Budget Variance

Definition

The difference between what you predicted would happen and what actually happened—usually disappointing. It's how managers learn that forecasting is basically fortune-telling without the crystal ball.

Example Usage

Our revenue variance is unfavorable by $100K, so we need to explain why sales underperformed.

Origin

Modern financial management terminology from the 20th century.

Fun Fact

Favorable variances (spending less or earning more than expected) are celebrated, while unfavorable ones are investigated like crime scenes.

Source: Managerial accounting

Related Terms

Beginner

funded

The glorious moment when investors collectively agreed your idea was worth actual money, or at least worth betting against their own judgment. The point where 'someday maybe' becomes 'oh god we actually have to build this.'

💰 Finance / Accounting

Advanced

Fair Value Adjustment

A change in an asset's recorded value to reflect what the market currently thinks it's worth. Sometimes this is realistic; sometimes it's a company admitting it made a terrible investment.

💰 Finance / Accounting

Advanced

fully diluted shares

The total number of shares that would be outstanding if all convertible securities, options, and warrants were exercised—basically the shareholding version of inviting everyone who might show up to the party. It shows what ownership really looks like after employees exercise options and investors convert preferred shares.

💰 Finance / Accounting

Beginner

APY

Annual Percentage Yield—the interest rate banks advertise when it's high, and whisper when it's low. Compound interest's friendly name.

💰 Finance / Accounting

Intermediate

receivables

The collective pile of money that customers owe your business, representing either healthy cash flow or an impending collections nightmare depending on who's on the list. These are debts arising from sales on credit, sitting on the balance sheet as assets while you nervously check if people will actually pay. It's optimism quantified as a line item.

💰 Finance / Accounting

Beginner

tax-free

The mythical unicorn of financial transactions: money that the government has graciously decided not to touch. Income or purchases that escape taxation, usually because lawmakers needed to incentivize something or felt charitable that particular legislative session. The two most beautiful words in accounting, often followed by fine print and eligibility requirements.

💰 Finance / Accounting

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