ERP Systems financial management reports

| May 21, 2026

The disconnect between financial reports from ERP Systems and financial decision making

Organisations in the public sector mainly depend on their staff to achieve their service objectives. Hence resources should be allocated to develop the core skills of these staff to enable objectives to be achieved. This approach underpins HCM (Human Capital Management) strategies and forms a major part of developing and retaining staff who can assist in delivering the 3Es (Economy, Efficiency, Effectiveness). The ability to understand financial information and use if for decision making should be one of those core skills for anyone with financial responsibilities.

In this insight we focus on one of the key pain points of achieving positive ROIs on significant investments in ERP systems. How do we ensure that our ERP system financial management output information is understood and utilised by the end user for decision making. Where the end user is often a staff member without financial skills, e.g. a budget holder in a non-financial role. Set out below are the stages in the cycle, illustrated in the above image.

  1. ERP system produces financial management reports
  2. Accessed by end user, e.g. budget holders, managers, service heads, etc. (usually direct real time access to the system or via a finance team intermediary)
  3. End user review of data, and analyses
  4. End user understands, updates, takes action
  5. End user feeds back via updated outturns/forecasts
  6. End user takes action to control outcomes
  7. End user monitors effectiveness of actions with impact analysis from following month’s ERP financial management reports

The core skills development of staff is critical, and the temptation to cut these areas as part of a savings plan my prove counter-productive.

We are happy to share further insights or have a personal conversation, just contact info@hbpublications.com and/or visit our budget on track page, and consider providing support for budget holders.

Public Services at what cost? Insight 05

| May 14, 2026

Knowing the true cost of public services is essential to financial management

Financial management is not just about managing a budget, but also about managing true costs. Some services are easier to cost than others when the unit of service is clear cut, such as the cost of a placement. However, it is possible to attribute costs to all services related to productivity and output. It is only when such exercises are undertaken that true comparisons can be made and value for money established.

In this insight we identify the key stages that should be undertaken when establishing the cost of a service.

  • Understand the different types of cost incurred in the delivery of a service
  • Establish the unit of service most relevant to monitoring and control; comparisons and measuring value for money
  • Align the unit of service cost with pricing where relevant
  • Determine the most appropriate approach to calculating a unit cost most relevant to the nature of the service being delivered
  • Determine which costs should be considered an overhead cost
  • Determine how overhead costs should be allocated to services and incorporated into the unit cost

For example, providing care home services incurs a wide range of costs including property, equipment, staffing, supplies, maintenance, management, etc. These costs are different in type. Some are fixed, others variable, and some a combination of both. Within the definition of these, some costs can be controlled in the short term, whilst others are uncontrollable. The unit of service in this case is most likely cost per resident. This unit of cost can be compared in the market and can also be aligned with pricing (e.g. cost plus/minus). The most simplistic approach to calculating the unit cost per resident is to take the total cost of service provision and divide by number of residents that use the service. However, this may not be appropriate if there are vacancies; different levels of resident need etc. Some costing exercises can be complex. Overhead costs are always debatable as to their definition, content, and allocation.

The argument that it is not possible to cost certain services can be challenged If this approach is taken. It can drive the way financial resources are allocated, and financial management then moves away from just managing the money to managing the value for money.

Training all staff with budget responsibility is key to enabling smarter forecasting and more realistic outturns.

Costing and Pricing Public Sector Services is an easy read and provides even more insight.

#PublicSectorFinance #BudgetManagement #NonProfitFinance #FinancialLeadership #BudgetHolders

Forecasting Outturns should not be guesswork! Insight 04

| May 6, 2026

Financial forecasting is essential as part of managing budgets

Looking ahead each month should be part of any budget monitoring routine. It should consider what part of the budget has been spent to date, how much budget remains; and is there sufficient budget to cover the future planned expenditure to the end of the year? The answers to the first two questions should be straight forward and available from the financial management systems. Regardless of the ERP/software being used, a report should be able to provide the spend to date and budget remaining. The first issue may be, is the spend to date accurate, complete, and up to date? (See future insights on commitment accounting). The topic of this insight is “future planned expenditure”. This is effectively a forecast, and it is required to “project the outturn”, that is how much will be spent by the end of the  year.

The future forecast is likely to change each month due to internal and external factors. In month one, eleven months need to be forecast to calculate the end of year outturn. By month 10, only 2 months forecast is required, and the outturn should be more accurate.

