Variance commentary will continue to be a key activity for all FP&A departments and a way for good FP&A departments to separate themselves from best-in-class FP&A. If you feel like your variance commentary is lacking, analyze your variance analysis against the eight-step process in this article and decide how you can improve your variance commentary.
- Research before you start
- Know your audience
- Establish your thresholds
- Ditch the income statement view
- Focus on Controllable Expenses
- Use Cause/Impact/Action in commentary
- Track progress
- Leverage automation
After analyzing your process if you find that you are lacking automation in your variance commentary then consider adding an BVA automation tool to the process. This step is important as it helps free up time to focus on the other more important steps in the process. Without proper automation it becomes difficult to achieve best-in-class FP&A BVA analysis. Tools like Cobbler can help automate the BVA process and give finance an easy drag-and-drop experience to create BVAs that are more meaningful to the organization.
For more information about how Cobbler can help automate budget variance analysis, contact [email protected]
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