Planning is the best way to prepare for success. This is especially the case in corporate and business finance. The budget is the master plan for the financial world. Preparing a budget report is about more than regurgitating numbers -- managers want to know how the budget applies to them. They want to know how actual numbers stack up against budgeted numbers and what other departments or functional areas are doing. They also want to know what's going to happen to the budget in the future.

Step 1.

Obtain the current budget. This is the budget created in the previous year.

Step 2.

Obtain the actual spending numbers for the past 12 months.

Step 3.

Conduct a variance analysis. Compare the actual spending against budgeted spending. Calculate percentages by subtracting the difference between actual and budgeted spending by budgeted spending. For instance, if the budget allowed for $100 in equipment purchases and the organization actually spent $500, divide $400 ($500 minus $100) by $100 for the variance percentage, which is 400 percent.

Step 4.

Compare the variances over time and explain why they occurred. Start with the highest variance percentage. Discuss trends and explain if these are one-time variances or regular.

Step 5.

Prepare a recommendation to those groups that are over- or underbudget.