Produce a structured budget variance analysis from actual vs budget figures. Use when asked to analyse budget variances, explain underspend or overspend, write a variance commentary, or investigate why actuals differ from plan. Produces a categorised variance table with root cause analysis and management commentary.
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Use budget-variance-analysis to prepare a management-ready variance analysis from [actuals versus budget], for [period] using [materiality threshold], with categorized causes and forecast implications for material items.
Required inputs
[actuals versus budget]
[period]
[materiality threshold]
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SKILL.md
name: budget-variance-analysisdescription: "Produce a structured budget variance analysis from actual vs budget figures. Use when asked to analyse budget variances, explain underspend or overspend, write a variance commentary, or investigate why actuals differ from plan. Produces a categorised variance table with root cause analysis and management commentary."
Budget Variance Analysis Skill
Produces a complete variance analysis from numbers through to root cause explanation and management commentary.
Required Inputs
Actuals and budget figures (paste as table or describe line by line)
Period (month / quarter / YTD)
Materiality threshold (e.g. £10k or 5%)
Known reasons for variances (if any)
Audience (CFO / board / management / auditor)
Output Structure
1. Variance Summary Table
Line Item
Budget
Actual
Variance £
Variance %
F/A
Revenue
Cost of Sales
Gross Profit
Opex
EBITDA
F = Favourable | A = Adverse
2. Material Variance Commentary
For each variance above threshold:
[Line item] — £[amount] F/A ([%])
Root cause: [Specific explanation — not "timing" without detail]
Permanent or timing? Will this reverse next period?
Management action: What is being done
Forecast impact: Does this change full-year outlook?
3. Top 3 Variances Requiring Attention
Ranked by materiality and strategic significance.
4. Forecast Revision
Does the full-year forecast need updating? State revised expectation and key assumptions.
5. Executive Summary
3-4 sentences of management commentary suitable for a board pack.
Quality Checks
All variances above threshold explained
Root causes specific (not vague)
Favourable/Adverse correctly labelled
Forecast impact stated for material variances
Anti-Patterns
Do not explain a variance as "timing" without specifying which period it will reverse into and what amount is expected
Do not label a favourable variance on a cost line without checking whether it is due to underspend, delayed spend, or reduced activity — the cause determines whether it is genuinely good news
Do not omit variances below the materiality threshold entirely — note them collectively so the reader knows they exist and were reviewed
Do not present a variance analysis without a forecast impact statement for material items — historical variances without forward implications are incomplete
Example Trigger Phrases
"Write a variance analysis for these actuals vs budget: [paste]"
"Explain why we are over budget on [cost line]"
"Write the variance commentary for our finance review"