The approval status is used as a control mechanism to prevent orders that are not paid or without payment terms being shipped. In order to be able to dispatch an order, it must be “approved” in the system.
Orders that are fully paid are automatically approved. To approve an order you must either apply a payment to the order (so that the order will be automatically approved) or you must manually approve it and apply payment terms (eg: due 7 days from date of invoice).
For example, if you put an order on invoice terms, you can manually approve it to be paid later.
Orders that are not approved can be picked, but cannot be packed or dispatched. Only approved orders can be dispatched.