FP&A budget and variance model
Driver-based budget, rolling forecast, price-volume-mix. Build a year’s plan from volume, price, unit cost, heads and cost per head, load the actuals for the months closed, roll the forecast forward, and explain every dollar of the gap to plan in price, volume, mix, unit cost, heads, cost per head and non-pay, ending in an EBITDA bridge that ties to the forecast.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: fp&a budget and variance model.Updated 4 November 2026
Who builds it, and for whatThe workbook a company’s financial planning and analysis team runs every month: the budget the board approved, the actuals from the ledger once the month is closed, a forecast of where the year will land, and the explanation of the gap. The same analysis is what a private equity owner asks of a portfolio company each month, what a lender reads in a covenant compliance pack, and what a corporate development team rebuilds when it judges whether a target’s plan is credible. It answers three questions in order: how far from plan are we, why, and what will the full year be?
Every sheet below, in your browser, with its outputs and checks
Starter workbook free with an account. Worked model: one a month with Plus, every one with Pro. Downloads
| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Assumptions | ||||||||||||||||
| 2 | $m unless stated. Units in thousands; prices and unit costs in dollars; cost per head in $ thousands a month. All figures are illustrative. | ||||||||||||||||
| 4 | Input | Unit | Jan-26 | Feb-26 | Mar-26 | Apr-26 | May-26 | Jun-26 | Jul-26 | Aug-26 | Sep-26 | Oct-26 | Nov-26 | Dec-26 | FY26 | Notes | |
| 5 | Scenario and timing | ||||||||||||||||
| 6 | Scenario | # | 1 | 1 = base, 2 = downside, 3 = upside. Moves the months not yet closed; see the Scenarios sheet. | |||||||||||||
| 7 | Last month closed | month | 9 | Months 1 to this one are actuals, the rest reforecast. 1 to 9: actuals are typed for January to September. | |||||||||||||
| 9 | Plan: products | ||||||||||||||||
| 10 | Premium: plan volume, full year | ’000 units | 1200 | ||||||||||||||
| 11 | Premium: plan price | $ per unit | 80.00 | Net of trade discounts; flat through the year | |||||||||||||
| 12 | Premium: plan unit cost | $ per unit | 36.00 | Materials, conversion and freight to the customer | |||||||||||||
| 13 | Core: plan volume, full year | ’000 units | 3000 | ||||||||||||||
| 14 | Core: plan price | $ per unit | 32.00 | Net of trade discounts; flat through the year | |||||||||||||
| 15 | Core: plan unit cost | $ per unit | 17.00 | Materials, conversion and freight to the customer | |||||||||||||
| 16 | Accessories: plan volume, full year | ’000 units | 4000 | ||||||||||||||
| 17 | Accessories: plan price | $ per unit | 12.00 | Net of trade discounts; flat through the year | |||||||||||||
| 18 | Accessories: plan unit cost | $ per unit | 6.60 | Materials, conversion and freight to the customer | |||||||||||||
| 19 | Seasonality: share of the year’s volume | % | 6.0% | 6.0% | 7.0% | 7.0% | 8.0% | 8.0% | 8.0% | 8.0% | 9.0% | 10.0% | 12.0% | 11.0% | One curve for every product; must sum to 100% | ||
| 21 | Plan: departments | ||||||||||||||||
| 22 | Sales and marketing: cost per head | $k a month | 8.00 | Salary, bonus and employer costs, fully loaded | |||||||||||||
| 23 | Sales and marketing: non-pay, full year | $m | 30.0 | Phased evenly, a twelfth a month | |||||||||||||
| 24 | Sales and marketing: heads at the start of the year | heads | 110 | ||||||||||||||
| 25 | Sales and marketing: planned heads | heads | 112 | 114 | 116 | 118 | 118 | 120 | 120 | 122 | 122 | 124 | 126 | 128 | Average heads in the month | ||
| 26 | Supply chain: cost per head | $k a month | 6.00 | Salary, bonus and employer costs, fully loaded | |||||||||||||
| 27 | Supply chain: non-pay, full year | $m | 12.0 | Phased evenly, a twelfth a month | |||||||||||||
| 28 | Supply chain: heads at the start of the year | heads | 142 | ||||||||||||||
| 29 | Supply chain: planned heads | heads | 144 | 144 | 146 | 146 | 148 | 148 | 150 | 150 | 152 | 154 | 158 | 160 | Average heads in the month | ||
| 30 | General and administrative: cost per head | $k a month | 9.00 | Salary, bonus and employer costs, fully loaded | |||||||||||||
| 31 | General and administrative: non-pay, full year | $m | 9.0 | Phased evenly, a twelfth a month | |||||||||||||
| 32 | General and administrative: heads at the start of the year | heads | 75 | ||||||||||||||
