Split purchases to avoid approval are one purchase broken into smaller charges or invoices so each stays under the limit that needs a manager's sign-off. You find them by grouping card and payables data by vendor, flagging charges on the same or nearby days, and checking whether their combined total crosses the approval threshold.
Why do employees split purchases to avoid approval?
Employees split purchases to avoid approval because the approval is the only point where someone else looks at the spending. Under the limit, the purchase goes through on the employee's own say. Splitting can hide a personal purchase, a payment to a friend's company, or a legitimate buy the employee simply did not want to wait for.
The motive matters for the response, but not for the test. A manager who splits a laptop order to skip a slow approval queue has broken a policy. A buyer who splits orders to a company owned by a relative may be steering money to it. Both look the same in the data: several charges or invoices to one vendor, close together, each a little below the threshold.
Splitting is also a sign that a limit is set where it creates friction without control. If half the department splits orders to avoid one approver, the limit or the approval process may need fixing, as well as the behaviour.
The split purchase test: same vendor, close dates, just under the limit
The split purchase test groups transactions by vendor and by a short date window, then flags groups where each item is below the approval limit but the group total is above it. Run it on card transactions and on accounts payable invoices, because the same split can appear in either.
Steps for the test:
- Export the data: date, vendor or merchant, amount, cardholder or requester, and the approval limit that applied.
- Clean vendor names so "Delta Office Supply" and "DELTA OFFICE SUPPLY #22" group together.
- Choose a window, such as the same day, then a rolling seven days.
- Group by vendor, requester and window and total each group.
- Flag groups with two or more items, every item below the limit, and a total above it.
- Add a band test: items within ten percent below the limit, which are the most telling.
- Read the flagged groups with the invoices or receipts beside them.
Card misuse often shows the same habit on a smaller scale. Patterns of employee credit card misuse covers the card-specific signs that sit alongside splitting, such as weekend use and missing receipts.
A worked split purchase test on one quarter of card data
The worked example below runs the test on one quarter of card data for a department with a 1,000.00 per-purchase approval limit. The vendors, amounts and cardholders are made up for illustration.
| Group | Vendor | Cardholder | Dates | Items | Each item | Group total | Result |
|---|---|---|---|---|---|---|---|
| 1 | Northline Electronics | J. Ortiz | Feb 6 | 2 | 980.00, 975.00 | 1,955.00 | Flag: same day, both in band |
| 2 | Delta Office Supply | J. Ortiz | Feb 3 to Feb 7 | 3 | 310.00, 290.00, 265.00 | 865.00 | Clear: total under limit |
| 3 | Brightway Signs | M. Chen | Mar 11 to Mar 13 | 3 | 950.00, 950.00, 950.00 | 2,850.00 | Flag: equal amounts, in band |
| 4 | Fleet Fuel | Five cardholders | Whole quarter | 61 | 40.00 to 120.00 | 4,310.00 | Clear: routine fuel, many people |
Group 1 looks like one purchase of about 1,955.00 run as two. Group 3 is three equal charges in three days to a sign maker, which may be three real jobs or one job invoiced in parts; the invoices decide it. Group 2 has several items but never needed approval. Group 4 shows why the test groups by cardholder: fuel bought by five people is not a split.
The same thinking works for small cash. Repeated petty cash claims just under the amount that needs a receipt are covered in petty cash fraud.
When is a split purchase legitimate?
A split purchase is legitimate when the items really are separate purchases: different jobs, different delivery dates, different budgets, or a supplier that bills each shipment on its own. It is also acceptable when an approver agreed to the split in advance. Confirm with the invoices and the approver before treating a flag as a breach.
Honest reasons that come up:
- Separate orders for separate needs, placed on the same day because that is when the requests came in.
- Partial shipments invoiced as each one leaves the warehouse.
- Card limits set by the issuer that force a large approved purchase into two charges.
- Different cost centres paying for their own share of a shared order.
Record the reason on the flagged group when you clear it. Next quarter's test will flag the same vendor again, and a note saves the second review.
Split purchases a simple approval-limit test misses
A simple test misses splits spread across longer windows, across two cardholders, or across vendor names that belong to one supplier. It also misses splits between card and invoice channels, where half the purchase goes on a card and half through payables. Widen the test in each of these directions once the basic version is clean.
Ways to catch the harder cases:
- Longer windows. Rerun the test over 30 days for vendors with repeated flags.
- Two requesters, one need. Group by vendor and department instead of by person.
- One supplier, several names. Match vendors on tax ID, address or bank account before grouping.
- Card plus invoice. Combine card data and payables data into one list before grouping.
Splits that slip past every approval sometimes end in the bank account itself, where the payments are hidden in the reconciliation; bank reconciliation fraud explains how that concealment works. When the person splitting purchases is a trustee, director or other fiduciary, the question becomes whether they acted in the interest of the people they serve, which accounting for a breach of fiduciary duty addresses. A full extract of the bank and card statement lines, checked to foot by PreciseBankFlow, gives the test a complete population to start from.