Budget vs. Actuals (BvA)
aka Variance Analysis
Budget vs actuals is the process of comparing your “actuals” (from your accounting system), to the budget/forecast that was set before the period began. There are several key parts to the process:
- 1.Building a “budget/forecast” that reflects where you expect (or aim) your revenue and costs to land for a specific period (e.g. Jan-Dec 2023). This may involve input from others before it is finalized.
- 2.Pulling in the latest “actuals” from your accounting system (e.g. QBO, Xero, NetSuite)
- 3.Comparing the budget/forecast with actuals, e.g. “was my actual Revenue over or under budget for the period?”, and “if so, by how much?”
- 4.Understanding the why - “why did revenue come in under budget?”
- 5.Reporting all of this to your team/company/investors/board
Budget vs. actuals is a core workflow that’s fiddly in traditional spreadsheets, but is incredibly easy to do in Causal.
The first thing you need to do is to build a model that produces the set of numbers that represent your budget.
Once you’ve finalised your budget numbers, save it as a Named Version. This will let you refer back to your original budget even after your model has changed (e.g. with new data, or with a re-forecast).
Click the Versions button in the top right of the spreadsheet workspace and enter in the name of your budget or forecast in the pop up box, e.g. “Budget 2023”.
This saves the numbers that existed across all of your linked models when you saved the version, so you can always look back to them.
Once you save a Named Version you can no longer edit those numbers. If you want to update your budget, simply edit the model, and then save a new version (you can also delete the older version if you no longer need it).
Go to the Dashboard workspace and create a Table, adding the relevant variables that you’ll include in your BvA table. These might include (for example)
Cost of Goods Sold,
Operational Expenses, and
Once those variables are in the table, add a new column to the chart using the right-hand sidebar and select Version. Set the Base version to be the version that you created in step 2, and set the additional version to be the Actuals.
You can also toggle to see the version variance as a separate column, or as a # instead of a %, by clicking the gear icon.
After the data is refreshed, which might take a minute, toggle to the dashboard workspace. You’ll see that your actuals for the updated month are in the table!
Using your BvA table, you can compare the budget/forecast with actuals, and answer questions like “was my actual Revenue over or under budget for the period?”, and “if so, by how much?”
The next step is to understand the why, e.g. “why did revenue come in under budget?”. This is where a few Causal features come in handy