The Approval Lag Index: how a two-day sign-off becomes a cashflow problem

Quick answer

The Approval Lag Index: how a two-day sign-off becomes a cashflow problem explains what the change means for UK SMEs and how to turn it into a practical next step. The process is to identify the business decision, connect the data, then automate only the parts that improve speed or reliability.

Every business says it wants faster decisions. Then it lets purchase orders, supplier invoices, quote discounts and customer changes sit in inboxes for two days because someone needs to approve it.

Two days sounds harmless. It is not. It is the unit of delay that compounds across the whole company.

Welcome to the Approval Lag Index.

The hidden queue

Most SMEs do not have an approval process. They have a trail of emails, Teams messages, forwarded PDFs, verbal yeses, and one person who remembers who is allowed to approve what.

The approval itself takes ten seconds. The waiting takes two days.

Approval type	Monthly volume	Average delay
Supplier invoices	120	2.5 days
Purchase orders	45	1.8 days
Sales quotes with discount	30	1.5 days
Customer change requests	18	3 days

That is more than 200 small delays every month. No single delay looks serious. Together they become a drag on the operating rhythm of the business.

Where the cost shows up

Approval lag does not appear as a line in the P&L. It shows up as suppliers chasing payment, buyers missing early-payment discounts, sales teams waiting to send quotes, customers waiting for changed delivery dates, and managers spending Friday afternoon finding the person who was meant to click approve on Tuesday.

The expensive bit is not the approval. It is the silence before the approval.

The cashflow version

Imagine £180,000 of supplier invoices waiting for approval at any given time, with an average approval delay of 2.5 days. That delay blocks accurate cash forecasting, creates supplier noise and forces finance to manage exceptions instead of planning.

Now add sales quotes. If delayed approvals slow down £60,000 of quoted work by two days every month, the revenue is not lost, but the business feels slower. Pipeline meetings become guesswork. Customers experience friction. Salespeople learn to work around the system.

The fix is boring, which is why it works

A good approval workflow needs four things: a clear trigger, an approval owner, a time limit, and an escalation rule. Power Automate is often enough. The workflow can route the request, capture the decision, notify the requester and create an audit trail.

The goal is not bureaucracy. The goal is to remove the chase. When the process knows who needs to approve, nobody has to remember.

The one-week test

For one week, record every approval request and write down three timestamps: when it was raised, when someone first looked at it, and when it was approved or rejected.

If the middle timestamp is doing all the damage, you do not have an approval problem. You have a routing problem.