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27 February, 2015 - 09:57

Most organizations take budget variance to date into consideration each month, and then prepare a revised budget (or forecast) for the balance of the year. This step is particularly important if variances to date vary from the original budget in a major way. For example, if sales are less than projected because market conditions are less favorable than anticipated when the budget was prepared, managers may look for ways to increase sales or reduce expenses in order to avoid a loss for the year.