Forecasting is not guesswork, neither should it be a mathematical calculation. Some organisations still divide a budget by 12 assuming the same expenditure each month, taking no account of the internal and external environment affecting expenditure. The forecasts for the end of year often bear no relation to reality, and hence “shock” when budgets are over or under spent at the year end.

Whilst the future cannot be known, the forecast can be based on assumptions that take account of what has happened in the past, and the likelihood of planned expenditure being greater or less as a result of all known internal and external factors. Each month the forecast assumptions should be reviewed and updated to take account of what actually happened. This continued adjustment will enable the outturn to become more realistic each month and enables quicker and smarter decision making.

Training all staff with budget responsibility is key to enabling smarter forecasting and more realistic outturns.

Finance for Nonfinancial Public Sector Managers is an easy read and provides even more insight.

#PublicSectorFinance #BudgetManagement #NonProfitFinance #FinancialLeadership #BudgetHolders

Insight 03 – 5 Warning Signs Your Budget Is Heading for an Overspend

| April 29, 2026

Overspending does not happen on its own!

Spending has a causal factor. Expenditure is created as a result of the organisation agreeing to pay for something, whether it be staff, products, services, contracts, etc. The expenditure takes place as a result of either a plan, or a need that needs to be fulfilled. The driving force may be demand, desire, or direction.

Regardless of the type of expenditure, revenue or capital; statutory or non-statutory; it is important to know when expenditure is going to exceed the budget, and by how much. The sooner this is known the more likely an organisation can take corrective or mitigation actions in the short term. In the longer term there may be a need for structural change or realignment of resources.

In order to assist in gaining this foresight, we identify 5 warning signs your budget is heading for an overspend.

  1. Negative variances are consistent each month against a profiled budget
  2. Expenditure is being made against items not budgeted for (e.g. zero budget allocation to that area of spend)
  3. Committed expenditure not being fully accounted for
  4. Invoices arriving without purchase order references (i.e. no purchase order raised)
  5. Stakeholder influence diverting from plan and budgets

Projecting the outturn every month will help to crystalise the warning signs and help to prompt action.

All five areas and much more are covered in our training and publications.

Look out for another insight about how to ensure outturn calculations are as meaningful and accurate as possible.

Training all staff with budget responsibility is key to enabling warning signs to be noticed.

Managing the Devolved Budget is an easy read and provides even more insight.

#PublicSectorFinance #BudgetManagement #NonProfitFinance #FinancialLeadership #BudgetHolders

Why Budget Monitoring May Fail — Even When Reports Are Accurate

| April 23, 2026

Series 1 – Insight 02

Budget monitoring is not a tick box exercise.

Most organisations produce budget monitoring reports of one kind or another. They may be directly from the accounting system or prepared on a spreadsheet. The reports should be designed to assist users and hence tailored to suit organisational needs.

Regular budget monitoring should be fundamental to the role of any staff member with budget responsibilities. Budget monitoring actions are important routines and include:

  • Checking reports are complete and up to date (transactions processed accurately)
  • Checking all budget changes (virements) have been made
  • Understanding the budget profiles – even if not reflected on the report
  • Variance analysis – by value and percentage
  • Understanding budget drivers and reasons for variance
  • Projecting outturns
  • Progressing to budget management and control actions

Training in each of the above will enhance budget monitoring and yield better results.

Ultimately budgets need to be monitored to ensure the financial resources used are delivering the organisation’s objectives. If not, action needs to be taken.

Managing the Devolved Budget is an easy read and provides even more insight.

#PublicSectorFinance #BudgetManagement #NonProfitFinance #FinancialLeadership #BudgetHolders

Financial Management Insights for the public and nonprofit sectors

| April 15, 2026

Series 1: Insight 01 – How to set a budget

HB Training and Publications International is releasing a series of insights to assist with financial management in the public and non profit sectors. We are well placed to share our experience and expertise in the field. One of the directors is currently completing her PhD in public sector financial management this year.

These insights will take a topic, or part of a topic, and provide a sound bite for anyone interested in improving their skills and underpinning knowledge in the areas of budgeting, budget monitoring, and control. They are not meant to be comprehensive but should enable budget holders and managers consider the benefit of learning more about these topics.

