Tag Archives: #budgeting

Zero Based Budgeting – when to use it and when not!

| June 4, 2026

It is important to understand the definition of Zero Based. As described it assumes that the budget can be developed from first principles, with a clean sheet, as if from a new starting position. This allows for complete alignment with the objectives for the activity/service, along with freedom to decide the best possible approaches. Sometimes, in the public sector there is often a base from which the budget setting process has to begin. For example, staffing, (or staffing constraints), accommodation, location, etc. ZBB must be put in the context of the environment and not looked at in the purist form. It does however remain a very good approach in many areas, such as a new service or aspect of a service; a new project; a new approach; and so on. ZBB is also very useful as a “reset” to existing services and projects, particularly where they do not deliver the outputs required within a budget allocation. Some public and nonprofit sector organisations often find themselves facing numerous constraints restricting the

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

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. 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

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. Projecting the outturn every month will help to crystalise the warning signs and help to prompt action. All five areas and much more

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: 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: Each have their advantages and dis-advantages. It is worthwhile

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: 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 Dis-Advantages 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

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

Key Financial Management Challenges

| February 16, 2026

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: Issue Description Overspend Risk Budget pressures often arise from limited forecasting skills, delayed financial information, or lack of confidence among budget holders. Weak Internal Controls Inconsistent processes and unclear responsibilities increase the risk of errors, non‑compliance, and governance concerns. Audit Findings Recurring audit issues highlight deeper gaps in skills or processes, particularly around documentation, controls, and financial accuracy. Poor Budget Monitoring Many managers struggle to interpret financial reports, leading to reactive decisions and late identification of variances. Grant Reporting Issues Managing restricted funds and meeting funder requirements can be complex, especially when multiple grants are involved. Skills Gaps in Finance Teams Both finance and non‑finance staff often need support to build confidence in budgeting, financial management, and internal controls. These challenges are

Budget on Track

| February 12, 2026

Keep budgets under control and meet financial targets Budget on Track is our service to support budget holders, managers, and financial decision makers in the public and non-profit sector. If controlling budgets is important for your organisation, it requires all budget holders at every level to meet their targets, whether that be savings, or just not overspending. Sometimes they will need help. Budget on track is more flexible than a training course, but more cost effective than a personal consultant. It provides bespoke answers to questions when they are needed. Subscribers to Budget on Track are able to email their personal budget mentor (PBM), who is there to support them. It can be any kind of budget, revenue or capital or income. Our subscribers can ask simple or more difficult questions and receive some assistance. It may be help with financial planning, budget setting, variance analysis, budgetary control, more for less, statistical analysis, management reports, or something else. We are experts in delivering financial training courses, but often participants have