ABSTRACT
Managing budget is a complex mixture of applying clinical or technical skills with managerial and financial ones. One needs three main types of financial skills: interpretation, forecasting, and variance analysis. To manage budget successfully, one need not only knowledge of their budgetary control policy and responsibilities, but also the skills of interpretation, forecasting and variance analysis. Cost behaviour is a term used by accountants to describe the way in which different types of cost react to changes in activity. A persistent problem in NHS financial control has been year-end spending sprees. These happen when managers recognise that they are going to be significantly underspent at the end of the year and yet have no guarantee that they will be able to carry forward any of that money to the next financial year. Managers are frequently concerned if they change the service they provide in order to make a permanent saving they will lose the funding saved.
