The first thing to understand is that you are not the only person responsible for this budget. The local authority and your governors have a part to play, as do your leadership team, subject team leaders and support staff.

Financial planning and management is not a solo pastime and, as you will no doubt be discovering, it is now rare for a headteacher to do everything.

The nature, purpose and practice of headship are becoming much more complex, so the first lesson to learn is that you must have assistance.

Learn fast how the local authority puts together its budgets for schools.

Your local schools’ forum can help here. Find out who the secondary head representative is and speak to that person. What form of communication mechanisms does your local authority have for its heads?

More importantly, clarify exactly the roles of your governors. They have to approve the budget each year and should have detailed plans for any projectedactual carry-overs or deficits. Usually, governors delegate a large part of this responsibility to a finance sub-committee. How does this work? What do they expect of you? Maybe some or all of these:

* Clarity of management and administration roles in the school: who does what, when and how?

* A coherent planning cycle.

* Monitoring procedures that generate informative reports and spot trends.

* Suggestions for increasing income and reducing expenditure.

Most schools now have a bursarbusiness manageraccountant. If yours does not, talk this over with your chair of governors and finance committee. A sum of pound;4.1m needs professional management.

The two basic principles of financial management are: always try to increase income and try to reduce expenditure judiciously. At the planning stage, consider the financial effects of any decisions you take regarding curriculum design and delivery. Where does your school improvement plan say you want to be in three years?

Decisions that you make here will have many implications. Schools get into financial difficulties when they make improvement or curricular decisions without understanding their financial implications. Think of improvement and finance as a single unit so that each part of the plan is costed and resourced fully.

Similarly, a crucial piece of information at the planning stage is the number of bums on seats. The more pupils there are, the more money you will get.

Creative ways to increase pupil numbers range from intensive marketing to out-of-hours provision. How does your age- weighted pupil unit compare with your statistical neighbours? This is an example of benchmarking. It is helpful to know how your income and costs compare with other schools. This enables you to think about whether, for example, your expenditure on staffing costs is too high in relation to your income. (If yours is more than 80 per cent of your total budgetary expenditure, then have a close look at it.) Monitoring your budget is only as effective as the quality of information to hand. This requires a team effort. Decide on what information you need and when you need it. Understand what the governors will need from you.

Your school bursar will be of use to you here. It is fruitful if you meet to compare conclusions independently of each other’s work so that two “different” pairs of eyes are interrogating the data. This conversation should then produce further conversations between the two of you and members of the leadership team and subject team leaders in terms of their accountabilities.

The more you understand about financial management, the more you will be able to delegate others to manage and then support them in this.

Patrick McDermott is head of St Joseph’s Catholic college. He has been a head for 13 years and a teacher for 28. Do you have a leadership question? Email: susan.young@tes.co.uk