What is Budget vs actual?

Budget vs actual is a comparison between the budgeted or forecasted figures for a business and the actual figures that the business has achieved. This comparison is crucial for financial control, as it helps businesses identify where they are overspending or underspending, and make necessary adjustments.

For instance, if a company budgeted $10,000 for marketing but actually spent $15,000, the budget vs actual report would highlight this discrepancy. The company can then investigate why this overspend occurred and take steps to prevent it in the future.

It's important to note that a budget is not a rigid plan but a flexible tool. It should be reviewed and adjusted regularly to reflect changes in the business environment or company strategy.

Remember, the goal is not to match the budget exactly, but to use it as a guide to manage spending and drive business performance.