Budget Variance Analysis

Monthly End Closing Checklist | Best Practices for Finance Teams A strong month-end close is critical to maintaining financial accuracy, ensuring compliance, and supporting strategic decision-making. Here’s a streamlined checklist every accounting and finance team should follow: ⸻ 1. Reconcile Bank Accounts • Match bank statements with internal company records. • Investigate and resolve discrepancies. 2. Reconcile Credit Card Accounts • Verify credit card transactions against internal records. • Identify and address any inconsistencies. 3. Accounts Receivable Management • Issue all customer invoices timely. • Follow up on overdue accounts. • Write off confirmed bad debts appropriately. 4. Accounts Payable Management • Enter all supplier/vendor invoices. • Process pending supplier payments. • Review and adjust accrued liabilities. 5. Payroll Reconciliation • Ensure payroll transactions are accurately recorded. • Reconcile payroll taxes and benefits obligations. 6. Fixed Assets Update • Record all asset acquisitions and disposals. • Update and apply depreciation schedules. 7. Inventory Management • Conduct physical inventory counts (if applicable). • Reconcile inventory values with accounting records. 8. Prepaid Expenses Adjustment • Record amortization of prepaid expenses. • Prepare entries for newly incurred prepayments. 9. Accruals and Deferrals • Book necessary accruals for expenses and revenues. • Ensure proper period recognition for all transactions. 10. Financial Reporting • Prepare Profit & Loss (P&L) Statement. • Generate Balance Sheet and Cash Flow Statement. • Compare actual performance against budgeted forecasts. 11. Review and Adjust Journal Entries • Validate journal entries for accuracy and completeness. • Post required adjusting entries to the General Ledger. 12. Backup Financial Data • Securely back up all financial records and sensitive data. 13. Management Review and Analysis • Present finalized financial statements to management. • Discuss variances, trends, and any material concerns. ⸻ Key Takeaway: ✔️ A disciplined monthly close improves financial transparency, strengthens internal controls, and empowers strategic business decisions. ⸻ #accounting #finance #financialreporting #monthendclosing #closingchecklist #accountsreconciliation #corporatefinance #financialanalysis #accountingbestpractices

In the construction of Free Cantilever Method (FCM) bridges, the adjustment of the height differences between the two sides is primarily achieved through camber control and deformation monitoring during the construction phases. FCM bridges are typically constructed by extending two cantilevers that meet in the middle, where camber is used to account for deformation and deflection to ensure proper alignment of both sides. Main methods for height adjustment: 1. Camber calculation and adjustment: Camber refers to an intentional extra height built into the structure to counteract deflection. During construction, camber is calculated by taking into account the deformation and deflection that occurs at each stage. This ensures that when the two cantilevers meet at the center, any height differences are compensated for by adjusting the camber. 2. Real-time monitoring: During the construction process, deflection and deformation are continuously measured. These measurements are compared to predicted values and adjustments are made to account for any discrepancies. Structural analysis software such as MIDAS, SAP2000, LUSAS, STAAD is used to monitor and correct height differences in real time. 3. On-site adjustments: If unexpected deflection occurs during construction, additional camber can be applied to the remaining segments to correct any height difference between the two sides. This ensures that the bridge segments are accurately aligned when they meet in the middle. These techniques are essential to controlling the height difference and ensuring accurate segment alignment in FCM bridge construction.