| 33 | General and administrative: planned heads | heads | 76 | 76 | 78 | 78 | 78 | 80 | 80 | 80 | 82 | 82 | 82 | 88 | Average heads in the month | ||
| 35 | Reforecast: the months not yet closed, against plan | ||||||||||||||||
| 36 | Premium: volume against plan | % | 3.0% | ||||||||||||||
| 37 | Premium: price against plan | % | -1.5% | ||||||||||||||
| 38 | Premium: unit cost against plan | % | 2.0% | ||||||||||||||
| 39 | Core: volume against plan | % | -4.0% | ||||||||||||||
| 40 | Core: price against plan | % | 0.0% | ||||||||||||||
| 41 | Core: unit cost against plan | % | 3.0% | ||||||||||||||
| 42 | Accessories: volume against plan | % | 2.0% | ||||||||||||||
| 43 | Accessories: price against plan | % | 1.0% | ||||||||||||||
| 44 | Accessories: unit cost against plan | % | 1.0% | ||||||||||||||
| 45 | Sales and marketing: heads against plan | heads | -4 | Added to the planned heads of every month not yet closed | |||||||||||||
| 46 | Sales and marketing: cost per head against plan | % | 2.0% | ||||||||||||||
| 47 | Sales and marketing: non-pay against plan | % | 5.0% | ||||||||||||||
| 48 | Supply chain: heads against plan | heads | 0 | Added to the planned heads of every month not yet closed | |||||||||||||
| 49 | Supply chain: cost per head against plan | % | 1.5% | ||||||||||||||
| 50 | Supply chain: non-pay against plan | % | 3.0% | ||||||||||||||
| 51 | General and administrative: heads against plan | heads | -2 | Added to the planned heads of every month not yet closed | |||||||||||||
| 52 | General and administrative: cost per head against plan | % | 2.5% | ||||||||||||||
| 53 | General and administrative: non-pay against plan | % | 0.0% | ||||||||||||||
Select a cell to see its row, its schedule and the type of cell. Font colours: blue for inputs, black for formulas, green for links to other sheets. Scroll sideways to see every period.
Download
FP&A budget and variance model: the workbook
An Excel workbook with working formulas, no macros and no external links: the same model you can work with on this page.
- Browse without an accountPreview every model online, sheet by sheet, with its outputs and checks.
- Free accountWork with every model online: change the inputs, switch the case, see every formula. And every starter workbook, with its key schedules left blank to build.
- L3VLUP Plus$4.99/monthEverything in Free, and one worked model each billing month as an Excel file: every schedule built, formulas live, checks at zero, yours to keep.
- L3VLUP Pro$25/monthEverything in Plus, every worked model in the library, and the Pro applications.
- The worked model
- 12 sheets and 1,977 live formulas, all 6 schedules built and linked, every check reading zero. Change an input in Excel and the whole model moves.
- The starter
- The same inputs and layout with the price-volume-mix: revenue and margin variance left blank for you to build, each blank cell marked. The worked model is its answer.
What the base case says
- Full-year EBITDA, forecast
- $32.7m
- Full-year EBITDA, plan
- $37.4m
- Full-year EBITDA against plan
- $-4.7m
- Full-year revenue, forecast
- $240.6m
- Gross margin, full-year forecast
- 48.4%
- Revenue variance, year to date
- $0.9m
- Price variance on revenue, year to date
- $-0.3m
- Volume variance on revenue, year to date
- $1.8m
- Mix variance on revenue, year to date
- $-0.6m
- EBITDA against plan, year to date
- $-3.2m
- Heads in December, forecast
- 370
Read from the workbook as served, every input at its default. Periods: Jan-26, Feb-26, Mar-26, Apr-26, May-26, Jun-26, Jul-26, Aug-26, Sep-26, Oct-26, Nov-26, Dec-26, FY26. The figures are invented and move with whatever you type in.
What this model is
A finance team’s year in one workbook, for an invented consumer-products company with three product lines (premium, core and accessories) and three cost departments (sales and marketing, supply chain, general and administrative): the plan the board approved, the actuals for the months closed, a rolling forecast to the year end, and the variances between them.
The plan is built from drivers: volume by product phased by a seasonality curve, a price and a unit cost per product, and each department’s heads times a cost per head plus non-pay. Actuals are what the ledger booked; the forecast takes them for every closed month and a reforecast for the rest. Revenue and gross margin are split into price, volume and mix, direct cost into rate and volume, each department’s pay into heads and cost per head, and an EBITDA bridge walks from plan to actual and to forecast.
