Budget Variance Analysis or Budget versus Actuals analysis (BvA)

Definition

Budget Variance Analysis, or BvA, is a process that involves comparing a company’s budget to actual results and investigating/interpreting the drivers of variance. Companies often perform detailed variance analysis periodically to allow managers to know the business's direction.

Example

Variances can be classified as a favorable variance when actuals are better than the budget, or a negative variance when actuals are worse than the budget.

Why it matters

Budget variance analysis helps a business know where it is performing above expectations and where it is falling short. A company's leaders understand what is and is not working by analyzing the variances and interpreting the drivers.

Get Started

Ready to see Vareto in action?

Give your finance team the tools they deserve so your company can make better, faster operational decisions.

Request a demo