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Variance Analysis Tool
Compare what you spent with what you budgeted, line by line, and split each large overrun into named causes, such as price and usage, each with an owner.
This tool also runs as a stage in a playbook, which takes you through several tools in order:
- Reduce business costs Stage 1 of 4: where did costs run over plan, and why? Start at stage 1
Not following the playbook?
The period
Budget and actual, line by line
- One row per cost line in your budget, with what was planned and what was spent.
- The large lines matter most. Group small ones, such as "Office supplies and travel".
- Amounts as you write them: 1,540,000 or 1.54m.
- Bought by the unit, such as material by the kg or hours of labor? Choose "By price × quantity" on the line: the tool splits it into price and usage by itself.
Or paste rows from a spreadsheet
Did the business do more or less than planned? (optional)
Spending that grows because the business sold or made more isn't an overrun. Give the planned and actual output, then tick the lines that grow with it, such as materials and freight.
Your figures never leave your browser
The cost lines, causes and owners stay on your computer and in your progress file. To write the diagnosis, only the amounts are sent to our server, by place in your list. How it works
Split the overruns
One overrun becomes several, each with its own owner: the person who could change it.
- Lines entered by price and quantity arrive split into price and usage: give each piece an owner.
- For the others, name the causes with what each added: price, how the work is done, timing, a one-off.
Other lines over budget
Each line against its budget
Favorable and unfavorable only say which way the number moved against the budget, not whether anything good happened.
The overruns, split
Save your progress
Download your progress file to continue from this point any time, on any computer: choose it under "Coming back?" at the start of the tool. Each new file includes everything so far, including the earlier stages when they are connected, so keep the latest one. Your work stays in this browser only until you close it.
Not saved yet.
Take your results with you
A PDF of each line against its budget, the overruns split into causes with their owners, and the diagnosis.
About the tool
Why it exists
Find which costs grew, and why, before cutting any
Variance analysis compares what was actually spent with what was planned, and splits each difference into named causes, such as price, usage, mix and timing. One overrun becomes several, each with an owner, so each goes to the person who can change it instead of becoming one cut for everyone.
This tool works on its own, and as stage 1 of our playbook for reducing business costs, where the split overruns go on to be compared with other businesses. For the method, see our guide to variance analysis.
The method
How the tool works
Budget against actual. For each line, actual less budget. Over budget is unfavorable, under is favorable. Those words only say which way the number moved, not whether anything good happened.
Output first. If the business sold or made more than planned, lines that grow with output get a budget scaled to the actual output, so the part that only reflects doing more is set aside before anything counts as an overrun.
Price and usage. For a line entered by price and quantity: price variance = (actual price − budget price) × actual quantity; usage variance = (actual quantity − budget quantity) × budget price. They usually have different owners: purchasing for price, operations for usage.
The largest first. The tool picks the overruns that together make most of the total, up to five, and asks you to split those. You can split others too. Lines entered by price and quantity are split into price and usage whatever their size.
What leaves your computer. The cost lines, causes and owners stay in your browser and your progress file. To write the diagnosis, the page sends our server only the amounts, by place in your list, and the server keeps nothing.