Variance Analysis.
Variance analysis compares actual results with budget, forecast and last year, and explains the differences in terms management can act on: volume, price, mix, cost rates and timing. We separate one-off and timing items from real changes in performance, so attention goes to the variances that matter.
Typically issued within 3–5 working days after the books for the period are closed; the first cycle takes longer while thresholds and data feeds are set up.
A partner — a chartered accountant or company secretary — from the first call to sign-off.
Based on your situation, and fixed in writing before any work starts.
Is this for you?
- Companies with an approved budget that is not being tracked
- Businesses where margins are moving and the reason is unclear
- Boards and investors that expect explanations of budget variances
What you receive at the end.
- 01Budget-versus-actual statements for the period and year to date
- 02Price-volume-mix bridge for revenue and gross margin
- 03Written commentary on variances above threshold
- 04Action tracker with owners and dates
- 05Updated full-year outlook, where reforecasting is in scope
Variance Analysis, step by step.
Typically issued within 3–5 working days after the books for the period are closed; the first cycle takes longer while thresholds and data feeds are set up.
- 1
Set thresholds
We agree materiality thresholds, by amount and percentage, so commentary concentrates on significant variances.
- 2
Compute variances
Each month or quarter we compare actuals with budget, the latest forecast and the prior year, at line-item and segment level.
- 3
Analyse drivers
We split revenue and cost variances into volume, price, mix and rate effects, and identify timing differences and one-off items.
- 4
Management input
We discuss major variances with department heads to confirm causes and agree corrective actions.
- 5
Report and track
We issue the variance report with commentary and an action list, and follow up the actions in the next cycle.
What we need from you.
Don't have everything yet? We send a short checklist after the first call and work with what you have.
- Approved budget and any reforecasts
- Trial balance and management accounts for the period
- Sales volumes, prices and product or customer mix data
- Payroll and headcount by department
The fee depends on your situation. After a short call, the partner who will do the work tells you what's involved and gives you a fixed fee in writing — before any work begins.
- Government fees and statutory charges are billed at actuals.
- When you pay — upfront, in stages or on completion — is agreed in writing with the fee.
Questions about Variance Analysis.
Ready to discuss Variance Analysis?
30-minute confidential call — no proposal, no commitment. A partner will write back within one business day.