Free editable workbook
Download the Month Variance Analysis in Excel.
Use the illustrative inputs, formulas, checks, and decision prompts as a starting point, then replace them with your own business information.
No signup required. Illustrative model only; review assumptions before using the output for a business decision.
Workbook structure
Start Here → Inputs → Drivers → Analysis → What to Consider → Checks. The model calculates actual-vs-budget, actual-vs-prior-month, revenue volume effect, price/mix residual, labor-hours effect, labor-rate effect, and other driver signals.
Direct answer
What should a monthly variance analysis include?
Compare actual results with budget and the prior month, isolate the largest differences in revenue, gross margin, labor or delivery costs, and operating expenses, then connect those differences to operating drivers before taking action.
Illustrative output
| Metric | Actual | Budget | Variance |
|---|---|---|---|
| Revenue | $524,000 | $500,000 | +$24,000 |
| Gross margin | 40.8% | 44.0% | (3.2 pts) |
| Operating expenses | $158,000 | $150,000 | ($8,000) |
| Operating income | $56,000 | $70,000 | ($14,000) |
A favorable revenue variance is not automatically a good month if margin and operating profit deteriorate.
What to consider
- Price, volume, mix, or timing?
- Labor hours or labor rate / overtime?
- Materials, subcontractors, rework, or service mix?
- One-time item or recurring operating pattern?
- Does the accounting result reconcile to operational data?
Need a customized variance model?
I can adapt the workbook to your chart of accounts, service lines, jobs/contracts, labor drivers, operating KPIs, and management review process.
Available as a project or as part of ongoing fractional CFO support.