Budget vs Actual Tracker

What this tool does

CM8-258 runs a departmental budget. You enter the annual budget phased across the months, by cost centre and by account; you post the actuals as each period closes; and the tool works out the variance, the variance percentage and — the part most trackers miss — the money already committed but not yet invoiced, then prints a report you can take straight into a monthly finance review.

It is built for running a cost centre month to month: Maintenance, Production, Sales, Facilities, IT. Costing a project is a different job — what a piece of work consumed from start to finish, whatever month the money landed in — and the free Project Cost Tracker does that, organised by work package rather than by period. Everything here runs inside this single file: no account, no upload, no network request.

The row model

One row is one budget line, for one period. Maintenance consumables in April is a row; Maintenance consumables in May is another. Use the last day of the month as the period date so periods sort and group correctly, and spell the cost centre identically every time — the summaries group on that text exactly as typed.

Leave the actual blank until you have one. A blank actual means "not known yet" and the tool treats it that way: no variance is calculated and the line stays out of the variance charts, rather than being reported as a spectacular underspend. A closed period, though, will not save without one.

Phasing the annual budget

An annual budget divided by twelve is a fiction for anything seasonal, and almost everything is seasonal. Maintenance consumables track planned shutdowns, not calendar months. Travel spikes around trade shows. Insurance is often one annual payment. Phase those evenly and every month reports a variance that means nothing — half the year adverse, half favourable — and the budget holder learns to ignore the report, which is the worst outcome a tracker can produce.

Phase to the pattern you expect, from last year's actuals by month, the shutdown plan, the sales plan and the known one-offs. Keep the twelve figures adding to the annual budget. And never re-phase to hide a variance — moving next month's budget into this one turns a real overspend into a problem that arrives later, larger and with less warning.

The committed column, and why it matters

This is the most valuable idea in the tool: spend is committed at the purchase order, not at the invoice. The moment somebody raises an order the money is gone in every sense that matters to a budget holder — the supplier will deliver and will invoice, and nobody is going to unwind it. An accounting system recognises the cost weeks or months later, when the goods arrive or the invoice does.

A tracker that reports only budget and actual is therefore reporting the past. The classic case is a capital line: an order for a machine is placed in May, only the deposit is invoiced, and the line shows a huge favourable variance. Everyone relaxes. In September the balance lands and the year goes adverse at once.

The committed column fixes that. Put in it the value of orders raised against the line that have not yet reached the actual. The tool adds it to the actual to give the total commitment — the real spend position — and the spend position chart stacks actual, committed and remaining budget per cost centre. When that stack passes the budget you are over. Keep it current: when an order is invoiced, raise the actual and cut the committed, or the line double-counts.

Variance direction: cost lines and revenue lines

A variance only means something once you know which way is good. Spending less than the cost budget is favourable; earning less than the revenue budget is the same arithmetic sign and the opposite news.

The tool takes the direction from the line type. For operating expense, capital expenditure and internal recharge lines the variance is budget minus actual, so an underspend comes out positive. For revenue lines it is actual minus budget, so over-achievement comes out positive. A positive variance is therefore always favourable and a negative one always adverse, whatever the line. It is still not automatically good news: a favourable cost variance may be timing, a missing invoice, or work that was needed and did not happen. The tiles, charts and cost centre summary cover spend lines only, so income is never netted against cost.

Tolerance and explanations

Set a tolerance on the Settings tab — 10 % is a common starting point. Any line whose variance exceeds it, in either direction, needs a written explanation before the tool will save the row. That rule exists because a variance without a reason is a number, not management information. "Consumables 15 % over" tells a reader nothing they can act on. "Two unplanned pump rebuilds; parts bought at short notice at list price rather than on the framework" tells them there is a lead-time problem and something to fix.

Write the cause, not the number. A large underspend needs it just as much: it usually means planned work has not happened, an invoice is missing, or the budget was wrong. Set the tolerance to suit the size of the lines — 10 % of six figures is serious, 10 % of a few hundred is rounding noise. The outside-tolerance table sorts by the variance in money, because percentages mislead on small lines.

