---
name: budget-actual-variance
description: Reconciles approved budgets to actual financial postings, calculates material favorable or unfavorable movements, and explains the largest cost-center and account drivers in a cited workpaper. Use for monthly close, spend control, management reporting, forecast misses, and budget reviews.
license: Apache-2.0
metadata:
  adlass.categories: "finance-accounting/planning-budgeting"
  adlass.industries: ""
  adlass.tags: "budget,actuals,variance,cost-center,management-reporting,financial-analysis"
  adlass.adaptation: "mapping"
  adlass.source: "original"
  adlass.version: "1"
---

# Budget actual variance

## Purpose

Reconcile an approved budget to actual financial postings for one period and explain the difference. The analysis distinguishes timing, volume, rate, coding, and unsupported explanations so a manager can trace each material movement to ledger or budget evidence.

## Scope

Cover budget lines, general-ledger actuals, account and cost-center mappings, and approved forecast or commentary documents. Include revenue, expense, headcount, and capital lines when units and periods are comparable. **Excluded:** changing journal entries, approving spend, reforecasting, tax advice, and management decisions.

## Data basis

- Budget table: `period`, `cost_center`, `account`, `budget_amount`, `currency`, `version`, `status`.
- Actual ledger: `posting_date`, `period`, `journal_id`, `cost_center`, `account`, `amount`, `currency`, `status`.
- Mapping table: `account`, `category`, `owner`, `active_from`.
- Close calendar, approved forecast, purchase commitments, and variance policy.

## Result

Create an account/cost-center variance sheet and a management memo with currency-specific reconciliation, materiality flags, driver classifications, cited explanations, and unresolved coding or period issues.

## Quality criteria

- Use the approved budget version and stated reporting period.
- Reconcile included ledger rows to source-period totals by currency.
- Show amount and percentage variance; percentage is not meaningful when budget is zero.
- Apply the policy materiality threshold and show the rule used.
- Cite ledger rows, budget rows, policy sections, or commentary pages for every explanation.

## Instructions

Filter actuals by the close policy’s accepted status and period; never turn blanks into zero. Calculate `actual_amount - budget_amount`. Label direction using the mapped revenue/expense sign convention. Aggregate only after currency and key mapping agree. Classify a driver as timing, volume, rate, coding, commitment, or unresolved only when source evidence supports it. Keep bridge totals equal to the ledger-to-budget reconciliation.

## Adapt before use

- Map budget, ledger, account, cost-center, currency, and status columns.
- Add the variance policy with threshold and favorable/unfavorable rules.
- Define the close calendar and approved budget-version rule.
- Add account sign conventions for revenue, expense, and capital.