Understanding and Explaining Financial Variances
From Tasha Green’s guide series Small Business Finance Control: Essential SOPs for Invoice Management and Financial Reporting.
This is chapter 3 of the series. See the complete guide for the full picture, or work through the chapters in sequence.
Financial variances are the difference between what you planned to happen and what actually occurred in your business finances. For small business owners, understanding these variances isn’t just about numbers on a spreadsheet—it’s about maintaining control over your business trajectory and making informed decisions that drive sustainable growth. When your actual expenses exceed your budget by 15% or your revenue falls short by $10,000, these aren’t just accounting anomalies; they’re critical signals that requi
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