What is budget variance?
Definition
Budget variance compares actual results with an approved budget at the same period and management grain. Revenue and expense variance often use different favorable-sign conventions, so dashboards should label the arithmetic explicitly.
Formula: Raw variance = actual - budget; favorable variance depends on whether the line is revenue or expense
What data do you need?
- Approved budget version by period, account, and dimension
- Posted actuals mapped to the same reporting accounts
- Fiscal calendar and legal-entity mapping
- Account behavior: revenue, expense, asset, or liability
- Reporting-currency and consolidation rules
SQL pattern
Budget variance with favorable signPostgreSQL
SELECT
fiscal_period,
department_name,
reporting_group,
SUM(actual_amount) AS actual,
SUM(budget_amount) AS budget,
SUM(CASE
WHEN account_behavior = 'EXPENSE' THEN budget_amount - actual_amount
ELSE actual_amount - budget_amount
END) AS favorable_variance
FROM modeled_budget_actuals
WHERE budget_version = {{budget_version}}
GROUP BY 1, 2, 3
ORDER BY 1, 2, 3;Common pitfalls
Joining budget and actual detail many-to-many.→ Aggregate both to a shared period-account-dimension grain before joining.
Mixing budget versions.→ Require one selected approved version and label forecast scenarios separately.
Using one sign convention without labels.→ State raw and favorable variance formulas in the dashboard.
Where does this metric apply?
This metric commonly uses data from NetSuite, Xero, YNAB, QuickBooks, SAP, Ramp, plus any reconciled warehouse or ledger models that provide the same business grain.
Related
Dashboards
Integrations
Metrics
Analytics
FAQ
Should percentage variance use budget as denominator?
Usually yes, but handle zero or very small budgets separately to avoid misleading percentages.
Can I compare actuals with a rolling forecast?
Yes. Treat forecast as a separate scenario and retain its version and creation date.