𝐇𝐨𝐰 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐄𝐱𝐞𝐜𝐮𝐭𝐢𝐯𝐞𝐬 𝐂𝐚𝐧 𝐓𝐚𝐜𝐤𝐥𝐞 𝐔𝐧𝐟𝐚𝐯𝐨𝐫𝐚𝐛𝐥𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐓𝐫𝐞𝐧𝐝𝐬 Finding it challenging to proactively intervene when financial metrics don't align with expectations? I understand the pressure and responsibility you face in ensuring optimal financial performance. But here's the stark reality: delayed responses to unfavorable financial trends are more than just uncomfortable – they come at a cost. Missed opportunities to counteract losses and ignite performance improvements can accumulate swiftly, potentially leading to more significant issues down the road. So, what can you do to stay ahead of the curve? Implement real-time monitoring systems and automated alerts for key financial metrics. Consider these steps: 1️⃣ Continuously track your organization's financial performance. 2️⃣ Identify deviations as they unfold. 3️⃣ React promptly to mitigate potential issues. 4️⃣ Define thresholds for alerts. 5️⃣ Establish well-defined protocols for swift response and decision-making. 6️⃣ Develop scenario-based predictive modeling to anticipate future financial scenarios. Now, picture the advantages: quicker responses, more informed decisions, and a proactive stance toward steering your organization's financial future in the right direction. How have you tackled this challenge within your organization? I’m eager to learn from your experiences! Share your insights below. 👇 #finance #CFO #automation #realtime #financialmetrics #financialperformance

Can you explain what happened here? If you can't, your business may be in BIG trouble. If you work in strategic finance, understanding how to comprehend + explain financial data is not a nice to have...it's a MUST. It doesn't matter whether you are presenting to leadership...the board of directors...or investors. If you don't have a tight grip on your data, you'll be faced with some catastrophic surprises. Let's learn how to interpret + present this by walking through this report together 👇 ➡️ PROFIT & LOSS SUMMARY Your P&L might look decent at first glance... We beat our bottom line net income by 14% 🙌 But a closer look reveals some important details... - Revenue is down 10% ($50K below budget) This is a pretty alarming metric and may mean that your assumptions are too aggressive here. Was it because your conversions rates were lower than expected? Was churn higher than expected? - COGS is actually BETTER than expected by 40% This makes sense...your revenue was lower, so your COGS should also be lower. But there's something more interesting to address here... your gross margin was 80%, compared to your projected 70%. While the variance is favorable it highlights an important question - do you have a strong grip on your unit economics? - Operating expenses are 10% favorable compared to budget. That's good...but why? Which accounts? Was it timing? Was it a change to your plans? - Net Other Income was -$10k compared to your projected +10k. Accounts here typically relate to interest income/expense, depreciation/amortization, and non core business activity. Although $10k may not seem like a lot, it warrants an important analysis This all leads to a $15k favorable net income, which is 14% higher than expected. All done with our analysis? Not quite... We've analyzed the PROFITABILITY of our business, now it's time to analyze our CASH FLOWS ➡️ CASH FLOWS SUMMARY This is where things get puzzling: - Collections are down $70k (78% below target 🤯 ) - Inventory up by $20k over budget - Total cash flows is $35k below budget Woah! We beat earnings but missed our cash flows by 27%?? Believe it or not, this story happens all the time...and it's up to you to see the forest beyond the trees and take action QUICKLY. ➡️ PUTTING IT ALL TOGETHER Your P&L is looking OK, but there are some strong indicators that you don't have a grip on your unit economics, and your revenue projections may be a bit overstated. But the biggest issue by far is your cash flows. You were supposed to collect $90k more than you invoiced this month but instead you only collected $20k. If you have $1m in the bank that may not be too material. But if you have $200k in the bank? Now things get more dangerous. That's why it's CRUCIAL to review this report each and every period - you don't want to be taken by surprise. === How would you interpret these results? What actions would you take? Share your analysis in the comments below 👇

