Just need a sanity check - we have a small custom workflow running on vendor bill approvals, although for now it is turned off. Is it not possible to change the Approval Status back to Pending Approval, once the bill has been approved? I've tested this by turning off the WF (as mentioned), created a bill pending approval, then manually set the bill as approved. However, I want to edit the bill change the approval status back to Pending Approval, but the field is now greyed out. Is this default behaviour ?

yes, that's the only way i've seen it. I imagine you can script around that, but natively you can't go back to pending approval.