While the goals of health systems financing can be expressed in various ways, there is a general consensus that it should not only seek to raise sufficient funds for health, but should do so in a way that allows people to use the needed services without the risk of severe financial hardship (often called financial catastrophe or impoverishment).1 This involves the accomplishment of two related objectives: (i) to raise sufficient funds and (ii) to provide financial risk protection to the population. These objectives can be achieved more easily if the available funds are used efficiently, highlighting the need for a third objective, that of efficiency in resource utilization. As a result, the financing system is often divided conceptually into three inter-related functions — (i) revenue collection, (ii) fund pooling, and (iii) purchasing/provision of services. Before focusing on measurement strategies and indicators for these functions it is important to understand their key components.