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Budget Variancenoun

The difference between budgeted and actual figures for a period.

Budget variance compares actual income and spend against plan, by account, cost centre or project. Favourable and unfavourable variances are reported separately rather than netted off.

The number matters less than the explanation. Splitting variance into price and volume effects usually shows whether something was bought badly or simply bought more of.

How it is calculated

Variance = Actual − Budget

Split into price and volume components to find the real cause.

Also called

  • budget vs actual

See it in AWRA OpsHub

Budget Controls

Related terms

Cost Centre

A department or unit that costs are collected against for accountability.

Zero-Based Budgeting

ZBB

Building each budget from nothing rather than adjusting last year’s.

Purchase Price Variance

PPV

The difference between the price paid and the expected or standard price.

Open Purchase Order

A PO that has been issued but not yet fully received and invoiced.

More in Accounting

Accounts Payable (AP) Accounts Receivable (AR) Accrual Accounting Accrued Expense Aging Report Bad Debt Provision Balance Sheet Bank Reconciliation

Budget Variance is not just a definition here

Accounting runs on this vocabulary every day in AWRA OpsHub — 51 of our 257 glossary terms describe things the platform actually does.

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