Companies and their CEOs obsess over Profitability KPIs. But measuring Profit doesn’t drive Profit. Here’s the problem: Most leaders don't track the right metrics. They don't understand why they matter. They ignore stakeholder perspectives. If you don’t know and act on what the numbers are telling you - you’re not managing profitability. You’re just collecting data. Let’s fix that. Here are 16 Profitability KPIs every CEO and CFO needs to master—and how to extract the insights that drive smarter decisions: ■ Efficiency and Margins 1// Gross Profit Margin Ratio ↳ Why it matters: high margins signal strong pricing power or cost efficiency. 2// Contribution Margin ↳ Why it matters: critical for setting prices, understanding break-even points, and ensuring your products are profitable. 3// Operating Profit Margin Ratio ↳ Why it matters: reveals how well you’re managing core expenses 4// Net Profit Margin Ratio ↳ Why it matters: measures whether your business model scales profitably. 5// Return on Assets (ROA) ↳ Why it matters: shows how effectively your assets generate profit. 6// Return on Equity (ROE) ↳ Why it matters: measures investor return on their investment. 7// Return on Investment (ROI) ↳ Why it matters: helps prioritize high-ROI projects and avoid initiatives with weak returns. 8// Return on Capital Employed (ROCE) ↳ Why it matters: indicator for how well your business uses all available capital to drive profits. ■ Earnings and Market Performance 9// Earnings per Share (EPS) ↳ Why it matters: tells shareholders how much value each share represents. 10// Price-to-Earnings (P/E) Ratio ↳ Why it matters: gauges whether your stock is fairly priced based on earnings. 11// Dividend Yield Ratio ↳ Why it matters: income-focused investors seeking regular returns. 12// Dividend Payout Ratio ↳ Why it matters: balances reinvesting for growth with rewarding shareholders. ■ Cash Flow and Productivity 13// Operating Cash Flow Margin ↳ Why it matters: shows how well you convert revenue into cash. 14// Profit Per Employee ↳ Why it matters: tracks workforce productivity—a crucial metric for scaling efficiently. ■ Advanced Profitability Metrics 15// Economic Value Added (EVA) ↳ Why it matters: measures value above the company's cost of capital. 16// Break-even Revenue ↳ Why it matters: knowing your break-even helps you set realistic sales targets and avoid losses. The takeaway? Stop chasing KPIs for the sake of it. Start using them to lead smarter and grow faster. Want to join the 1% of CEOs who lead with financial intelligence? ▷▷▷ Join me tomorrow for a free webinar for CEOs, VPs, Managers, and leaders and start making 100% better business decisions: https://bit.ly/ceojan18 ▷▷▷ Transform your financial acumen in 6 weeks - live program, spots are limited, starts January 29: https://bit.ly/3ZCI0kr ♻️ Like, Comment, Repost if this was helpful. And follow Oana Labes, MBA, CPA for more

I Reduced Our AWS Bill by 71% Without Touching a Line of Code The CTO called it "magical." The CFO called it "career-making." I simply changed WHEN we thought about cloud costs. Before: Cloud optimization was a post-launch activity After: Cost became a first-class planning metric Two screenshots that changed everything for our team: [Imagine: Before/after AWS bill showing dramatic reduction] The exact process: 1. I integrated our AWS costs directly into our Jira dashboard 2. Every ticket now showed its estimated cloud cost impact 3. Engineers started competing to build the most efficient solutions 4. PMs began including "cost per transaction" in acceptance criteria Our margin increased by 24% in ONE QUARTER. The career-defining insight: Cost optimization isn't a technical challenge. It's a visibility problem. Unpopular opinion: If you're waiting until after launch to think about cloud costs, you've already failed. Who's the real MVP on your technical team? Tag them 👇 #CloudHacks #ProjectManagement #AWSsavings #ProductMargins #PMI #PMIChennai

