Explanation of finances in FM14: Help needed to understand

I've taken a low level job in South Africa. I see there is a transfer budget and a payroll budget.

I'm guessing the payroll budget is the "salary cap" for the team and the weekly salary of all my players cannot exceed that amount. Is that correct?

Now, the transfer budget is obviously for paying players to transfer to your team. A few questions.

(1) Are these players that transfer from other clubs?

(2) Is this money you pay for the players salary or that you pay to his parent club?

Also, how do I free up more money? The team I took over has like 9 players and are already at the payroll budget (budget is 26,000 and payroll is 26.06) but it looks like I can offer some players that my scout is referring to me. So I'm lost in this part of the game.

Any other clarification on the financials would be helpful to me as a new player.

I'll give you a general explanation of these terms. Transfer budget is money the board allows you to spend on buying players from other clubs. This means that you pay another club for the right to own the player, that is make the player train and play for you. The payroll budget is how much money the board allows you to spend on paying the players' salaries. So transfer budget and payroll budget are different from each other, but what the two have in common is that both budgets are provided by the board of your club, which is a bunch of people who make decisions about club spending, hiring, etc. I hope this isn't too basic for you, I just had a feeling that there might be quite a lot of things for you to learn.

You can exceed your payroll budget, but the board might not like it depending on how frugal they are and how much you are exceeding it by

And also of course this might put you in financial difficulty some time later

If you do exceed your payroll budget you'll find that the salaries you are able to offer will drop dramatically aswell. My current club can usually offer a max salary of £850 p/w, for example, but since i'm over my budget that has dropped to £210 p/w which makes it a big problem to sign anyone decent.