--- title: "Budget vs Actual: How to Run a Monthly Review Meeting | MCC" description: "A practical routine for comparing your budget to actual results each month, finding the variances that matter and turning them into decisions." url: "https://mcc-solutionsnj.com/bookkeeping/guides/budget-vs-actual-monthly-review" --- Bookkeeping guide · Updated October 12, 2026 # Budget vs Actual: How to Run a Monthly Review Meeting A budget is a guess until you compare it with what happened. A monthly budget-versus-actual review is the habit that turns a budget from a document into a tool. It takes about an hour once the books are closed. By [Matthew Coleman](/about), MCC Solutions **Quick answer.** A budget-versus-actual review compares your budget with what happened, once the month is closed. Reconcile every account first, then run a profit and loss comparison against budget for the month and year to date in QuickBooks Online or Xero. Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [Closing entries and retained earnings](/bookkeeping/guides/closing-entries-and-retained-earnings) · [Void vs delete a transaction](/bookkeeping/guides/voiding-vs-deleting-transactions) · [NJ 1099 contractor rule (ABC test)](/bookkeeping/guides/nj-independent-contractor-rule-abc-test-2026) **Free tools:** [What should I charge per hour?](/bookkeeping/freelance-hourly-rate-calculator) · [Depreciation schedule calculator](/bookkeeping/depreciation-calculator) [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) ## Before the meeting: close the books The review is only as good as the month-end close. Every bank and card account should be reconciled, bills and invoices entered in the right month, and payroll posted. In QuickBooks Online or Xero, you can then run a profit and loss comparison against your budget for the month and for the year to date. If the books are late, the review becomes a debate about whether the numbers are right. Settle that first so the meeting is about decisions. ## Set up the comparison Show four columns: actual, budget, the difference in amounts and the difference as a percentage. Include the month and the year to date, because a single month can mislead, especially with seasonal or lumpy items such as annual insurance. If your budget was not spread by month, spread it with the same seasonality your sales usually show. Keep the budget fixed once it is approved. If you change it every time results differ, you lose the ability to see what changed. ## Decide which variances matter Not every difference deserves attention. Set a simple rule, such as looking at any line that differs by both a meaningful percentage and a meaningful amount. Start with revenue, then gross margin, then the largest expense lines. For each flagged line ask whether it is timing, a one-time event, a pricing or volume change, or an error. Timing differences correct themselves. Volume and price differences usually need action. Errors need a bookkeeping fix. ## Turn findings into actions Write down three to five actions at the end of each meeting, each with an owner and a date. Examples include raising a price on a service that runs under target margin, renegotiating a vendor contract, shifting marketing spend or holding a planned hire for a month. Review the previous list at the start of the next meeting so follow-through becomes routine. Update your forecast too. If revenue is running ahead or behind, the rest of the year should be re-projected rather than left on the original plan. ## A sample agenda A simple agenda keeps the hour productive. Spend ten minutes on revenue and margin, twenty on the largest expense variances, ten on cash and receivables, and the rest on actions and the updated outlook. Share the report a day ahead so people arrive with questions rather than seeing the numbers for the first time. Keep brief notes on why each major variance happened. Next year, those notes make budgeting far easier. ## Common mistakes One mistake is budgeting from last year's numbers without adjusting for known changes. Another is leaving owner pay or loan principal out of the picture, which makes cash look better than it is. A third is skipping months when things are busy. The busiest months are often when variances matter most. Your CPA can advise on tax implications of any large change. MCC Solutions prepares the monthly comparison from its bookkeeping and can sit in on the review if you want a second set of eyes. ## Common questions **What if I do not have a budget yet?** Start with last year's actuals adjusted for known changes, then refine it as you learn. An imperfect budget you review beats none. **How big a variance is worth investigating?** There is no universal number. Choose a threshold that fits your size and stick to it so the review stays short. **Should I change the budget when results differ?** Usually keep the original for comparison and create a separate updated forecast for the rest of the year. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) [### QuickBooks Online Monthly bookkeeping, cleanup and reconciliation in QuickBooks Online for New Jersey small businesses. Your account stays in your name. QuickBooks →](/bookkeeping/software/quickbooks-online)[### Xero Bookkeeping and reconciliation in Xero for New Jersey small businesses, including cleanup and moving from spreadsheets or another program. Xero →](/bookkeeping/software/xero) More guides - [Pricing and Margin Analysis for a Small Business](/bookkeeping/guides/pricing-and-margin-analysis-for-small-business) - [Financial Planning Before Selling or Adding a Partner](/bookkeeping/guides/financial-planning-before-selling-or-bringing-in-a-partner) - [New Jersey's New Independent Contractor Rule: What Small Businesses Need to Do](/bookkeeping/guides/nj-independent-contractor-rule-abc-test-2026) - [Moved Between NJ and NYC Mid-Year? How Taxes Work](/bookkeeping/guides/moved-between-nj-and-nyc-mid-year-how-taxes-work) Free tool - [Bookkeeping health check](/bookkeeping/health-check) [All guides](/bookkeeping/guides) Reach small business owners, freelancers and bookkeepers who read this guide: [advertise here](/advertise#bookkeeping). Do it yourself ### Household Budget and Bill Calendar Give every dollar a job, track what actually happened, and see which bills land in which month. [See what's inside ($19)](/toolkits/household-budget-bill-calendar) [Free sample](/toolkits/household-budget-bill-calendar#free-starter)14-day full refund Excel workbook ### Budget vs Actual Workbook Set a budget for each income and expense line, enter your actuals as the months close, and see what is over, what is under and where the year is heading. [See what is inside ($24)](/toolkits/budget-vs-actual-workbook) [Try the free starter](/toolkits/budget-vs-actual-workbook#free-starter) Also in the [Business Planning Bundle](/toolkits/business-planning-bundle): 4 products for $79 instead of $106 separately. Tallyfinch ### Books you keep on your own computer Tallyfinch does invoices, bills, bank import, reconciliation and the main reports, in a file you own. $99 once, then $5 a month for updates; the app keeps working if you stop the plan. It does not do payroll or sales tax filing. The free download records up to 60 entries. 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