Calculate Budget vs. Actuals
A budget vs. actual analysis helps you understand the difference between budget and actual spending by showing you the granularity of each financial aspect of your company.Formula
Variance = (Actual - Budgeted) / BudgetedHow do I calculate the budget vs actual analysis?
In order to calculate budget vs. actual analysis, one should use the formula: Variance = (Actual - Budgeted) / Budgeted. This analysis can be done in either Sourcetable, and is a key function for a FP&A professional. This analysis compares a company's budget to actual results, and is a great tool to identify areas where a company is over or under budget.
What is Budget vs. Actuals Variance Analysis?
Budget vs. actuals variance analysis is a process of analyzing the magnitude of differences between actual amounts and what was budgeted.
What is the purpose of Budget vs. Actuals Variance Analysis?
The purpose of this analysis is to identify and explain any differences between the actual and budgeted amounts in order to make more informed decisions about future spending.
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Key Points
How do I calculate budget vs actual analysis?
Variance = (Actual - Budgeted) / Budgeted
Analyzing Variance
Budget to actual variance analysis is an important tool for finance and accounting professionals. It involves comparing actual results to the original budget to identify any differences and analyze why they occurred. This analysis helps to identify and address any potential problems or opportunities.
Gaining Insight
The results of the variance analysis provide valuable insight into the performance of the business. It is an important part of financial planning, control and decision-making, as it helps to identify areas for improvement and potential areas for cost savings.
Making Adjustments
Once the variance is identified, adjustments can be made to improve the budgeting process and adjust the budget accordingly. This helps to ensure that the budget is accurate and remains in line with the company's goals.
Monitoring Performance
Budget to actual variance analysis can also be used to monitor performance over time. By tracking the variance between the budget and actual results, it is possible to identify trends and areas of improvement or concern.
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