Financial Cost Variance Checklist
Finance Cost Variance Checklist
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Budget Preparation Review |
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Review the initial budget assumptions and parameters. |
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Ensure all revenue and cost centers were included in the budget. |
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Confirm that the budget was approved by the appropriate authority. |
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Data Collection |
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Gather all relevant financial data (actual vs. budgeted figures). |
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Ensure the accuracy and completeness of the financial data collected. |
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Variance Identification |
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Identify variances between actual and budgeted figures. |
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Categorize variances as favorable or unfavorable. |
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Highlight variances that exceed a predetermined threshold (e.g., 5% or 10%). |
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Variance Analysis |
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Analyze the causes of significant variances. |
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Determine if variances are due to changes in volume, price, efficiency, etc. |
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Evaluate the impact of these variances on overall financial performance. |
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Reporting and Documentation |
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Document each identified variance and its cause. |
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Prepare a variance report summarizing the findings. |
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Include recommendations for action or adjustment in the report. |
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Review of Action Taken |
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Review actions taken in response to previous variance findings. |
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Assess the effectiveness of the actions in mitigating on the variances. |
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Continuous Monitoring |
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Establish a process for ongoing monitoring of budget variances. |
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Schedule regular reviews to stay ahead of potential issues. |
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Communication |
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Ensure effective communication of variance findings to relevant stakeholders. |
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Discuss the implications of variances in management meetings. |
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Process Improvement |
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Identify areas for improvement in the budgeting process based on the analysis. |
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Implement changes to enhance financial planning and control. |
Prepared By: [Name]
Date: [Month Day, Year]
