1. What is Budget Vs Actual Percentage?

Budget Vs Actual Percentage is a financial metric that compares actual spending or revenue to the budgeted amount. It helps organizations measure financial performance and identify variances between planned and actual results.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( \text{Actual} \) — Actual amount spent or earned (in dollars)
• \( \text{Budget} \) — Budgeted amount (in dollars)

Explanation: This calculation shows what percentage of the budget was actually used or earned. Values above 100% indicate overspending, while values below 100% indicate underspending.

3. Importance of Budget Vs Actual Calculation

Details: Tracking budget vs actual percentages is crucial for financial management, helping organizations control costs, identify spending patterns, and make informed decisions for future budgeting.

4. Using the Calculator

Tips: Enter both actual and budget amounts in dollars. The budget amount must be greater than zero. The result will show the percentage of budget used or achieved.

5. Frequently Asked Questions (FAQ)

Q1: What does a percentage over 100% mean?
A: A percentage over 100% indicates that actual spending exceeded the budgeted amount (overspending).

Q2: What does a percentage under 100% mean?
A: A percentage under 100% indicates that actual spending was less than the budgeted amount (underspending).

Q3: Can this calculation be used for revenue as well as expenses?
A: Yes, the same formula works for both revenue and expense comparisons. For revenue, values over 100% indicate exceeding revenue targets.

Q4: How often should budget vs actual comparisons be done?
A: Most organizations perform this analysis monthly as part of their regular financial reporting cycle.

Q5: What are some common reasons for budget variances?
A: Variances can occur due to unexpected expenses, changes in market conditions, inaccurate budgeting, or operational changes.