the PO record.

• Important limitation: Xero lets you attach files to the PO record, but emailing attachments with the PO isn’t currently supported.

What Xero purchase order approvals look like (statuses, flow, and who can act)

Xero’s native PO process is straightforward. You create a PO in Draft, submit it for approval, and once Approved, you can email it to the supplier or convert it to a bill when the invoice arrives. Xero’s built-in statuses are Draft, Awaiting approval, Approved, and Billed, these drive your day-to-day filters and list views.

• Fast filtering matters: teach requesters and approvers to work from Business → Purchase orders filtered by Awaiting approval for quick triage.

• No native “Decline” button for POs: if a PO shouldn’t proceed, approvers typically return it to Draft with notes or delete it; there’s no separate “Decline” status in Xero’s business edition today.

Checklist before you start: roles, permissions, templates, and test supplier

Before you touch workflows, nail these foundations:

• Roles & permissions: Decide who raises vs approves POs. You’ll use Standard, Adviser, or Invoice-only (Purchases or Approve & Pay) with Purchases access.

• Branding & templates: Ensure your purchase order PDF layout has the right fields (PO number, Reference, delivery dates, etc.).

• Reference conventions: Standardize how you use the Reference field (e.g., project code, request ID) for reporting/search.

• Test supplier: Create or pick a dummy supplier so users can practice raising and approving POs end-to-end without emailing real vendors.

Set Up Roles, Permissions & Access

Choose who can raise POs vs who can approve them (Xero user roles & Purchases access)

In Xero Business edition, Standard and Adviser users can approve POs by default. For narrower access, use Invoice-only roles with Purchases access, and decide whether individuals should also have Approve & Pay privileges. Invoice-only (Purchases) can raise/manage purchases without broad ledger control; Invoice-only – Approve & Pay extends authority and visibility (including some sales areas), so grant carefully.

Practical split:

• Requesters: Invoice-only (Purchases) to create POs.

• Approvers: Standard or Invoice-only (Approve & Pay) for sign-off.

• Finance controllers: Adviser.

Least-privilege tips: “invoice-only + purchases” nuances and avoiding overexposure

Least-privilege protects sensitive data and keeps approvers focused:

• Prefer Invoice-only (Purchases) for project managers/site leads who only need to raise POs. It limits exposure to other modules.

• Be cautious with “Approve & Pay”: it grants broader capabilities across sales/purchases; reserve it for trusted approvers with policy training.

• Document a matrix: map amount thresholds, cost centers, and exceptions (e.g., capex, sole-source) to approver roles, then stick to it across entities. For multi-entity consistency, see [Connect Multiple Xero Organisations to One Approval Matrix] (how to keep one policy across several Xero orgs).

Configure Your Approval Workflow in Xero

Create a purchase order correctly (required fields, references, and attachments)

Go to Business → Purchase orders → + New purchase order. Add Contact, Date, Delivery date, Item lines (qty/price/accounts), and Reference (your internal code). Use tracking categories when relevant. Attach supporting files (quotes, SOWs) to the PO record so approvers see context. Note that Xero does not email attachments with the PO, store them on the record or share via your vendor portal.

• Reference discipline = faster audits: consistent tags (e.g., PR-1234 | Project Phoenix | Vendor RFP) make search, reports, and future 3-way checks quicker.

• Item-line accuracy reduces rework: ensure correct account codes, tax rates, and tracking on each line before submit.

If you want guided, chat-first capture (Slack/Teams) with automatic sync to Xero, our [Procurement Automation] blueprint shows how requesters attach quotes and pick coding with validations upstream.

Submit a purchase order for approval (single PO and batch options)

For a single PO, open the draft and click Submit for approval (or Approve if you have rights). Approvers work from Awaiting approval and action each PO. Xero’s native flow emphasizes individual review; if you need multi-step routing or consolidated approval in chat, use an add-on.

• Reality check on “batch”: Xero’s PO approvals are typically one-by-one from the list or document view. Teams that require multi-level or conditional approvals (amount/department) commonly add an external workflow layer. Our Xero PO guide shows this pattern in Approveit.

Approve, send, or decline changes: actions approvers take and what gets recorded

When reviewing Awaiting approval POs, approvers can Approve (moves to Approved), Email the supplier from the PO, or return to Draft/edit if changes are needed. There isn’t a dedicated Decline status, use notes + Draft (or delete) to halt a request. Every action updates the status and provides a traceable trail in the document history.

