Budget vs Actual analysis is a bit like a financial reality check for your business. Essentially, it involves comparing your budget with what you’ve actually earned and spent.
Taking the time to carry out budget vs actual analysis will give you a better understanding of your company’s current performance. In addition, it will help you to create better forecasts in the future.
If there are significant differences between the budgeted figures and actual figures (termed “favorable” or “unfavorable variance”) this can flag up potential problems. A favorable variance means that income was higher than expected, or outgoings were lower. In contrast, an unfavorable variance means that income was lower than forecast, or outgoings were higher.
An unfavorable variance is often the result of a one-off issue. This may be due to external factors. For example, supply chain disruption might force the company to spend more on an expensive alternative. On other occasions, variances can signify deeper problems in the company. A significant disparity between budgeted income and actual income could indicate a weakness in your sales department, for instance.
Gathering data for analysis
The greatest challenge when creating a variance report (and a reason why many SMEs don’t do it well — or do it at all!) is collecting all the necessary data.
Firstly, pulling together information from different departments is time-consuming. Secondly, someone has the tricky task of analyzing it all. For this system to work effectively, you need each department to record their data accurately in a compatible, accessible format.
There’s plenty of specialist FP&A (financial planning and analysis) software out there for budgeting, forecasting, and analysis. However, if you’re running a startup or SME there’s no need to invest in expensive new tools.
It’s likely that you already manage your sales, income, and expenses data in spreadsheets. A budget vs actual spreadsheet template in Google Sheets can help you transform that data into an automated budget tracker.
Sign up for Sheetgo and start tracking your budget vs actual
Why use Google Sheets for budget vs actual analysis?
- Flexible: Google Sheets allows you to manage and analyze all your financial data in the way that suits you. Whenever you need to change the system you can simply adapt the spreadsheets — without accounting software or IT support.
- Accessible: Cloud-based and updated in real-time, administrators and managers can access and update Google Sheets at any time, from anywhere.
- Compatible with everything: All software packages integrate with Google Sheets, so if your company has data stored in other programs, you can easily import that information.
- Easy to use: Your colleagues probably already use spreadsheets and Google Sheets is intuitive and user-friendly. As a result, the system is easy to maintain and onboarding your team is quick and simple.
How to get started
The Budget vs Actual Spreadsheet Template from Sheetgo is a connected spreadsheet system. Unlike a standard template, Sheetgo’s template is a workflow of connected files that consolidates data automatically. This tool enables you to compare your budget with what you’ve actually earned and spent, thereby facilitating efficient financial management.
It’s suitable for companies of all shapes and sizes, providing teams with a user-friendly way to collect and share income and expenses data. At the same time, it generates automated reports for accountants and company directors.
What you get with this template:
When you install the Sheetgo Budget vs Actual template, three Google Sheets files with pre-built Sheetgo connections are saved to your Google Drive. These include:
- An Expenses spreadsheet: Share this file with the person(s) responsible for payments.
- An Income spreadsheet: Share this file with the person(s) responsible for processing income.
- A Budget vs Actual master sheet: This is for the CFO, accountant, or administrator, where they get an automated analysis of forecasted and actual income and expenses data from across the company.
How to use the Budget vs Actual spreadsheet template
Click on the blue button below to install the template
How the template works
In the master sheet you’ll find initial instructions on how to use the template. Before filling out the spreadsheet, select the operating year in the dropdown menu.
Fill out the Income tabs
In the income file, complete the Income Forecast worksheet with your data, entering how much income each category is due to generate each month.
Next, you should fill out the Income Actual tab.
Start tracking your budget vs actual
Check out the automated Income report
Once you start entering data into the Income Forecast and the Income Actual tabs, the template automatically generates a report in the Income Analysis tab.
Fill out the Expenses tabs
In the Expenses file, you should record the budgeted expenses and the actual amount spent.
In the Expenses Forecast tab, you should enter the monthly budget for expenses.
In the Expenses Actual tab, you should enter the actual amount spent, every time a bill or invoice is paid.
The template automatically combines the budget and actual data to generate Expenses Analysis report.
Transfer the data
go back to the Workflow by clicking on the sidebar to the left of the screen Afterwards, click on Run located in the left bottom corner. You can also automate the process so that it runs on its own.
Check out the Budget Analysis
After running the workflow, the master file will automatically combine the data from all the files to generate the Budget Analysis report.
An end-to-end financial management solution
Looking for an all-in-one solution to control your finances? Check out our spreadsheet-based solution to automate your financial management and track all your business transactions.