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.