Budget Deviation Questions Answered

It's simpler than it sounds. A budget deviation is just the difference between what you planned to spend or earn and what actually happened. If you budgeted NT$200,000 for materials and spent NT$235,000, that's a NT$35,000 deviation.

Most businesses care about percentage deviations more than absolute numbers. A 5% variance on a NT$1 million budget is different from 5% on NT$50,000—even though both might need attention.

Depends on your business rhythm. For most companies we work with, monthly reviews make sense. You get enough data to spot patterns without drowning in daily noise.

But if you're in retail or hospitality with tight margins, weekly checks can save you from nasty surprises. Manufacturing businesses often prefer biweekly reviews tied to production cycles.

The key is consistency. Pick a schedule and stick with it through at least three cycles before deciding it doesn't work.

There's no universal answer—it varies wildly by industry. Service businesses might run 3-7% variances regularly. Manufacturing can see 10-15% swings based on material costs and exchange rates.

What matters more is consistency. If you're usually within 5% and suddenly hit 18%, that's worth investigating even if 18% isn't alarming for your sector.

Absolutely. Coming in under budget sounds great until you realize it might mean missed opportunities or quality shortcuts.

We've seen businesses celebrate low spending only to discover they'd underfunded marketing during peak season or delayed maintenance that cost more later. Track both directions and understand why each happens.

Compare to the same period last year, not last month. Your December numbers won't look anything like July's if you're in tourism or retail.

Build separate baselines for high and low seasons. A 20% revenue variance in January might be concerning, but in October it could signal early holiday shopping trends worth capturing.

Rolling 12-month averages help smooth out the bumps and show real growth trends beneath seasonal noise.

Honestly, it ranges from sophisticated software to well-organized spreadsheets. The tool matters less than the process.

Small businesses often start with Excel or Google Sheets—totally viable if you set them up right. Mid-size companies might use accounting software with built-in variance reports. Larger operations often need custom dashboards.

The best system is the one your team will actually use consistently. We've seen fancy software gather dust while simple spreadsheets drive real decisions.

This is huge for Taiwan businesses dealing with imports or exports. Currency swings can create deviations that have nothing to do with your operational performance.

Best practice: track both NT dollar amounts and the underlying units. If you budgeted for 1,000 units at US$10 each but the exchange rate shifted, you need to know whether you're buying more units or just paying a different rate.

Some businesses set currency buffers in their budgets—planning for a 3-5% exchange rate variance from the start.

Set thresholds before you need them. Most businesses use a tiered approach: under 5% gets noted, 5-10% needs explanation, over 10% demands corrective action.

But context matters. A 3% variance in payroll might be concerning (something's off with headcount or hours). A 12% variance in utility costs during an unusually hot summer? Probably fine.

Create clear decision rules for your team so they're not guessing when to escalate issues.

Twelve months gives you seasonal context without drowning in ancient history. You can spot recurring patterns and separate temporary blips from real trends.

For major capital expenditures or strategic initiatives, looking back 24-36 months helps. But for operational stuff, a year is usually enough to make informed decisions.

Great problem to have—but it still indicates your budgeting process needs work. If you're always coming in 15% under expenses or 20% over revenue, your planning assumptions are off.

This matters because budgets should guide decisions. If everyone knows the numbers are padded or conservative, they stop trusting the plan. Refine your forecasting methods to get closer to reality.

Some variance is expected and healthy. Consistently large favorable variances? That's a planning issue, not a performance win.