How to set a budget

There are several budget setting techniques that can be applied to both expenditure and income budgets. They can be used independently or combined depending on the type of budget being set. The most popular techniques include:

  1. Incremental Budgeting
  2. Zero Based Budgeting
  3. Cash Limited Budgeting
  4. Resource Restricted Budgeting
  5. Activity Based Budgeting
  6. Contingency Budgeting

Each have their advantages and dis-advantages. It is worthwhile reviewing our article “6 Budget Setting Techniques – Explained”.

This insight promotes the most important aspect of budgeting is knowing the “assumptions” made in the production of each budget line. This may be as simple as the incremental approach of assuming last years budget plus inflation will be a reasonable budget for the future years. Or it may be more complex, using scenario planning and demand profiles. In any event many budget holders receive budgets without the assumptions upon which they are based, and are then expected to control them.

Whoever develops the budget (ideally the budget holder/owner) should have a record of their assumptions such that all budget users understand the underlying objectives for the use of that budget. We would recommend the more detailed the assumptions the better, as these will underpin budget monitoring and enhance the decision making process for budgetary control.

For further insights or for more information on budgeting for the public and non-profit sectors contact us at info@hbpublications.com.

6 Budget Setting Techniques – Explained

| March 17, 2026

Introduction

The key to effective budgetary control is the budget setting process. Budgets should accurately reflect the service being provided and there are a number of budget setting techniques that can be applied to both expenditure and income budgets. They can be used independently or combined depending on the type of budget being set. The crucial techniques include:

  1. Incremental Budgeting
  2. Zero Based Budgeting
  3. Cash Limited Budgeting
  4. Resource Restricted Budgeting
  5. Activity Based Budgeting
  6. Contingency Budgeting         

Incremental Budgeting

This technique relies on using an historic base as a starting point for budget setting. This is often the budget or the actual figures for the previous year, or some combination of the two. The base is then used to formulate the budget for the following year by taking each budget heading and either adding or subtracting an inflation factor from the base figures and adjusting for other known factors such as savings or approved growth.

Advantages

  • Simple
  • Quick
  • Accurate, if little change in activity

Dis-Advantages

  • Historic
  • No account taken of necessary future changes
  • Assumes the base is accurate
  • Compounds historic errors

Incremental budgeting is best used for certain items of expenditure which are unlikely to change from year to year. For example, when staffing remains constant, salaries can be budgeted for incrementally where the increment reflects the pay award, or in the case of fixed price contracts there may be an agreed annual inflation rate.

Zero Based Budgeting

This approach to budget setting is most strongly recommended as it is linked to the business planning process. The zero based budget assumes that all budgets are derived from first principles and that the organisation can start with a blank piece of paper; a zero base. They are based on the objectives to be achieved for the period without necessarily referring to the past.

Advantages

  • Pro-active and forward looking
  • Realistic and accurate
  • Links into business plans

Dis-Advantages

  • Time consuming
  • Requires clear objectives
  • Many organisations cannot begin with a zero base as they have committed expenditure on existing staff, buildings and contracts, which they are obliged to continue, at least in the short term.

It is generally considered the advantages of zero based budgeting outweigh the dis-advantages. Where possible, zero based principles should be adopted, even when in most instances an organisation will not have a totally zero base to begin with. 

Cash Limited Budgeting

This technique is appropriate when the service area is given a set limit on its total net expenditure. The service manager then has to determine what can be delivered within this cash limit and create a budget accordingly. This technique can prove difficult if the service objectives give targets on output without reference to the practicality of meeting those targets within a cash limit. The approach to be used in the case of cash limited budgets is to identify the costs that are fixed, i.e. those that cannot be reduced, and then to spread the balance of the budget across those items which are variable and have an element of flexibility.

Advantages

  • Clear parameters on expenditure
  • Quick – negotiation limited
  • Incentive to make savings to bring expenditure in line with cash limit

Dis-Advantages

  • Services may have to decrease quality or quantity (or both) in order to stay within the cash limit
  • Not necessarily linked to business objectives which may include a need for change or development
  • Assumes there is sufficient flexibility in the budget to operate within an overall cash limit
  • Inflexible – not practical for demand led/statutory services

Resource Restricted Budgeting

This type of budgeting occurs when resources to be utilised by the service are restricted. Resource restriction will typically relate to:

  • Staff
  • Equipment
  • Property
  • Finance
  • (the cash limited budget is a form of resource restricted budget)

There are often many reasons why resources need to be restricted. For example, it may be necessary for the benefit of the whole organisation to restrict staff numbers. This action may be required because recruiting an additional full time member of staff represents an on-going future commitment which the organisation may not be able to sustain. Hence, restricting the staffing resource is a common budget setting approach.

