Hello Arshad,
See below SAP help documentation to have an overview on both methods:
[Inline approval|http://help.sap.com/saphelp_srm50/helpdata/en/ee/8804050393ea4596330fe181092003/content.htm]
[Offline approval|http://help.sap.com/saphelp_srm50/helpdata/en/31/ec423b4ac8d506e10000000a11402f/content.htm]
Reports and customizing can be different depending on SRM version, but general concept remains the same.
Regards.
Laurent.
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