• Emailing POs: you can send the PO PDF to the supplier directly from Xero after approval; remember that attachments won’t go with that email (they remain on the PO record).

• Traceability tip: keep short notes on why a PO is sent back to draft (e.g., price variance, missing quote). It makes audits faster and avoids re-asking users.

High-impact bullets to remember

• Statuses drive control: Draft → Awaiting approval → Approved → Billed, train teams to work from filters first, not inboxes.

• Least-privilege is easy in Xero: use Invoice-only (Purchases) for requesters; reserve Approve & Pay for trained approvers only.

• Attachments live on the PO, not the email: add quotes/SOWs to the PO record; don’t rely on email attachments from Xero.

• Native approvals are single-step: for multi-level, conditional, or chat-native approvals, pair Xero with a workflow app. See our Xero PO guide for the recommended setup.

Day-to-Day Operations

Handling changes: editing, voiding, and deleting POs by status (what’s allowed)

In day-to-day purchasing, you’ll routinely need to tweak quantities, fix coding, or shut down requests that shouldn’t proceed. In Xero, the editing rules depend on the purchase order status. From Business → Purchase orders, open a PO and use Options → Edit to adjust headers or lines; you can also delete a PO that shouldn’t exist (e.g., raised in error). Xero’s guide on Edit or delete purchase orders is the canonical reference for which actions are available and where to find them.

When you need to “cancel” a PO that’s already in circulation, today’s Xero business edition does not provide a distinct Cancel status. The common pattern is to delete the PO or return it to Draft and annotate the reason in notes for your auditors. Xero’s community confirms there’s no separate cancel option at present, and many users have requested void/archive behavior in product ideas.

Operational tips that save time and rework

• Edit quickly from the status panels (Draft / Awaiting approval / Approved) to keep the queue tidy and visible to approvers.

• Prefer delete over silent edits if supplier negotiations changed scope materially, capture a short reason in notes for evidence. See Xero’s History & Notes audit listing to keep those breadcrumbs.

• If your policy insists on “no deletion,” use an external workflow where you can decline a request and lock it for record-keeping (see the Advanced Approvals section below).

If your team needs richer “void/close” controls while retaining a visible record, layer approvals in a specialized app and sync only fully approved POs to Xero (see Procurement Automation with Approveit).

From approved PO to bill: clean conversion for easy matching later

Once a PO is Approved, create the supplier bill directly from the order to preserve lines and references. In Xero you can copy a single PO to a bill (from Options → Copy to Bill) or select up to 25 purchase orders to generate bills in bulk, handy after a receiving cycle. Using copy to bill preserves coding and descriptions, improving 2-/3-way matching later.

If you track PO completion, use Mark as Billed (or unmark if needed) to reflect whether all related bills have been posted. This helps approvers and AP staff know if a PO is operationally “closed” even before month-end cleanup.

• Best practice: Always convert from the PO, not the supplier email inbox, so your bill inherits PO metadata and makes matching deterministic. For teams using multi-step approvals, Approveit supports the Copy to Bill flow while retaining a full approval trail.

For a deeper blueprint on how to structure matching, see Xero Purchase Orders: 2- & 3-Way Matching.

Find, filter, and evidence approvals: search, history, and audit trail basics

Approvers and AP need to find what matters fast. In Xero, use the built-in search to locate purchase orders by contact, reference, or amount; you can narrow searches to purchase orders only to avoid noise from invoices and credit notes.

For evidence of who did what, when, use Xero’s History & Notes view. It shows status changes, emails sent, and other activity against transactions, exportable when auditors ask for proof. Train your team to leave short, meaningful notes (e.g., “price adjusted per revised quote”) when returning a PO to Draft or when deleting it, so context is preserved.

Keep the list view clean: set default views and tabs so approvers land on Awaiting approval and finance lands on Approved/Billed to speed triage. (Xero periodically ships PO list enhancements, including default status pages.)

Advanced Approvals (When One Step Isn’t Enough)

When to introduce multi-step approvals (thresholds, supplier risk, DoA policy)

If your Delegation of Authority (DoA) includes amount thresholds, capex controls, or supplier risk flags (e.g., new vendor, no ABN, high spend category), a single-step approval in Xero is rarely enough. Introduce multi-step routing when:

• Spend exceeds pre-set thresholds (e.g., >$5k needs manager + finance).

• Transactions hit sensitive accounts (IT, marketing, legal) or project codes.

• New/High-risk suppliers or sole-source buys require extra scrutiny.

