Outcome Based Budgeting

Overview

Traditionally budgeting by anything other than the code in the finance system is hard to achieve. Budgeting and Accounting Systems are in place that manage an organisation's financial management with rigour, accuracy and timeliness. In many cases finance systems can be very large and complex.

Conceptually it is easy to postulate that the chart of accounts be re-drawn to reflect objectives, or projects, but no Finance Director yet has considered that this structure alone would provide the Financial Management rigour necessary to keep Directors and Members out of jail.

Objectives, priorities, projects (even Service Level Agreements) all change far more frequently than a Chart of Accounts, or even an organisational structure. Constant changes to the Chart of Accounts are at best costly and at worst would create a critical risk to the Council’s financial management.

The need to retain organisational structure financial consolidations is viewed as being unlikely to go away. A simple step for integrating financial and performance management at the corporate and service level is the inclusion of service budget measures and data within the InPhase model. However finer granularity of information is required to provide the finer granularity of control needed to better manage the use of resources within each service, team, department and across multiple organisations.

It can provide a business with the ability for the resources used to achieve each identified objective, to be tracked. Three categories of resource costs are supported:

Expenditure by summary Chart of Account category, against each defined objective, entered at the applicable level, whether that is for a specific individual, a team, a service, a department, or a joint commissioning project involving multiple agencies, can be managed.

Capabilities

Three categories of resource costs are supported:

  • Direct Expenses
  • Staff Time and Costs
  • Asset Utilisation
  • Fully upported integrated time tracking to individual team member
  • Resource utilisation data capture
  • Automatic variance from budget alerting
  • Any type of expenses including third party expenditure
  • Any number of rollup and calculation paths

Typical Business Benefits

Such improvement in management information revolutionises the ability for an organisation to manage its improvements in:

The App also includes:

  • Efficiency
  • Effectiveness
  • Value for money

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