Advantages

  • Clear parameters on expenditure
  • Quick – negotiation limited
  • Organisation maintains strong control over its resources

Dis-Advantages

  • No consideration of the practical impact of restricting resources and the effect on services
  • Not linked to business objectives which may include a need for change or development
  • Inflexible – not practical for demand led/statutory services

Activity Based Budgeting

The organisation using this approach sets budgets based on the cost of providing each area of activity. If the budget has to be reduced, each activity should be examined, and decisions made as to which should cease or reduce accordingly. This method of budgeting is only possible if there are clear divisions between each activity, and where resources can be separately allocated. Where resources are shared (such as staff, premises, etc.) the scope for activity based budgeting is more difficult. It then relies on accurate resource allocation methods, such as time charging by staff, allocating square footage, and utility usage, etc. to individual activities. 

Advantages

  • Resources clearly matched to service provision
  • Forms a base for unit costing
  • Highlights which are the most expensive activities

Dis-Advantages

  • Resource allocation may not be accurate
  • Can be complex to calculate as detailed work needs to be undertaken to isolate each activity and the resources consumed
  • Not practical for services where a flexible approach needs to be taken and where resources need to be moved between activities in response to demand

Contingency Budgeting

This budgeting technique is sometimes seen as “a broad brush” approach. Limited effort is used to establish detailed estimates for each of the budget headings as a contingency amount is provided to take account of poor estimates, changes in demand, and insufficient resources. The contingency may be used flexibly across any of the budget headings. The level of the contingency will depend on an estimation of the risk of error within the budget. If it is considered that the budget has been calculated to an accuracy level of 80%, then a 20% contingency may be added to the budget.

Advantages

  • Quick
  • Easy
  • Flexible

Dis-Advantages

  • Inaccurate; open to guess work
  • Insufficient thought given to linking service with finance
  • Will be difficult to monitor

What Next?

One of the keys to budget setting is to understand the budget drivers of the service or activity being undertaken. These are the input elements that drive the expenditure or income, and hence the budget. Understanding budget drivers enables budget holders to begin the creative thinking and implement control.

Using the correct budget setting techniques is crucial for setting realistic budgets. Learn more about the above with illustrated examples by reading our book, “Managing the Devolved Budget”.

WHAT BUDGET HOLDERS NEED TO KNOW

| March 12, 2026

Effective financial management, budgeting and control should underpin the operations of all public sector and nonprofit organisations. The reason being that they are responsible for public funds, and need to ensure value for money.

In the current environment public sector budgets are being challenged to deliver more for less. This requires all those tasked with spending public funds to take ownership of their budgets and be accountable for their use. Many budget holders are skilled professionals in specific disciplines but may not have any knowledge or experience in being responsible for a budget. This increases the challenges faced in ensuring public funds are managed and controlled.

Often training and development budgets face constraints which result in only “essential” training being funded and delivered. We consider that finance training should be in that category, but often it is not. There are many areas that we consider that anyone responsible for a budget at any level should be fully conversant with and form part of their underpinning knowledge.

What Budget Holders Should knowKnowledge requirement
How to set a budgetUnderstanding budget drivers; costing and pricing; budget setting techniques such as incremental and zero based budgeting; organisational financial regulations such as authorisation levels and procurement rules; the budget setting timetable; etc.
How to monitor a budgetUndertaking variance analysis, projecting outturns, using service data to monitor costs (productivity) as well as budgets, understanding budget profiles, accessing financial reports, etc.
How to control a budget (budget management)Taking action to correct variances; applying cash limits; using virements; using exception reporting; analysing service data; checking commitment levels; calculating value for money; matching budgets to output objectives; reforecasting; updating outturns to monitor impact; etc.
How to read and understand financial reportsDepending on the role, budget monitoring reports; financial accounts; expenditure reports; income reports; service provider contracts; etc.
How to work with finance teamsUnderstanding financial terminology; financial timetables for reporting; key financial assumptions for budget setting; designing financial reports to assist monitoring and control; making journal adjustments and virements; year-end accruals; etc.

Although we refer to budget holders, we consider that anyone who has a role in spending money or raising money should have this knowledge, regardless of job title.

