My Financial Profile - MyFinPro.com
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The Budget Tip of the Day
Saturday, December 8, 2007
Today's Tip: Create a Variance Report
Paramount to the budgeting process is the creation of a variance report. When all is
said and done, a budget without any variance analysis is meaningless. What is a
variance report? A variance report is the difference between your initially budgeted
expense and the actual amount incurred. Essentially, it tracks how well you have
budgeted. To complete a variance analysis, simply compare your originally budgeted
expenses to the actual figures at month-end.
Creating variance reports are not as hard as you might think. Consider this example of
a simplified, yet effective variance report:
As you can see from the above Variance Report, this person was able to save $100
from their original budget for the month of January.
Have you downloaded the free budget yet? Our free budget spreadsheet is updated for
2008 and features a monthly account tracker and budget form!
Paramount to the budgeting process is the creation of a variance report. When all is
said and done, a budget without any variance analysis is meaningless. What is a
variance report? A variance report is the difference between your initially budgeted
expense and the actual amount incurred. Essentially, it tracks how well you have
budgeted. To complete a variance analysis, simply compare your originally budgeted
expenses to the actual figures at month-end.
Creating variance reports are not as hard as you might think. Consider this example of
a simplified, yet effective variance report:
As you can see from the above Variance Report, this person was able to save $100
from their original budget for the month of January.
Have you downloaded the free budget yet? Our free budget spreadsheet is updated for
2008 and features a monthly account tracker and budget form!
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