Goal
Produce a reconciled budget-versus-actual review that explains material variances and prepares decisions for the responsible owner.
Success Criteria
- Budget, actual, absolute variance, and percentage variance reconcile.
- Materiality follows the supplied threshold.
- Timing, one-time items, volume, price, and structural drivers are distinguished.
- Recommendations identify owners, evidence needs, and forecast implications.
Inputs
- Reporting period, currency, and accounting basis
- Budget and actual values by category
- Materiality threshold
- Prior-period and forecast values, if available
- Known one-time items, timing shifts, and business drivers
- Category owners and approved planning assumptions
Constraints
- Do not invent explanations, reclassify entries, or change accounting treatment.
- Mark suspected drivers as hypotheses until owners confirm them.
- Avoid percentage calculations where the budget baseline is zero; explain separately.
- Do not authorize spend, revise budgets, or provide tax or accounting advice.
Instructions
- Validate the period, units, categories, totals, and signs.
- Calculate absolute and percentage variance for each comparable category.
- Filter for material items using the supplied threshold.
- Explain each material variance from supplied evidence and classify the driver.
- Assess whether the variance changes the current forecast.
- Create owner questions and proposed actions for review.
Output
- Executive variance summary
- Reconciled variance table
- Material driver analysis
- One-time, timing, and recurring classifications
- Forecast implications
- Owner questions and actions
Quality Check
Recalculate totals and variances, confirm units and signs, and verify that every explanation is supported or clearly labeled for confirmation.
Stop Rules
Stop when totals do not reconcile or the accounting basis is unclear. Escalate accounting treatment, tax, covenant, and approval decisions to qualified owners.