Budget Analysis: 10+ Free Templates & Examples (Word | Excel)

Budget Analysis

Businesses, both large and small, need to keep track of where their funds are going. Organizing your finances is done using a budget. There is another tool that can be used to make sure the current budget you are using meets the needs of your organization. This is done using Budget Analysis.

What is Budget Analysis

Budget analysis is a tool that helps you to understand how money in your organization is being managed and spent. It shows whether this is meeting the goals of the groups within your organization. Budget analysis is used by large and small businesses, charities, and governments. It helps evaluate any budget proposals to make sure funds are being spent in a productive manner, which further helps by recommending decreases and increases in certain areas of the budget where needed.

How to Make a Budget Analysis?

Step 1 – Revenue

Your first step is to look at all of your present income sources. Most budget analyses’ are done on a monthly or quarterly basis, so add up your income as appropriate. Make sure you are only calculating your revenue and not your profit. Proft is what is left once expenses have been deducted.

You should go back over the past 12 months to help gather your information so that you can catch monthly changes and any seasonal patterns. This will help you to plan your budget for the months ahead.

Step 2 – Fixed Costs

Next, you will be subtracting your fixed costs. A fixed cost is anything that reoccurs and is necessary to operate your organization. These costs can occur yearly, monthly, weekly, and daily. Some examples of fixed costs are:

  • Payroll
  • Supplies
  • Rentals
  • Asset depreciation
  • Debt repayments
  • Insurance
  • Taxes

When you have your total fixed costs figure, subtract this from your income.

Step 3 – Variable Expenses

A variable expense is something that changes depending on how much or often you use a service, such as utilities. There are considered necessary for running your business. There are also other variable expenses that are desired but not considered a necessity, such as:

  • Marketing costs
  • Old equipment replacement
  • Salary for the business owner
  • Education/Professional development

When you have slower months, it will be the variable expenses that you adjust.

Step 4 – Unexpected Costs

It’s important to have a contingency plan and some backup cash for those unexpected bills that can crop up, usually at the worst times. Make sure you budget surplus cash for those unexpected costs.

Step 5 – Profit and Loss

Your next step is to create a profit and loss statement. You do this by subtracting your expenses from your income to see if you have cash leftover (profit) or a lack of funds (loss).

Step 6 – Looking Ahead

Your last step is to projects what will occur in your organization is the future, which can be guesswork for newer businesses. This is where you use all of the data from the past to create a budget for the future.

Free Templates & Examples

Budget Analysis Worksheet Template 01

Budget Analysis Worksheet Template

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Quarterly Budget Analysis Template 02

Quarterly Budget Analysis Template for Excel

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Budget Variance Analysis Template 03

Budget Variance Analysis Template

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Business Budget Analysis Template 04

Business Budget Analysis Template

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Personal Budget Analysis Template 05

Personal Budget Analysis Template

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Monthly Budget Variance Analysis Template 06

Monthly Budget Variance Analysis Template

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Family Budget Analysis Template 07

Family Budget Analysis Template

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Budget Cost Analysis Template 08

Budget Cost Analysis Template for PDF

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Monthly Household Budget Analysis Template 09

Monthly Household Budget Analysis Template

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Why doing Budget Analysis is important

Your budget analysis is an important planning tool for any business. It allows your business to limit funds being spent in some areas while redirecting them to other areas that need it. This can change from month to month and ensures that you aren’t wasting resources that could be going to areas that need them.

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