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Budget vs. Actual Variance Calculator
Computes line-level budget variance with the favorable/unfavorable convention applied correctly for revenue and expense accounts, plus the net impact on operating profit.
How this calculation works
- Variance is actual less budget, so an overspend on an expense line and an overachievement on a revenue line both show as a positive number.
- Profit impact re-signs that variance by account type: plus the variance for revenue lines, minus the variance for expense lines. It is the amount the line added to or removed from operating profit.
- Favorability follows profit impact, not the raw variance. A revenue line is favorable when actual exceeds budget; an expense line is favorable when actual comes in under budget.
- Variance % divides the variance by the absolute value of budget, so the percentage keeps the sign of the variance even on contra or credit-balance accounts.
Conventions and edge cases
- A zero budget produces no percentage rather than an infinite one. The variance amount is still reported.
- Totals sum profit impact, which is the only column that is meaningful to add across mixed revenue and expense lines.
- Account type drives every sign in the output. Classify the lines before reading the results.
Frequently asked questions
- Is an expense variance above budget favorable or unfavorable?
- Unfavorable. Spending more than budgeted reduces operating profit. The arithmetic variance is positive because actual exceeds budget, but the profit impact is negative — which is why this tool reports both columns rather than one signed number.
- Why does the tool ask me to classify each line as revenue or expense?
- Because favorability inverts between them. The same +$50k variance is favorable on a revenue line and unfavorable on a cost line. Any tool that reports favorability without knowing the account type is guessing.
- How is variance % calculated when the budget is zero?
- It isn't. Dividing by a zero budget yields an undefined percentage, so the tool leaves the cell blank and shows the dollar variance instead. This is common on lines that were unbudgeted entirely.
- Does any of my data get uploaded?
- No. The calculation runs in your browser. Nothing is transmitted, stored, or logged, and there is no account to create.