sboghossian Budget vs Actual — Matter Dashboard
Budget management is the leading cause of client-firm relationship deterioration. A client who receives an invoice significantly above the budget estimate did not get a surprise — they got a relationship problem. This skill generates a live budget dashboard for each matter with a budget, with automatic alerts and recommended actions when the burn rate or variance cross defined thresholds.
When to use this
- Monthly matter review for any matter with an approved budget
- Before preparing a client status report (to include financial update)
- Before sending an invoice when the matter is near or over budget
- When the billing partner suspects a phase is running over
- During partner-associate weekly matter reviews
Required inputs
| Input | Notes |
|---|---|
| Matter identifier | Client/matter number |
| Budget by phase | Approved budget for each phase (dollar amount and/or hours) |
| Actual time entries | All recorded hours and fees to date, by phase |
| Billing rates | By timekeeper and seniority level |
| Phase status | Which phases are complete; which are in progress; which are pending |
| Timeline | Planned start and end date per phase; actual start dates |
Dashboard Output
Matter Financial Summary
MATTER FINANCIAL DASHBOARD
Matter: [Client / Matter Name] Date: [Dashboard Date]
Partner: [Name] Status: [Active / Phase 2 of 4]
─────────────────────────────────────────────────────────────────────
BUDGET ACTUAL VARIANCE VARIANCE%
─────────────────────────────────────────────────────────────────────
Phase 1: Due Diligence [Amount] [Amount] [+/-Amt] [+/-X%]
Phase 2: Documentation [Amount] [Amount] [+/-Amt] [+/-X%]
Phase 3: Negotiation [Amount] [Amount] [+/-Amt] [+/-X%]
Phase 4: Closing [Amount] [Amount] N/A (future) N/A
─────────────────────────────────────────────────────────────────────
TOTAL BUDGET [Amount] [Amount] [+/-Amt] [+/-X%]
─────────────────────────────────────────────────────────────────────
% of total budget consumed: [X]%
Projected total at completion: [Amount] ([+/-Y]% vs budget)
Burn Rate Analysis
BURN RATE ANALYSIS
─────────────────────────────────────────────────────────────────────
Current phase: Phase 2 — Documentation
Phase budget: [Amount]
Phase start date: [Date]
Phase planned duration: [X] weeks
Phase elapsed: [Y] weeks
─────────────────────────────────────────────────────────────────────
Planned burn rate: [Amount / week]
Actual burn rate: [Amount / week]
Variance from planned: [+/-X]% per week
─────────────────────────────────────────────────────────────────────
At current burn rate, phase will complete at: [Projected amount]
vs phase budget: [+/-Amount] [OK / ALERT]
Team Utilization by Role
TEAM UTILIZATION
─────────────────────────────────────────────────────────────────────
Role Budget hrs Actual hrs Remaining hrs % Used
───────────── ────────── ────────── ───────────── ──────
Partner [X] hrs [Y] hrs [Z] hrs [%]
Sr Associate [X] hrs [Y] hrs [Z] hrs [%]
Associate [X] hrs [Y] hrs [Z] hrs [%]
Paralegal [X] hrs [Y] hrs [Z] hrs [%]
─────────────────────────────────────────────────────────────────────
Alert Thresholds and Triggers
| Alert | Trigger condition | Recommended action |
|---|---|---|
| Budget threshold | >80% of total matter budget consumed | Contact client immediately; provide updated estimate; obtain authorization before incurring further fees above budget |
| Phase overrun | Individual phase exceeds budget by >20% | Investigate cause; discuss with team; assess whether remaining phases are also at risk |
| Burn rate acceleration | Current week's burn rate >125% of planned pace | Review scope; identify if unplanned work is driving the acceleration |
| Phase under-burn | Phase complete but <70% of phase budget used | Carry-forward analysis: can savings be applied to a later phase? Return to client? Credit to a future matter? |
| Matter stalled | No time entries for [X] business days when phase is in progress | Investigate; may indicate team availability issue or waiting on client |
Recommended Actions by Scenario
Scenario A: Matter at 85% of budget with Phase 3 still to complete
Action:
- Partner calls or emails client immediately — do not send a surprise invoice
- Prepare an updated budget estimate for Phase 3 (revised range: low / mid / high)
- Explain the cause of variance: scope expansion? counterparty-caused extensions? unexpected regulatory requirement?
- Request client authorization to exceed original budget by [X] — get it in writing (email is sufficient)
- Consider converting remaining work to a fixed fee for Phase 3 to restore predictability
Scenario B: Phase overrun due to client-caused delays
Action:
- Document the delay (with dates and emails)
- Send the client a written scope-variation notice: "The delay in receiving the corporate approvals (notified on [date]) has extended Phase 2 by [X] weeks and resulted in [Y] additional hours of team engagement. This will add approximately [Amount] to the Phase 2 fee."
- Adjust the budget formally; keep a record
- Issue a change order or supplemental engagement letter if the amount is material
Scenario C: Phase under-budget — budget carry-forward opportunity
Action:
- Report the under-spend in the invoice and/or status update
- Propose carry-forward to a subsequent phase or a corresponding reduction in the fixed fee (demonstrates value and good faith)
- Alternatively: credit toward the next matter if the client is a relationship client
- Do not simply pocket the saving without notifying the client — in an AFA context especially, under-spending against a fixed fee is the firm's to keep, but transparency builds trust
Scenario D: Matter projected to significantly exceed budget at completion
Action:
- Prepare a write-down analysis: what is the firm willing to absorb vs charge?
- Partner makes the client call: "We are currently tracking above budget. I want to discuss how we handle the balance — here are our options."
- Options: firm absorbs the overrun (write-down); client authorizes additional fees; scope is reduced to fit within remaining budget; matter is phased to a natural breakpoint
- Never let the client open the invoice and see a number significantly above budget without prior discussion
Partner Email Draft (Auto-Generated)
When a threshold alert fires, the dashboard generates a draft email for partner review:
Subject: [Matter Name] — Budget Update [Date]
Dear [Client name],
I wanted to update you on the budget position for [Matter Name].
As of [date], we have incurred approximately [Amount] against a budget of
[Amount], representing [X]% of the approved budget. The matter is currently
in [Phase X].
[If on track:] We remain within the approved budget and the matter is on track
to complete within the estimate.
[If approaching threshold:] Based on the remaining work in [Phase X/Y], I
estimate that the total fees will be in the range of [low] to [high], which
[exceeds / is at the upper end of] the approved budget of [Amount]. The
principal driver has been [explanation].
I would welcome a brief call to discuss, or please let me know by email
whether you wish to [authorize additional fees / adjust the scope / other].
Kind regards,
[Partner Name]
Related skills
- [[efirm-finance-afa-quote-builder]]
- [[efirm-finance-billing-narrative-cleanup]]
- [[efirm-finance-invoice-generator-from-time-entries]]
- [[efirm-finance-collection-rate-tracker]]