Uses: learning how a monthly variance pack is built and read, what price-volume-mix analysis separates, why the full-year outturn is actuals plus a reforecast, and how much of a year’s EBITDA still rests on the last quarter.
Seats: Private equity, Investment banking, Equity research and hedge funds.
How the schedules connect
Every row in the workbook is tagged with the schedule it belongs to; the inspector above shows the tag when you click a row. These are the schedules this model is made of and where each one lives.
Driver-based budget: volume, price, heads and cost per head
The plan by month, built from drivers
Assumptions, rows 10–19 · Assumptions, rows 22–33 · Plan, rows 6–11 · Plan, rows 14–19 · Plan, rows 22–27 · Plan, rows 30–34 · Plan, rows 37–41 · Plan, rows 44–48 · Plan, rows 51–55 · Plan, rows 58–61 · Plan, rows 64–65 · Headcount, rows 6–12 · Headcount, rows 28–30
Rolling forecast: actuals, reforecast and the outturn
Actuals to date plus a reforecast of the rest
Assumptions, rows 36–53 · Scenarios, rows 6–13 · Actuals, rows 6–10 · Actuals, rows 13–17 · Actuals, rows 20–24 · Actuals, rows 27–30 · Actuals, rows 33–36 · Actuals, rows 39–42 · Actuals, rows 45–48 · Forecast, rows 6–7 · Forecast, rows 10–15 · Forecast, rows 18–23 · Forecast, rows 26–31 · Forecast, rows 34–38 · Forecast, rows 41–45 · Forecast, rows 48–52 · Forecast, rows 55–59 · Forecast, rows 62–65 · Forecast, rows 68–70 · Headcount, rows 15–25
Price-volume-mix: revenue and margin variance
Price, volume and mix that add up to the variance
Variance, rows 22–26 · Variance, rows 29–34 · Variance, rows 59–63 · Variance, rows 66–71
Cost variances: rate, volume, heads and cost per head
Direct cost and departmental spend against budget
Variance, rows 37–40 · Variance, rows 74–77 · Cost Variance, rows 6–11 · Cost Variance, rows 14–19 · Cost Variance, rows 22–27 · Cost Variance, rows 30–35
EBITDA bridge: plan to actual and forecast
Plan EBITDA to actual, bar by bar
Bridge, rows 6–16 · Bridge, rows 19–22
Sensitivity tables
Two assumptions at once, without a data table
Forecast, rows 73–74 · Sensitivities, rows 5–6 · Sensitivities, rows 9–14
What you should be able to explain
- Why a budget is built from drivers, units, prices, heads and cost per head, rather than typed as revenue and costs, and what that makes possible when the actuals arrive.
- What price, volume and mix each measure, why volume is measured at plan price and plan mix, and why the three must add up exactly to the total variance.
- Why revenue can be ahead of plan while gross margin and EBITDA are behind it, and which variances show where the difference went.
- How a rolling forecast differs from the budget: actuals for every closed month, a fresh estimate for the rest, and a full-year outturn that moves every month while the plan does not.
- Why favourable and adverse are a sign convention a reader must be told, and why a cost below budget is favourable.
- How much of the year still depends on the months not yet closed, and how far a change in their volume or price moves the outturn.
What a reviewer looks for
- A variance explained only in total, so a price cut hidden by higher volume, or a mix shift towards cheaper products, never reaches the commentary.
- Price, volume and mix that do not add up to the total variance, usually because volume was measured at actual prices or mix was left out.
- A forecast that reforecasts months already closed, or adds a full year of reforecast to the actuals, so the outturn counts some months twice.
- Costs below budget reported as savings when they are hiring behind plan, which comes back as soon as the roles are filled.
- Mixed signs, revenue variances as actual less plan and cost variances as actual less plan too, so the bridge does not add up to the forecast.
Conventions this workbook uses
Stated on the cover sheet too. A model is only as trustworthy as the decisions it tells you it made.
- Monthly columns, January to December, with a full-year column. "Last month closed" on the Assumptions sheet decides which months are actuals; the months after it are reforecast. Units are in thousands, prices and unit costs in dollars, cost per head in $ thousands a month, everything else in $m.
- Every variance is favourable positive and adverse negative: actual or forecast less plan for revenue and margin, plan less actual or forecast for a cost. The bridge adds every bar to plan EBITDA and arrives at actual or forecast EBITDA.
- Price-volume-mix: price at actual volume, (actual price - plan price) x actual units; volume at plan price and plan mix, (actual total units x plan mix - plan units) x plan price; mix the rest of the volume effect, (actual units - actual total units x plan mix) x plan price. They sum to the revenue variance exactly. Margin uses plan unit margin in place of plan price, with a unit cost variance beside the price variance.
