Ma Budget Actual Variance

Budget-Actual Variance Analysis

Overview

Analyzes the differences between budgeted and actual figures, identifying favorable and unfavorable variances with account-type awareness. Provides materiality ranking, root cause hypotheses, and actionable recommendations for management decision-making.

When to Use This Skill

Use this skill in the following scenarios:

1. Monthly/Quarterly Budget Review - Compare actual results against budget to identify significant deviations
   • 「今月の予実差異を分析して」「月次の予算対比レポートを作成して」
2. Management Meeting Preparation - Create executive-level variance summaries with root cause analysis
   • 「経営会議向けに予実サマリを作って」「取締役会用の業績報告資料を準備して」
3. Cost Overrun Investigation - Identify which line items are over budget and why
   • 「コスト超過の原因を特定して」「予算オーバーしている勘定科目を洗い出して」
4. Revenue Shortfall Analysis - Determine revenue gaps and contributing factors
   • 「売上未達の原因を分析して」「予算未達の要因分解をして」
5. Rolling Forecast Adjustment - Use variance trends to update future projections
   • 「差異トレンドから今後の見通しを修正して」「ローリングフォーキャストを更新して」

Prerequisites

Before running this skill, ensure the following data is available:

• Budget Data: Approved budget figures by account (CSV or manual input)
• Actual Data: Actual performance figures for the same period
• Account Classification: Each account must be classified as revenue or cost/expense
• Period Information: Target analysis period (month, quarter, or year)

Required CSV Format

account_name,account_type,budget,actual
Sales Revenue,revenue,1000000,1200000
Material Cost,cost,400000,380000
Labor Cost,cost,300000,320000

Required Columns:

Workflow 1: Data Preparation

1. Validate Input Format: Verify CSV structure and required columns are present
2. Classify Accounts: Confirm account type assignments (revenue vs. cost/expense)
3. Period Alignment: Ensure budget and actual figures correspond to the same period
4. Data Cleansing: Handle missing values, zero budgets, and currency formatting

Workflow 2: Variance Calculation

1. Compute Absolute Variance: Variance = Actual - Budget for each line item
2. Compute Percentage Variance: Variance % = (Actual - Budget) / Budget * 100
3. Determine Direction: Apply account-type-aware favorable/unfavorable logic:

4. Materiality Ranking: Sort by absolute variance amount to highlight significant items
5. Threshold Flagging: Flag items exceeding materiality threshold (default: 10% or top 5 items)

Workflow 3: Root Cause Analysis

1. Pattern Identification: Look for correlated variances (e.g., higher sales + higher variable costs)
2. Root Cause Hypotheses: For each material variance, suggest possible explanations:
   • Revenue variances: volume changes, pricing changes, product mix shifts, seasonal effects
   • Cost variances: input price changes, efficiency changes, activity level changes, one-time items
3. Offsetting Analysis: Identify variances that partially cancel each other
4. Trend Comparison: Compare current period variance to prior periods if data available
5. Action Recommendations: Prioritized corrective actions for unfavorable variances

Output

The analysis produces a structured variance report containing:

1. Executive Summary: Total favorable/unfavorable variance, key highlights
2. Variance Detail Table: Per-account breakdown with amounts, percentages, and direction
3. Materiality Ranking: Top variances sorted by absolute impact
4. Root Cause Analysis: Hypotheses and supporting evidence for major variances
5. Recommended Actions: Prioritized list of corrective/follow-up actions

Output template: assets/variance_report_template_ja.md (Japanese) or assets/variance_report_template_en.md (English)

Resources

References (load into context for guidance)

• references/08_budget-actual-variance-analysis_20250820.md - Comprehensive guide on budget-actual variance analysis methodology with practical bakery business examples
• references/05_evidence-based-budgeting_20250507.md - Budget planning fundamentals and evidence-based budgeting approaches

Assets (templates for output generation)

• assets/variance_report_template_ja.md - Japanese variance analysis report template
• assets/variance_report_template_en.md - English variance analysis report template

Best Practices

• Always verify account type classification before calculating variance direction
• Present both absolute amounts and percentages - large percentage on a small base may not be material
• Consider the business context: seasonal patterns, one-time events, and structural changes
• Look for offsetting variances - a favorable cost variance paired with unfavorable revenue may indicate reduced activity
• When budget assumptions have changed significantly, consider rebasing before analysis
• Focus management attention on actionable variances rather than uncontrollable factors

Examples

Example: Bakery Business Monthly Variance

Input Data:

account_name,account_type,budget,actual
Bread Sales,revenue,500000,480000
Cake Sales,revenue,300000,350000
Flour Cost,cost,120000,135000
Sugar Cost,cost,80000,75000
Labor Cost,cost,200000,210000
Rent,cost,100000,100000

Analysis Output (Summary):

• Total Revenue Variance: +30,000 (Favorable) - Cake sales overperformance offsets bread shortfall
• Total Cost Variance: +40,000 (Unfavorable) - Flour cost increase and overtime labor
• Net Variance: -10,000 (Unfavorable)

Key Findings:

1. Cake Sales +50,000 (F): New seasonal menu drove demand
2. Flour Cost +15,000 (U): Wheat price increase due to supply shortage
3. Labor Cost +10,000 (U): Overtime to meet cake demand
4. Bread Sales -20,000 (U): Competitor opened nearby - requires strategic response