Variance

Variance

Perform variance analysis for "$ARGUMENTS". Compare actual results to budget, forecast, or prior period and explain the differences.

Prerequisites

None — utility skill, run anytime. More effective when financial data is available from Phase 7 (statements) or Phase 4 (trial balance).

Process

1. Establish comparison basis:

   • What are we comparing? (actual vs. budget, actual vs. forecast, actual vs. prior period)
   • What level of detail? (total entity, department, account, line item)
   • What period? (month, quarter, year)

2. Calculate variances:

   • For each line item, compute:
     • Dollar variance — actual minus budget/forecast
     • Percentage variance — dollar variance divided by budget/forecast
   • Classify as favorable (F) or unfavorable (U)
   • Highlight variances exceeding materiality thresholds

3. Analyze root causes:

   • For each significant variance, identify the driver:
     • Volume variance (more or fewer units)
     • Price variance (higher or lower unit cost/price)
     • Mix variance (different product/service mix)
     • Timing variance (recognized in a different period)
     • One-time items (non-recurring events)
   • Quantify each driver where possible

4. Write the artifact to .metapowers/accounting/$ARGUMENTS/variance.md with sections:

   • Variance Summary — high-level overview of actual vs. budget with key metrics
   • Detailed Variance Table — line-by-line comparison with dollar and percentage variances
   • Root Cause Analysis — explanation of significant variances
   • Recommendations — actions to address unfavorable variances or capitalize on favorable ones

Output

The variance analysis written to .metapowers/accounting/$ARGUMENTS/variance.md. Present a summary highlighting:

• Top favorable and unfavorable variances
• Key root causes identified
• Recommended actions