• You need a system-generated audit trail that maps 1:1 to DoA.

This is where an approval layer purpose-built for Xero shines.

Add Approveit for Xero: multi-level PO approval flows and audit trail

Approveit adds multi-step workflows on top of Xero, including amount-based routing, category/department approvals, and multi-approver logic, while syncing approved POs back to Xero. You can create POs in Approveit or pull them from Xero, route them through your matrix, and keep a tamper-evident audit trail for every decision.

• Why it matters: You get DoA enforcement without handing broad Xero access to non-finance staff, plus reporting and alerts if a PO gets approved directly in Xero outside the defined workflow (useful for fraud detection and exception monitoring).

• Matching & closure: Approveit also supports PO → Bill flows and marking POs as Billed automatically when matched bills are approved, keeping status tidy in Xero. 

Requester-only access without exposing Xero: raising POs via external workflow apps

Many organizations prefer not to give frontline requesters a Xero login. Instead, capture requests in a chat-first or web workflow with role-based forms and validations, then push only approved POs to Xero:

• Use Procurement Automation with Approveit to raise POs from Slack or Microsoft Teams, enforce coding, attach quotes/SOWs, and sync to Xero after approval (keeping requesters out of the ledger).

• Centralize connections and security in Approveit Integrations, OAuth, webhooks, and API settings designed for finance ops.

• For teams that want a dedicated PO workspace with pre-restrictions on who can raise what, Approveit supports requester restrictions and matrix-based approvals before syncing to Xero.

And for step-by-step visuals on the native path in Xero, keep Xero: Submit & approve purchase orders handy.

Rollout & Adoption

30–60 day rollout plan: pilot, training, comms, and cutover checklist

Weeks 1–2 (Pilot & configuration)
Set up your roles, approver matrix, and PO template. Pick 1–2 departments (e.g., IT & marketing) and a test supplier. If you’re adding Approveit, connect to a Xero demo org first to validate routing, PO→Bill conversion, and Mark as Billed sync. Build saved filters (Awaiting approval, Approved) and a saved search for your common fields (Reference, contact).

Weeks 3–4 (Training & change management)
Deliver 30-minute role-based trainings:

• Requesters: how to create POs (and what “good” looks like), attach quotes, and submit.

• Approvers: how to triage the Awaiting approval list, add notes, and return to Draft with clear guidance.

• AP/Accounting: copy to bill, partial receipts, and Mark as Billed hygiene to keep matching clean.

Weeks 5–6 (Cutover & stabilization)
Turn on the DoA policy organization-wide. Lock down “backdoor” paths (e.g., direct Xero approvals by non-finance) by adopting the external approval layer for all new POs; monitor exceptions where users still bypass the flow.

Cutover checklist

• Roles mapped and tested (requester vs approver).

• Saved views/filters pinned for day-one navigation.

• PO → Bill workflow dry-run complete, including bulk copy where relevant.

• Audit evidence path confirmed: History & Notes export and approval-layer logs

Success metrics to track: cycle time, exception rate, approval SLA, and rework

Define and publish a simple KPI panel visible to finance and operations:

• Cycle time (request → approval): median hours/days by department and amount bracket.

• Approval SLA: % of POs approved within the target window (e.g., 24–48h).

• Exception rate: % of POs returned to Draft or deleted; monitor root causes (unclear specs, wrong codes).

• PO→Bill fidelity: % of bills created from POs (not from email), and % of POs properly marked as Billed after final bill.

• Audit completeness: % of POs with at least one supporting attachment and a History & Notes entry at approval.

If you use Approveit, also track bypass alerts (documents approved directly in Xero), matching completion, and auto-mark billed coverage to keep the ledger clean.

Next Steps & Related Guides

• For full context on post-approval processing, read Xero Purchase Orders, 2- & 3-Way Matching explained.

• Want to keep requesters out of Xero? Start with Procurement Automation with Approveit and wire it to Xero after approval.

• For a native refresher, bookmarkEdit or delete purchase orders in Xero and Create bills from purchase orders.

High-impact bullets you can cite in policy & training

• You can bulk-convert up to 25 POs to bills, useful when reconciling multiple deliveries at once.

• There’s no dedicated “Cancel” status in Xero business edition; teams typically delete or return to Draft and document the reason.

• Mark/Unmark as Billed helps indicate operational closure of a PO and supports PO-to-bill matching hygiene.

• History & Notes provides an exportable audit trail for status changes and communications on transactions.