Explainable variances and ones that need a question
Most variances have an ordinary explanation. The skill is sorting them quickly so your attention goes to the ones that do not.
| Usually explainable | Usually needs a question |
|---|---|
| Enrollment above or below the budget level | A one-month spike in repairs or another irregular cost |
| Five-week billing months | A discretionary line that rises month after month |
| Seasonal costs: January unemployment taxes, winter utilities, flu-season substitutes | Discounts or write-offs well above budget |
| Variable costs rising with enrollment: food, card processing fees | Any line you cannot explain from what you know about the month |
A useful habit: write one sentence explaining each large variance. If you cannot write the sentence, ask your bookkeeper.