Forecasting the remainder honestly

The forecast column is your revised expectation now that you know more than you did when the budget was set. The temptation is always to forecast the budget, because that requires no conversation. Resist it. If three months have run 20 % over, a forecast that returns to budget in month four is a hope, and everyone reading it knows. The honest test: name the specific thing that will change, and by when. If you cannot, forecast the run rate you are actually experiencing, while there is still time to act on it.

Accruals

An accrual is an estimate of a cost already incurred but not yet invoiced, entered so the cost falls in the period that caused it. If materials were consumed in June but the supplier invoices in July, June should carry the cost; otherwise June looks cheap and July looks expensive. Enter the estimate as the actual, set the status to accrued, and say in the explanation how you arrived at the figure — a goods-received report beats a guess. An accrual is not a commitment: a commitment is an order placed, an accrual is a cost already incurred.

Capital and operating spend

Operating expenditure is what it costs to run the department this period — consumables, labour, travel, repairs. Capital expenditure buys something with a life beyond this period: a machine, a vehicle, a building improvement. They are budgeted separately because they behave differently. Capital spend is lumpy and dominated by timing, so a capital line often shows a large favourable variance that is nothing but a slipped order — the committed column is the antidote. Operating spend repeats, so a persistent variance there is usually a real change in the run rate. Which purchases count as capital, and how they are treated in the accounts, is set by your own accounting policy and the rules where you operate.

The monthly review routine

Twenty minutes, once a month:

1. Post the actuals for the closed period and set its status to closed, or accrued where you are estimating. Reconcile to the accounting system first; if the two disagree, it is right and this is out of date.
2. Update the committed column: add orders raised, move anything now invoiced into the actual.
3. Open the lines outside tolerance table — the agenda, sorted by the size of the gap. Anything showing "no explanation recorded" is the first thing to fix.
4. Look at the spend position chart. Any cost centre whose actual plus committed passes its budget is already over, whatever the variance column says.
5. Revise the forecast where something has genuinely changed, and re-phase later months only where the pattern has.

Formulas

Cost variance applies to operating, capital and recharge lines, revenue variance to revenue lines; in both a positive result is favourable. Variance % is taken against the size of the budget so its sign always matches the variance, and reads "—" when the budget is zero. Budget to date sums the budget for every spend line up to the latest period carrying an actual, so a month that has not closed is never counted against actuals that do not exist.

FAQ

Can I track more than one financial year in one file? Yes — the financial year is a text field on every line. Keep the label identical within a year and use the date filters to read one year at a time, because the tiles otherwise cover both.

Should I include internal recharges? If they hit your cost centre's budget, yes — they are real money to the budget holder. The separate line type filters them out when you want external spend only.

Why can I not put a commitment on a revenue line? A commitment means an order you have placed and will pay. Sales orders won but not yet invoiced carry different risks, and adding them to a revenue actual would overstate income. Use the forecast column for those.

The variance looks favourable but I know we are over. Commitments. If actual plus committed exceeds budget to date, you are over; the invoices have not arrived yet.

Saving your work

Budget lines, settings and the report header are written to this browser's local storage as you type, and that storage belongs to one browser on one computer. Treat Export .json as the real save — one file holding everything, which Import .json restores anywhere. Take one at each period end. Reset asks twice, then erases everything stored. Budget data is commercially sensitive.

Accuracy & disclaimer

The arithmetic here is simple and the tool does it faithfully. Everything that matters sits underneath it: whether the phasing reflects the real pattern of spend, whether the actuals are complete, whether the commitments are current. A variance from an incomplete actual is a confident wrong number.

This is a management tracker, not a ledger. It does not post journals, know your chart of accounts or produce statutory figures. Your accounting system remains the source of truth and the two should be reconciled every time a period closes. Nothing here is accounting, tax or financial advice.