The Actual vs Budget Report is the one we sometimes call the Measuring Report. It looks at your performance for the current month and shows how you’ve measured up to your budget. It then does the same for the year to date as that will smooth out anything that’s just a timing difference. This is then rounded out by showing you next month’s budget and the full year budget.



Where does the budget come from?

That depends on the choice you made when you first connected but you can change that by signing in.

So, if you have chosen to use your accounting system budget, I’ll bring that in from Xero, MYOB or QuickBooks for you. However, if you have made changes to that since the report was run, just sign in and click the Sync and Re-run reports button.

In the case that you don’t have an accounting system budget, I’ll have done the work for you and prepared a budget using your information from last year. For many people this is good enough for comparison purposes. Switch to your accounting system budget if you like to have a bit more flexibility and control.



What does the Actual vs Budget Report tell you?

The key information is in the Variance columns. A positive number in the variance column is good news (generally). For income, it means that the current month or year are higher than expected.  For expenses, it means that the Actuals are less than the budget.

There are 2 main reasons for a variance:

  1. Things didn’t work out as expected. That’s an opportunity to look more closely at that part of your business and try to understand why. Did things go well because of something you did (in which case it’s repeatable) or because of outside factors (in which case you need to be aware of when those factors might recur)?
  2. Something has been omitted from your accounts, entered twice or wrongly allocated. This report is a good check on the integrity of your accounting system (and it will help in fraud detection). Once you’ve fixed up the accounts sign into The Invisible Accountant and select the option to Sync and Re-Run your reports.

The Invisible Accountant-Actual vs Budget Report Blog



What’s the Additional Information section?

You’ll find 2 important KPIs here every month:

  • Debtor Days tells you the average number of days it takes your customers to pay you. Ideally you want this to reduce over time.
  • Net Profit Margin shows your Net Profit as a percentage of your income. Again, you want this to increase over time, or at least not to decrease. It’s a useful way of looking at your profit as it allows you to compare your performance with your peers in your industry.

Keep an eye on your Actual vs Budget Report each month and you’ll learn a lot about your business, about what’s working and what needs improvement.