Budget vs Actual Report: Q3 2024 (July–September)
Currency: USD. Materiality threshold (per your settings): a variance is material only if it is over 10% and over $500.
Executive summary
- Net operating income was $4,525 against a budget of $10,700. That is $6,175 (57.7%) below budget.
- Revenue was $67,450 against a budget of $69,000, which is $1,550 (2.2%) under. Online sales beat budget by $3,380, which offset about 63% of the $5,350 wholesale shortfall.
- Total spending (COGS plus operating expenses) was $62,925 against a budget of $58,300, which is $4,625 (7.9%) over. Operating expenses alone were $5,675 (15.9%) over.
- The top three drivers were:
- Wholesale revenue: −$5,350, U
- Advertising: +$2,240, U
- Insurance: +$1,200, U
- Gross profit was close to plan at $45,800 against $46,300 (−1.1%). Gross margin was about 67.9% of revenue, compared with 67.1% budgeted.
- Overall: the core product economics held up. The quarter's shortfall came from lost wholesale revenue combined with higher operating costs, mainly advertising, insurance, and an unbudgeted equipment repair.
Variance table
| Section | Line item | Budget | Actual | Variance $ | Variance % | F/U | Flag |
|---|---|---|---|---|---|---|---|
| Revenue | Online coffee sales | 42,000 | 45,380 | 3,380 | 8.0% | F | |
| Revenue | Wholesale accounts | 18,000 | 12,650 | −5,350 | −29.7% | U | ⚠️ |
| Revenue | Subscriptions | 9,000 | 9,420 | 420 | 4.7% | F | |
| Revenue | Total Revenue | 69,000 | 67,450 | −1,550 | −2.2% | U | |
| COGS | Green coffee beans | 19,500 | 18,110 | −1,390 | −7.1% | F | |
| COGS | Packaging | 3,200 | 3,540 | 340 | 10.6% | U | |
| COGS | Total COGS | 22,700 | 21,650 | −1,050 | −4.6% | F | |
| Gross Profit | Gross Profit | 46,300 | 45,800 | −500 | −1.1% | U | |
| Operating Expense | Payroll | 24,000 | 24,860 | 860 | 3.6% | U | |
| Operating Expense | Rent | 4,500 | 4,500 | 0 | 0.0% | On budget | |
| Operating Expense | Utilities | 1,200 | 1,390 | 190 | 15.8% | U | |
| Operating Expense | Advertising | 3,000 | 5,240 | 2,240 | 74.7% | U | ⚠️ |
| Operating Expense | Software & subscriptions | 800 | 815 | 15 | 1.9% | U | |
| Operating Expense | Shipping supplies | 1,500 | 1,720 | 220 | 14.7% | U | |
| Operating Expense | Insurance | 600 | 1,800 | 1,200 | 200.0% | U | ⚠️ |
| Operating Expense | Equipment repair | 0 | 950 | 950 | n/a | U | ⚠️ Unbudgeted |
| Operating Expense | Total Operating Expenses | 35,600 | 41,275 | 5,675 | 15.9% | U | |
| Net | Net Operating Income | 10,700 | 4,525 | −6,175 | −57.7% | U |
Totals re-check (all sums re-added from the line items):
- Revenue: 42,000 + 18,000 + 9,000 = 69,000 budget; 45,380 + 12,650 + 9,420 = 67,450 actual.
- COGS: 22,700 budget; 21,650 actual.
- Operating expenses: 35,600 budget; 41,275 actual.
- Net operating income: 46,300 − 35,600 = 10,700 budget; 45,800 − 41,275 = 4,525 actual.
Variance chart (text)
Sorted from most favorable to most unfavorable. The prefix shows the effect on profit (+ means favorable, − means unfavorable). The amount at the end is the raw Variance $ (Actual − Budget). The largest bar is 30 characters (about $178 per █). Non-zero variances under one character are shown as a single █.
Online coffee sales + ███████████████████ +$3,380
Green coffee beans + ████████ −$1,390
Subscriptions + ██ +$420
Rent (on budget) $0
Software & subscriptions − █ +$15
Utilities − █ +$190
Shipping supplies − █ +$220
Packaging − ██ +$340
Payroll − █████ +$860
Equipment repair − █████ +$950
Insurance − ███████ +$1,200
Advertising − █████████████ +$2,240
Wholesale accounts − ██████████████████████████████ −$5,350
Biggest drivers
Ranked by absolute dollar impact. These four lines are all of the material variances this quarter.
1. Wholesale accounts: −$5,350 (−29.7%), Unfavorable
- The numbers: Wholesale brought in $12,650 against an $18,000 budget. This is the largest single reason net operating income missed plan.
- Cause: Per your notes, you lost one wholesale cafe account in August.
- Bottom line: If that account isn't replaced, the gap is likely to continue into Q4. A full quarter without it could be larger than this quarter's partial-quarter effect.
2. Advertising (recorded as "Ads/Marketing"): +$2,240 (+74.7%), Unfavorable
- The numbers: Ad spend was $5,240 against $3,000 budgeted.
- Cause: Per your notes, you ran a bigger-than-planned Instagram ad push in September for a new blend.
- Bottom line: This alone took $2,240 off net income for the quarter.
- To check: Online sales also beat budget by $3,380. Did the September push contribute to that, and are the results showing up in October?
3. Insurance: +$1,200 (+200.0%), Unfavorable
- The numbers: Insurance was $1,800 against a $600 budget, which is three times the planned amount.
- Cause: Your notes don't mention a reason, so here are some possibilities to check:
- Was an annual or semi-annual premium paid this quarter, when the budget assumed monthly or quarterly installments?
- Did a policy renew at a higher rate, or was new coverage added?
- Was a payment posted to the wrong period?
- Bottom line: If this is a timing difference, later quarters may come in under budget and even it out. If it is a rate increase, the budget may need updating.
**4. Equipment repa