The “Big Beautiful Bill,” introduces several updates to the tax code aimed at encouraging investment and long-term planning. For Family Offices and high-net-worth individuals, the bill offers meaningful tools to enhance strategy, preserve capital, and support intergenerational continuity. A key provision increases the estate and gift tax exemption to $15 million per person in 2026, allowing couples to transfer up to $30 million without triggering estate taxes. This creates a window for families to shift appreciating assets into trusts and other structures designed for legacy planning. The bill also raises thresholds for the Alternative Minimum Tax and reinstates full bonus depreciation. Combined with higher Section 179 expensing limits, these changes improve flexibility for business owners and investors seeking to allocate capital efficiently and reinvest with confidence. Other elements include expanded reporting requirements for Opportunity Zones and a carve-out excluding 25 percent of interest income from qualified rural and agricultural lending. The bill maintains current capital gains rates and preserves the step-up in basis at death. Both remain central to estate and investment planning. Together, these provisions expand long-term planning options for those managing complex portfolios. Adjustments to the standard deduction and child tax credit provide modest relief to broader income groups. The bill does not address areas such as healthcare, education, or housing and includes no new revenue measures, which may prompt future fiscal debate. Tax policy continues to attract public interest. The 2012 Buffett Rule proposed that households earning over $1 million annually should not pay a lower effective tax rate than middle-income earners. Warren Buffett, referencing his own experience, said he paid a lower tax rate than his secretary and called that "outrageous." His comment is often cited in discussions about how the tax code treats capital income in comparison to wages. Some share Buffett’s concern, while others view the bill’s approach as a way to support investment, reward risk, and strengthen family planning. Reactions to the bill reflect a wide range of perspectives. Family Offices play a key role in building enterprise, guiding philanthropy, and sustaining long-term investment. Predictable tax policy supports better planning, reduces risk, and improves outcomes. Stability and clarity remain important for managing capital across generations. The “Big Beautiful Bill” provides tools for families engaged in strategic planning. As tax discussions continue, focusing on clarity, consistency, and shared contribution may help maintain economic strength and support planning across income levels. What is your view on the new bill? Does it achieve a workable balance between long-term strategy and broad-based fairness, or does it raise concerns about how opportunity is distributed?

Budgeting ≠ Cutting down expenses Instead, it is about making smarter financial decisions that fuel growth, whether for your finances or business. But did you know there are different ways to build a budget? Here are four methods and when to use them:  → Incremental Budgeting –  This is the simplest and most common budgeting method. It works by taking last year’s budget and adjusting it slightly based on expected changes (inflation, growth, cost increases).  → Activity-Based Budgeting (ABB) - Instead of just tweaking last year’s numbers, ABB starts from scratch and links every cost to a specific business activity. It helps businesses optimize spending by understanding what truly drives costs.  → Value Proposition Budgeting – This method ensures every budget item contributes to the company’s value proposition. If an expense doesn’t add value to customers, employees, or stakeholders, it’s questioned or cut.  → Zero-Based Budgeting (ZBB) - ZBB requires every expense to be justified from scratch, rather than assuming past expenses should continue. It’s a powerful way to eliminate inefficiencies and ensure spending aligns with strategic goals.  Each approach has its pros and cons and the best method depends on your goals and business model. Some companies even use a mix of these methods for different departments.  Have you tried any of these methods? #personalfinance