- Direct cost splits into rate, (plan unit cost - actual unit cost) x actual units, and volume, (plan units - actual units) x plan unit cost. Pay splits into heads, (plan heads - actual heads) x plan cost per head, and cost per head, (plan - actual cost per head) x actual heads, each worked month by month and summed. Non-pay is budget less actual.
- The reforecast is the plan moved by a change for each driver (volume, price and unit cost by product; heads, cost per head and non-pay by department), and the scenario moves volume, price, unit cost and non-pay again in every month not yet closed. A closed month is never reforecast.
- Operating costs do not move with volume: a department’s cost is its heads, their cost per head and its non-pay. Direct cost is the only cost that follows units. EBITDA is the last line; depreciation, interest, tax and cash are outside the model.
- The sensitivity grid is live formulas on the Forecast sheet’s remaining months, so every cell can be traced; its centre is the selected case.
What this model does not cover
Where its answer stops, so you know what to add before relying on it.
- Depreciation, interest, tax, the balance sheet and cash. EBITDA is the last line; the three-statement and 13-week cash flow models carry the rest.
- Working capital and accruals: actuals are taken as booked, with no month-end cut-off, prepayment or accrual adjustments.
- Currency, transfer pricing and intercompany eliminations for a business that sells in more than one country.
- Costs that move with volume inside the departments, such as sales commission or warehouse labour; only direct cost follows units here.
- A re-plan: the budget is fixed for the year, and a forecast that becomes the new target is a separate decision.
- Statistical forecasting from trends or seasonality in the actuals; the reforecast is the plan moved by the finance team’s view of each driver.
Build it yourself
The starter workbook
The price-volume-mix rows on the Variance sheet have been cleared: for the year to date and the full year, the revenue variance by product and its split into price, volume and mix, then the gross margin variance and its split into price, unit cost, volume and mix. The plan and actual units, prices, costs and mixes above them are complete. Build them so that the Bridge sheet walks from plan to actual EBITDA again. The check rows show when the parts sum to each total.
Blanks: Price-volume-mix: revenue and margin variance. Download it beside the worked model.
The path around this model
Understand it, drill it, read the build, then apply it to a real company.
Read · Guide · 11 min
Financial Modelling Best Practices: The Conventions That Make a Model Auditable
Read · Guide · 10 min
Scenario and Sensitivity Architecture: Building a Model That Can Be Stress-Tested
Read · Guide · 11 min
How to Review a Financial Model Before It Leaves Your Desk
Apply · Skill
Model Audit
Find the errors in a financial model before someone senior does.
Vocabulary: Price-Volume-Mix Analysis, Rolling Forecast, Gross Margin, EBITDA, Contribution Margin.
Questions about this model
What does price-volume-mix show in this model?
Revenue for January to September is $0.9 million ahead of plan, and that one figure hides three movements. More units were sold in total, worth $1.8 million at plan prices and the planned mix. But the extra units were mostly $12 accessories while $32 core units fell short, so the mix took $0.6 million back. And premium was discounted, costing $1.2 million in price, partly offset by firmer core and accessory prices, for a net price variance of minus $0.3 million.
Why is EBITDA behind plan when revenue is ahead?
Because costs moved more than revenue. Year-to-date EBITDA is $15.8 million against a plan of $18.9 million, $3.2 million short. Unit costs above plan took $2.2 million from gross margin, non-pay spending $1.2 million more than budget (most of it in sales and marketing) and pay rises above plan $0.5 million. Hiring behind plan saved $0.25 million, which is a timing difference rather than a saving.
Why is volume measured at plan mix?
So that it measures one thing: how many more or fewer units were sold in total. Sharing the actual total out in the planned proportions and pricing it at plan gives the revenue the company would have earned had only the quantity changed. Everything else in the volume effect is the shift between products, which is the mix variance. Measured this way, price, volume and mix add up exactly to the revenue variance, and the Checks sheet holds them to it for every product and in total.
Where will the year land?
The base forecast is full-year EBITDA of $32.7 million against a plan of $37.4 million, 12.7% short, on revenue of $240.6 million, close to the $240.0 million planned. The downside case gives $28.7 million and the upside $35.2 million. October to December carry more than half of the forecast EBITDA, so a 5% change in their volume moves the year by $1.9 million and a 1% change in price by $0.8 million.
Related models
Core modelling · Foundation
Integrated three-statement model
The operating model everything else sits on
Credit and restructuring · Core
13-week cash flow model
Weekly receipts, disbursements, revolver, liquidity
Core modelling · Core
Professional services utilisation model
Headcount pyramid, utilisation, realisation, profit per partner
Questions about this model
Discussions open here soon.