Practical guide
How to compare final accounts and budget as an owner
The final accounts tell you how much was spent; the budget said how much was expected to be spent: reading them separately tells only half the story. Comparing the two, item by item, is one of the most effective checks available to the owner, because it makes variances evident and lets you distinguish the justified ones from those that deserve an explanation. Not all differences are a problem: an extraordinary expense approved during the year is a legitimate cause. This guide explains how to set up the comparison, which variances are normal and which questions to ask at the meeting.
How to set up the comparison
- Obtain the approved budget for the year and the final accounts to be approved
- Place the same expense items side by side in the two documents
- Calculate for each item the difference between spent and forecast
- Rank the items from the largest to the smallest variance
- Check whether the explanatory note explains the main variances
- Distinguish ordinary expenses from extraordinary ones approved during the year
- Prepare questions for the unexplained differences
Why compare the two documents
The budget is the expenditure forecast the meeting approves at the start of the year and on the basis of which you pay the advances. The final accounts are the statement of what was actually spent. Comparing them tells you whether the management stayed within the forecast and where it deviated.
This check is particularly useful because it does not require examining every supporting document: you just place the two columns side by side and observe the differences. It is the fastest way to identify the items worth looking into further by requesting the detailed documents.
How to read the variances
For each item, calculate the difference between what was spent and what was forecast, both in absolute value and as a percentage. A variance expressed as a percentage helps give the right weight: a difference of a few hundred euros on a small item may matter more than a larger difference on a big item.
Then rank the items from the most significant variance to the least relevant. Focus on the first ones: they are the ones that shift your balance the most and on which it is worth asking for explanations. Items in line with the budget, on the other hand, require no further checks.
- Difference in euros between spent and forecast
- Difference as a percentage of the forecast
- Items ranked by the significance of the variance
- Distinction between ordinary and extraordinary
Justified variances and variances to clarify
Not all variances are critical. Extraordinary maintenance approved by the meeting during the year, an increase in the price of an energy supply or an urgent action for a fault are legitimate causes that explain an expense higher than forecast. The explanatory note should account for them.
The case of an ordinary item that greatly exceeds the forecast without any explanation, or of an unapproved expense that appears in the final accounts, is different. In these cases the question is a must: the manager has a duty to account for the management and to justify every significant variance.
From the comparison to the questions at the meeting
The comparison between budget and final accounts ends with a list of precise questions to bring to the meeting. Asking about a variance is not an act of distrust, but the ordinary exercise of control: a transparent management answers without difficulty.
The comparison is much faster when the software automatically places the budget and final-accounts items side by side with the variances already calculated. With AmministraPro you can see, from the private area, the comparison between forecast and spent for each category, with the differences highlighted: you find the features at /funzioni and the plans at /prezzi.
Frequently asked questions
Is a variance from the budget always a problem?
No. Many variances have legitimate causes: extraordinary expenses approved during the year, increases in supply prices, urgent actions. The problem is not the difference itself, but the absence of an explanation. A variance justified in the explanatory note is entirely normal.
Can the manager spend more than the budget without a resolution?
For ordinary expenses the manager operates within the framework of the approved budget; for extraordinary works a meeting resolution is normally required, except in cases of urgency provided by Article 1135 of the Italian Civil Code, on which the manager must then report to the first meeting. An extraordinary expense neither approved nor urgent must be clarified.
Where do I find the year's budget to compare?
The budget is attached to the minutes of the meeting that approved it at the start of the year. If you do not have it, you can request it from the manager together with the statement: it is a document needed for a meaningful comparison and is among those you have the right to consult.
Is a large variance a reason not to approve the statement?
It depends on the explanation. A well-justified variance consistent with the resolutions is not in itself a reason not to approve. A significant and unexplained variance, on the other hand, may justify a vote against or an abstention, with the objection recorded in the minutes.
Should I compare all items or only some?
It is best to calculate the difference for all items but focus attention on the first ones by significance of variance. Items in line with the budget need no deeper look; those with significant differences are the ones for which to request the supporting documents and explanations.
Try AmministraPro
Accounting, thousandths-based cost splitting, meetings, communications and artificial intelligence in a single Italian software, compliant with UNI 10801 and GDPR.