Our experience is that some staff are promoted to senior management positions without having this underpinning knowledge. Having not addressed the knowledge gap, earlier in their career, it becomes difficult to raise the issue as a learning need. This sometimes leads to an over-reliance on finance departments who cannot manage budgets without service input.

Learning Management Systems (LMS) offer a great opportunity to provide effective e-learning courses covering these areas. We offer a range of SCORM 1.2 compliant courses with standard modules which can be customised on request. These can be integrated with an inhouse LMS allowing access to all relevant staff. We have more information available in our 5 minute video on this link https://www.youtube.com/watch?v=EJtpp3cq2zY

Practical Budgeting & Financial Management Training

| February 24, 2026

Are your managers under pressure to deliver services while also controlling budgets, forecasting spend, and explaining variances—without being finance specialists?

Across local government, the NHS, housing, charities, and public bodies, financial pressures are intensifying. Rising costs, tighter funding, and increased scrutiny mean there is less room for error than ever. Yet in many organisations, budget responsibility sits with non-finance managers who have had little or no formal financial training.

That’s where HB Training & Publications International can help.

We are now taking bookings for our half-day virtual training courses designed specifically for budget holders, service managers, and non-finance leaders who need practical, usable financial skills—fast.

What Your Team Will Gain

Our training focuses on real-world challenges and delivers immediate impact. Participants will learn how to:

  • Understand budgets and financial reports with confidence
  • Improve in-year budget monitoring and forecasting
  • Identify and manage risks earlier
  • Explain variances clearly to finance teams and senior management
  • Strengthen budget ownership and financial accountability
  • Make better decisions using financial information

This is jargon-free, practical training based on real public and non-profit sector experience—not generic private-sector theory.

Proven, High-Impact Training

Participants consistently rate our courses highly:

“The content was brilliant – clear, practical and easy to follow.”
“The exercises really helped bring the learning to life.”
“The length of the course was ideal – focused and not overwhelming.”
“Professional, knowledgeable and engaging throughout.”

Flexible, Easy-to-Book Format

Our half-day virtual courses are designed to fit around busy workloads, making it easy to upskill teams without taking them away from service delivery for long periods. Courses can be booked for individuals or tailored for teams and organisations.

Want Ongoing Support, Not Just Training?

Alongside our courses, we also offer our Budget on Track service—providing practical, ongoing support to budget holders throughout the financial year. This helps organisations move from reactive firefighting to proactive financial management, with stronger forecasting, earlier intervention, and better financial conversations across the organisation.

Book Now or Enquire Today

If your organisation wants to:

  • Improve budget control
  • Reduce the risk of overspends
  • Build financial confidence among non-finance managers
  • Strengthen in-year financial management and governance

Now is the time to act. For dates:

🌐 Visit: https://hbpublications.com/services/budgeting-courses-and-finance-training/

Places are limited, and dates fill quickly—get in touch today to secure your place or discuss a tailored programme for your team.

📩 Contact us: info@hbpublications.com

Key Financial Management Challenges

| February 16, 2026
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Many public sector and nonprofit organisations continue to face key financial management challenges.

Tight budgets, rising service demands, and greater scrutiny mean finance teams and budget holders must work more efficiently and confidently than ever. Below are some of the most common challenges we see across the sector:

IssueDescription
Overspend RiskBudget pressures often arise from limited forecasting skills, delayed financial information, or lack of confidence among budget holders.
Weak Internal ControlsInconsistent processes and unclear responsibilities increase the risk of errors, non‑compliance, and governance concerns.
Audit FindingsRecurring audit issues highlight deeper gaps in skills or processes, particularly around documentation, controls, and financial accuracy.
Poor Budget MonitoringMany managers struggle to interpret financial reports, leading to reactive decisions and late identification of variances.
Grant Reporting IssuesManaging restricted funds and meeting funder requirements can be complex, especially when multiple grants are involved.
Skills Gaps in Finance TeamsBoth finance and non‑finance staff often need support to build confidence in budgeting, financial management, and internal controls.

These challenges are widespread, but they are also highly manageable with the right training, tools, and support.

Next Steps…..

At HB Training and Publications, we specialise in helping public sector and nonprofit organisations strengthen financial management through practical finance training, assessments, and support services such as our unique Budget on Track. Whether you need to improve budgeting, reduce audit findings, enhance internal controls, or upskill your team, we can help.

Get in touch today to discuss how we can support your organisation’s financial awareness, skills and development. Just email us at info@hbpublications.com and we will be happy to have a no obligation chat.