What is a Monthly Profit & Loss Report with Budget and Forecast Variances?

Monthly Profit & Loss Variance Reports are considered core financial statements and are often used by executives and financial managers to review month-end results. Key functionality in this type of report provides actual to budget and forecast comparisons for the current period. It also shows the full year budget versus the revised forecast. Rows are grouped by department and can be expanded to view the individual accounts. You will find an example of this type of report below.

Purpose of Profit & Loss Reports with Budget and Forecast Variances

Companies and organizations use Profit & Loss Reports with Budget and Forecast Variances to easily view actual revenue, expense and profit performance compared to both the annual budget and the forecast. When used as part of good business practices in a Financial Planning & Analysis (FP&A) Department, a company can improve its monthly and year-end tracking against plan, as well as, reduce the chance that managers lose sight of gaps between current performance versus current and year-end budgets and forecasts.

Profit & Loss Reports with Budget and Forecast Variance Example

Here is an example of a Profit & Loss Report with variances against budget and forecast.

Monthly Profit & Loss Report with Budget and Forecast Variances Example

Monthly Profit & Loss Report with Budget and Forecast Variances Example

You can find hundreds of additional examples here.

Who Uses This Type of Report?

The typical users of this type of report are: Executives and Department Managers.

Other Reports Often Used in Conjunction with Profit & Loss Reports with Budget and Forecast Variances

Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Profit & Loss Reports with Budget and Forecast Variances, along with balance sheets, cash flow reports and other management and control tools.

Where Does the Data for Analysis Originate From?

The Actual (historical transactions) data typically comes from enterprise resource planning (ERP) systems like: Microsoft Dynamics 365 (D365) Finance, Microsoft Dynamics 365 Business Central (D365 BC), Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, SAP Business One, SAP ByDesign, Acumatica, Netsuite and others.

In analyses where budgets or forecasts are used, the planning data most often originates from in-house Excel spreadsheet models or from professional corporate performance management (CPM/EPM) solutions.

What Tools are Typically used for Reporting, Planning and Dashboards?

Examples of business software used with the data and ERPs mentioned above are:

  • Native ERP report writers and query tools
  • Spreadsheets (for example Microsoft Excel)
  • Corporate Performance Management (CPM) tools (for example Solver)
  • Dashboards (for example Microsoft Power BI and Tableau)

Corporate Performance Management (CPM) Cloud Solutions and More Examples