How to use the Budget Variance Analyzer.
State the sign convention when describing budget variance. Higher revenue and higher expense have different meanings, even when both produce a positive actual-minus-budget number.
Make the workflow fit your task.
Align budget and actual figures to the same period, category and accounting basis. State the subtraction convention, calculate absolute and percentage differences, and distinguish favorable direction for revenue and expense. Use supplied driver notes without inventing causes.
- What you provide
- Approved budget and actual figures.
- What you get
- Variance calculations with causes separated from hypotheses.
See the input and the result.
Illustrative input and output · a teaching example, not a live WebAct run
Example input
Expense budget USD 4,000; actual expense USD 4,500. Revenue budget USD 8,000; actual revenue USD 8,600.
Completed example
Expense variance: +USD 500, 12.5% over budget; unfavorable under this convention. Revenue variance: +USD 600, 7.5% above budget; favorable. Explain the drivers separately.
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Decisions and troubleshooting.
How should a percentage variance be reported when the budget is zero?
The ordinary percentage calculation is undefined. Show the absolute difference and explain the zero baseline.
Why is a positive variance favorable in one row and unfavorable in another?
Higher revenue and higher expense have different implications. Label the measure and interpretation instead of relying on the sign alone.
Try it with your own source.
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