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Variance Reports
By RISE Business Framework · Created by Gary Harper and Brandon McCurdy · Reviewed
A variance report compares planned financial results with actual results. In other words, it compares what was supposed to happen with what happened. In RISE, each line lists the Budget, the Actual, the Variance between them and an Outcome, from Cash Sale down to Net Profit.
How RISE does it
- Compares planned financial outcomes with actual outcomes.
- Usually compares budget to actual performance.
- Five columns: Item, Budget, Actual, Variance, Outcome.
- Positive and negative variances both guide the next plan.
Variance Reports is one of four tools in Finance, part of the Resources quadrant of the RISE Business Framework.
The RISE tool
Variance Report worksheet
Fill in Budget, Actual, Variance and Outcome for each row.
| Item | Budget | Actual | Variance | Outcome |
|---|---|---|---|---|
| Cash Sale | ||||
| Credit Sales | ||||
| Total Sales | ||||
| Cost of Good Sold | ||||
| Gross Profit | ||||
| Stock Loss | ||||
| Adjusted Gross Profit | ||||
| Wages | ||||
| Rent | ||||
| Insurance | ||||
| Bad Debt | ||||
| Other Expenses | ||||
| Net Profit |
“Positive variance is the pat on the back for a job well done, while negative variance is the wakeup call for improvement. Both are essential for financial growth.”Gary Harper
AI RISE Coach
Work through Variance Reports with the AI RISE Coach
“Walk me through Variance Reports in the RISE Business Framework and help me apply it to my business.”
Quick self-check
“We keep our financial records organized and clean and can generate accurate reports when needed.”
Frequently asked questions
How do you do a budget variance analysis?
List each item's budget and actual, subtract to find the variance, then decide the outcome. RISE runs this from Cash Sale through Net Profit.
Is a negative variance always bad?
Not always, but it is a signal to look closer. RISE calls negative variance a wakeup call for improvement and positive variance a pat on the back.
The other tools in Finance
- Pro FormasProject income and expenses across three periods to see whether the business will stay profitable.
- BudgetsPlan spending and income in four blocks so you can cut costs and fund growth on purpose.
- P&LsRecord actual income and expenses for a period using the same line items as your Pro Forma.
Related in another quadrant: Stoplight Reports
