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Budgets versus actuals. Let’s talk about one of the most essential tools you can use, the budget.
Your budget is your plan. What you think will happen.
Your actuals are what really happened.
You make your best guess about income and expenses, track everything as it unfolds, and then compare the two. That comparison shows you where you were over, under, or right on target.
Maybe you budgeted $500 for a costume, but spent $800, or you expected $2,000 in ticket sales, but brought in $3,000. Seeing those differences helps you plan for next time and make smarter choices.
Here’s the simple version. Budget equals your plan. Actuals equals your receipts. Why does this matter? Because putting them side by side gives you more than just accuracy. It gives you insight. It helps you evaluate projects, explain results to funders, and stay honest with yourself about how money actually moved.
A budget by itself is just a guess. Actuals by themselves are just history. Together, they give you a clear picture on how your project really played out and the power to improve the next one.
What is a Budget vs Actuals?
A Budget vs Actuals is a financial statement (report) that shows a list of how much money you expected in each of your categories for income and expenses (see: Chart of Accounts), compared to a list of how much money actually came in and went out during a specific period of time. It’s one of the “big 3” financial statements, along with the Profit & Loss and Balance Sheet.
It puts your budget and your Profit & Loss right next to each other on the same page, so you can easily compare apples to apples.
You might hear it abbreviated as a “BvA” or called a “Budget-to-Actuals” (“BtA”). Same thing!
Where do I get a Budget vs Actuals?
If you’re using bookkeeping software like Wave, Xero, or Quickbooks Online, and you enter your budget information, you can run a Budget vs. Actuals statement from the Reports section of the website. Or, if you don’t want to go to the trouble of entering your budget information into the system, you can use your software to run a Profit & Loss report showing just your actuals, and then drop that information into a spreadsheet to compare to your budgeted amounts.
If you’re using spreadsheets to handle your bookkeeping, you’ll need to take a few more steps. You can use the SUMIFS formula or pivot tables to build up the Budget vs Actuals from reference sheets that hold your budget and your transaction tracking. We’ll be adding tutorials for how to do this soon!
What goes into a Budget vs Actuals?
The Budget vs Actuals has four main lists stacked next to each other:
- Your Chart of Accounts,
- The corresponding dollar amounts from your budget for each account,
- The dollar amounts from your Profit & Loss for each account,
- A calculated percentage that compares the amount for each line item in the Profit & Loss to its partner in the budget.
At the top, it should have the organization name, the name of the report (Budget vs. Actuals), and the date that the report is for.
Take a look at this example to get a sense of what a Budget vs Actuals report looks like:
Where does a Budget vs Actuals come from?
The information in your Budget vs Actuals comes from three main sources:
- Your Chart of Accounts,
- Your budget (whether it’s a project/program budget, or your whole organizational budget), and
- Your bookkeeping transactions.
If you’re missing any of these pieces, you won’t be able to make a Budget vs Actuals report until you’ve got them caught up.
What should I look for in a Budget vs Actuals?
- First, look at the date at the top of the report. The date is super important, because it tells you how much of the year is included in the report. If you’ve got actual expenses at 75% of your budget, it makes a big difference whether it’s March or October!
- Look at the revenue total percentage. Is it about what you expect it to be for this point in the year? What do you know about when your income sources tend to hit your bank account? For example, does most of your income come from ticket sales for your end-of-year holiday show? Do you have three main grants that all hit in March?
- Look at the expenses total percentage. Is it about what you expect it to be for this point in the year? What do you know about when your big expenses tend to hit? For example, do you mostly have staff salaries, so your expenses are pretty even month-to-month? Or do you have several large events a few times a year that compress expenses into the periods right around them?
- Now look at the individual line items. Does anything stand out there as much higher or much lower than you expect?
- Percentages can be a helpful guidepost, but don’t get too hung up on them. You might get shocked to see that you’re at 250% of your office supplies expenses already and it’s only May. But look closer — if the budgeted amount for office supplies for the year was $50 and your total expense budget overall is $25,000, you’re still really close. Percentages are more valuable information for line items with bigger dollar amounts.
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