FP&A for Startups: Budget vs Actual Analysis

Setting Up Budget vs Actual Reporting

• Start with an approved annual budget broken down by month — revenue, COGS, and operating expenses by department (Engineering, Sales, Marketing, G&A)
• Each month, compare actuals to budget at the line-item level and calculate both dollar variance and percentage variance
• Flag material variances (typically >10% or >$10K) for investigation — not every variance needs explanation, but the big ones do
• Use a consistent template month over month so trends become visible and the board can track performance against plan over time