How to Complete a Flexible Budget Performance Report

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Responsibility Accounting: Benefits & Limitations

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
Your next lesson will play in 10 seconds
  • 0:03 Flexible Budget…
  • 0:49 Creation
  • 1:25 Getting Numbers
  • 1:53 Purpose
  • 2:43 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Speed Speed Audio mode
Lesson Transcript
Instructor: Kevin Newton

Kevin has edited encyclopedias, taught history, and has an MA in Islamic law/finance. He has since founded his own financial advice firm, Newton Analytical.

A flexible budget performance report can act as a report card on your department's flexible budget, letting people know what adjustments should be made to it for more accuracy in the future.

Flexible Budget Performance Report

As you probably know, budgets are rarely perfect. Truth be told, it's for the best that they're flexible. In fact, that's why we often call the budget from which expenses are planned the flexible budget. However, at the end of an accounting period, real numbers replace the flexible budget and other projections when accountants are trying to reconcile their data.

One of the most important documents to help accounting reconcile everything and plan for the future is the flexible budget performance report. In short, it does exactly what it says it does: it provides feedback on just how well the flexible budget performed under actual business conditions. In this lesson, we'll see how a flexible budget performance report is made, where the numbers for it come from, and the reasons for making one in the first place.


So, the flexible budget performance report is written at the end of every period. The process of making one is very straightforward. First, list all categories in which expenses were accrued. Then, in the next column, list all the actual expenses. Next to those, include the relevant figures from the flexible budget. Finally, in the final column note the difference between the actual expenses and the flexible budget. If there is a difference, be sure to notate whether or not the variance was favorable, meaning money was saved, or unfavorable, meaning more money had to be spent than was budgeted.

Getting Numbers

Luckily, the numbers to create the flexible budget performance report are relatively easy to find. You should have access to the actual amounts spent by your department from receipts. The flexible budget provides the planned numbers. To find the variances, simply subtract the actual amount spent from the corresponding number from the flexible budget. Be sure to notate whether or not the result is negative or positive, as this will inform if it's an unfavorable or favorable variance.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account