Here's how to perform variance analysis in Excel to identify differences between expected (budgeted) and actual results:

1. Prepare your data:

* Organize your data into a table with separate columns for:
- Item/Category: This could be a product, department, expense category, etc.
- Budget: The planned or expected value for the period.
- Actual: The actual value incurred or achieved during the period.

2. Calculate the Variance:

In a new column, use a formula to calculate the difference between the budget and actual values. You can simply subtract the budget from the actual: `=Actual - Budget`

3. Calculate Percentage Variance (Optional):

To analyze the variance as a percentage of the budget, add another column and use a formula like: `=(Actual - Budget) / Budget * 100` This will express the variance as a percentage increase (positive value) or decrease (negative value) compared to the budget.

4. Analyze the Results:

* Review the variance column to identify significant differences between budgeted and actual values.
* Positive variances might indicate areas exceeding expectations (e.g., higher sales), while negative variances could represent underperformance (e.g., higher costs).
* Analyze the percentage variance column to understand the magnitude of the differences relative to the budget.

5. Enhance your analysis (Optional):

* Use conditional formatting to highlight significant variances (positive or negative) for easier visual identification.
* Create charts or graphs to visualize the variances across categories or time periods.
* Use PivotTables to summarize variances by category, department, or other relevant criteria.

Tips:

* Ensure your data is accurate and consistent for reliable analysis.
* Consider using data validation tools to prevent errors during data entry.
* Add comments to your spreadsheet to explain variances and potential causes.

By following these steps, you can effectively use Excel to perform variance analysis and gain valuable insights into the differences between your plans and actual outcomes. This information can be crucial for making informed decisions, improving budgeting accuracy, and identifying areas for improvement.