10 FP&A Controls to Enhance Reliability ✅ 𝗕𝘂𝗱𝗴𝗲𝘁 𝗖𝗼𝗻𝘁𝗿𝗼𝗹𝘀 Establish clear budget procedures and approval processes, and monitor performance. Authorized individuals oversee budget preparation, review, and approval for financial accountability. Performance Measurement and Monitoring ✅ 𝗙𝗼𝗿𝗲𝗰𝗮𝘀𝘁 𝗔𝗰𝗰𝘂𝗿𝗮𝗰𝘆 𝗠𝗼𝗻𝗶𝘁𝗼𝗿𝗶𝗻𝗴 Implementing controls to monitor actual outcomes versus projections and conducting variance analysis is crucial for precise financial predictions. Significant deviations should be recognized and investigated. ✅ 𝗗𝗮𝘁𝗮 𝗜𝗻𝘁𝗲𝗴𝗿𝗶𝘁𝘆 𝗮𝗻𝗱 𝗩𝗮𝗹𝗶𝗱𝗮𝘁𝗶𝗼𝗻 Financial data accuracy, completeness, and reliability in FP&A require data validation checks, reconciliation, and periodic reviews of data sources and inputs. ✅ 𝗗𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗔𝘂𝗱𝗶𝘁 𝗧𝗿𝗮𝗶𝗹 Maintain proper documentation of FP&A activities, including assumptions, models, and calculations. Establish an audit trail that allows for traceability and verification of inputs, and outputs. ✅ 𝗥𝗲𝘃𝗶𝗲𝘄 𝗮𝗻𝗱 𝗔𝗽𝗽𝗿𝗼𝘃𝗮𝗹 𝗣𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 Implement controls to ensure financial analyses, reports, and recommendations are subject to appropriate review and approval. This helps ensure accuracy, reliability, and consistency in deliverables. ✅ 𝗦𝗲𝗴𝗿𝗲𝗴𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗗𝘂𝘁𝗶𝗲𝘀 Establish segregation of duties within the FP&A function to prevent conflicts of interest and reduce the risk of errors or fraudulent activities. For example, different individuals should prepare and approve financial analysis or forecasts. ✅ 𝗖𝗵𝗮𝗻𝗴𝗲 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 Implement controls to manage processes, models, or methodologies changes. This includes documenting and reviewing changes, assessing their potential impact, and obtaining proper approvals before implementing them. ✅ 𝗗𝗮𝘁𝗮 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝗮𝗻𝗱 𝗖𝗼𝗻𝗳𝗶𝗱𝗲𝗻𝘁𝗶𝗮𝗹𝗶𝘁𝘆 Implement controls to protect sensitive financial information. This can involve restricting access to data, implementing data encryption, and regularly reviewing and updating security measures. ✅ 𝗖𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲 𝗠𝗼𝗻𝗶𝘁𝗼𝗿𝗶𝗻𝗴 Establish controls to ensure compliance with relevant financial regulations, accounting standards, and internal policies. This can involve conducting periodic compliance assessments, staying updated on regulatory changes, and implementing corrective actions when non-compliance is identified. ✅ 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗠𝗲𝗮𝘀𝘂𝗿𝗲𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗠𝗼𝗻𝗶𝘁𝗼𝗿𝗶𝗻𝗴 Implement controls to monitor the performance and effectiveness of the FP&A function. Establish KPIs, conduct periodic performance assessments, and use feedback mechanisms to improve the quality and efficiency of FP&A activities. What other controls would you add to the list? #finance #experience #financialplanning #internalcontrols -------------------------------------------- Follow Abdul Khaliq + 🔔 - Sharing the essence of my Finance & Accounting experience.

Measuring your SME financial health with Free Cash Flow metrics 🎯 As an experience finance professional, I always consider good cash flow management as crucial in maintaining company’s financial health. Cash is the lifeblood of any kind of business in my opinion. So, it is very important that SME business owner to take a good care of their business cash flow management💸. One way for a business owner to assess the health of their company’s cash flow management is by selecting the right metric and consistently monitoring it. Free cash flow (FCF) is one of the metrics that can be used to measure your company financial health. It indicates how much cash a company can produce after taking cash outflows for operations and assets purchase into consideration. Normally you calculate FCF by subtracting capital expenditures from your operating cash flow. In another word, it is actually a measure of profitability that excludes the non-cash expenses of the income statement and includes cash outflow on equipment and assets purchase as well as changes in working capital from the balance sheet. Here are some key benefits in monitoring your business FCF: 1️⃣ Cash flow management: By monitoring FCF helps SME owners to ensure that they have enough liquidity to cover day-to-day operations, pay debts, and pay capital expenditures. 2️⃣ Decision to expand the business: Understanding FCF allows business owners to know the ability of their business to expand or grow, such as by expanding distribution assets, adding production line, or pursuing opportunities to acquire other business without compromising financial stability. 3️⃣ Debt management: By monitoring FCF, SME owners can assess their ability to service existing debt and at the same time evaluate the feasibility of taking on new debt to support the business growth. 4️⃣ Better financial forecast: Regularly tracking FCF enables SME owners to make more reliable financial forecasts, anticipate future cash needs, and plan accordingly. Such forecast could help to identify potential cash flow gap early and prepare relevant mitigation. 🤔 How do you monitor your business cash flow management? Please share your insight and experience in the comment section. 🙏 If you're gearing up to scale your SME or early-stage business to new heights, let's connect. Together, we can explore strategies to optimize your business cash flow and strengthening your financial foundation. #CashFlowManagement #BusinessOptimization #BusinessTransformation