For start-up companies, financed by friends and families or angels, there should be limits on the ability of individuals to spend the company’s limited funds. There are no absolute levels that are right in all situations. Here is one set of limits for the approval of expenditures at certain levels:
|Up to $100:||any employee|
|Up to $1,000:||any manager|
|Up to $10,000:||any Vice President or Officer|
|Up to $25,000:||one Vice-President or Officer plus CFO or CEO|
|Up to $50,000:||CFO plus CEO|
|Over 50,000:||Board of Directors|
Entering into any contract requires the same approval levels based upon the expected cumulative expenditures over the life of the contract.