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5. Financial Management

Areas of Support

Figures 5a and 5b show the percentage of all organisations who have:

a) Used external support;
b) Have internal capacity; and
c) Anticipate future support needs;

In each of the specific financial management areas. The graphs are arranged in descending order of anticipated future support needs.

Figure 5a: External Support, Internal Capacity, Anticipate Future Support Needs

Figure 5b: External Support, Internal Capacity, Anticipate Future Support Needs

The main areas where organisations have used external financial management support are:

• Annual Accounts (41%)
• Payroll (33%)
• Insurance (20%)

The main areas where organisations have internal capacity for financial management are:

• Budgeting (64%)
• Management Accounts (58%)
• Cashflow management (53%)

The main areas where organisations anticipate needing future financial management support are:

• Annual Accounts (29%)
• Support for Trustees to understand financial management responsibilities (22%)
• Understanding how to cost your services, including systems such as full cost recovery (22%)

The most commonly accessed areas of financial management support are basic organisational requirements: annual accounts and payroll. Over a third of all organisations have accessed external support for these areas.

One of the major anticipated future support needs is that of helping trustees understand financial management responsibilities. This is similar to the findings from the focus groups and other core topic areas, which highlighted the need to increase capacity and understanding of roles and responsibilities in many boards and management committees.

There was little reported internal capacity or use of external support for understanding how to cost services (including systems such as full cost recovery) but this was one of the main anticipated future support needs. Reporting to OSCR also is a high priority for future support.

Internal Capacity & External Support Costs

Figure 5c shows that the cost of internal support for financial management is less than 10% of annual turnover for the majority of organisations.

Figure 5c: Internal Cost of Financial Management Support

Figure 5d shows the cost of external financial management support for each financial size of organisation. Unsurprisingly, larger organisations tended to spend more on external support than smaller organisations, with 70% of organisations with an annual turnover of £2m or more spending over £5,000 on organisational development support while 77% of the smallest organisations spend less than £500.

Figure 5d: Cost of External Financial Management Support

Figure 5e shows that the vast majority of financial management support is paid for, with only 13% of organisations reporting more than half of support being provided free of charge.

Figure 5e: Financial Management Support Received Free of Charge

Figure 5f shows that the vast majority (82%) of organisations reported that external organisational development support was providing value for money. Only 7% of organisations reported that external organisational development support had not been value for money.

Figure 5f: Value for Money External Financial Management Support

Figure 5g shows that financial management support is most commonly required either once per quarter (41%) or once per year (34%). The regularity of need for external financial management support is perhaps related to reporting requirements: for example, annual accounts and quarterly reports.

Figure 5g: How Often External Financial Management Support is Required

External Support Provision

The table below shows which agencies and organisations have provided external financial management support and the average quality score of that support.

* A list of specifically identified providers is presented in Appendix A

Almost 40% of participating organisations had used a private company for external financial management support, with very low reported use of public or voluntary sector providers.

Quality of support is rated highly across all providers. However, in contrast with other core topic areas, the public sector organisations tended to score higher on quality than the private companies, although this does reflect a much smaller number of responses.

There was a surprisingly low reported use of local CVS offices and SCVO for financial management, as many focus group participants said they used these organisations to mange their payroll.

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