Budget variance

The difference between a project's planned budget and its actual cost, expressed as a dollar amount or percentage.

Example

A project budgeted at $20,000 comes in at $24,500 — a $4,500 (22.5%) unfavorable budget variance, typically caused by unbilled scope additions or underestimated effort.

Why it matters for agencies

Tracking budget variance project-by-project is how an agency owner spots which clients or project types are systematically running over — and scope creep that isn't caught and change-ordered is one of the most common root causes, since it adds real cost without a matching increase in revenue.