01 · Basis
Which plan?
Original budget, latest forecast or another named scenario.
Variance analysis for FP&A
Move from the variance to the evidence behind it.
Précis prepares actual-versus-plan comparisons from named scenarios, then carries the investigation through approved hierarchies and permitted source detail. Finance decides what is material, tests the explanation and owns the commentary.
- Named scenarios
- Hierarchy drill-down
- Source context
- Finance review
NovaTech · Q1 2026 management P&L with KPIs
| Line / driver | Actual | Budget | Vs budget | Prior year | YoY |
|---|---|---|---|---|---|
| Revenue | 7,420 | 7,650 | −230 | 7,110 | +4.4% |
| Direct costs | (4,560) | (4,440) | −120 | (4,320) | −5.6% |
| Gross profit | 2,860 | 3,210 | −350 | 2,790 | +2.5% |
| Gross margin % | 38.5% | 42.0% | −3.5pp | 39.2% | −0.7pp |
| Operating costs | (1,240) | (1,280) | +40 | (1,180) | −5.1% |
| EBITDA | 1,620 | 1,930 | −310 | 1,610 | +0.6% |
| EBITDA margin % | 21.8% | 25.2% | −3.4pp | 22.6% | −0.8pp |
| Billable hours | 62,840 | 64,200 | −1,360 | 60,910 | +3.2% |
| Realised rate | €118.1 | €119.2 | −€1.1 | €116.7 | +1.2% |
| Utilisation % | 74.8% | 76.0% | −1.2pp | 73.5% | +1.3pp |
| Avg FTEs — billable | 142 | 140 | +2 | 137 | +3.6% |
| Avg FTEs — overhead | 40 | 40 | — | 39 | +2.6% |
| Avg FTEs — total | 182 | 180 | +2 | 176 | +3.4% |
Beyond actual minus budget
A movement is easy to calculate. Its meaning is not.
An explanation depends on which budget or forecast version was selected, which accounts make up the line, which organisational hierarchy applies and whether the movement is concentrated in a period, business unit, cost centre, project or another driver.
When those choices are rebuilt in each workbook, finance spends the review checking the analysis before it can discuss what the analysis means.
02 · Definition
Which accounts?
The approved statement mapping and sign convention.
03 · Structure
Which hierarchy?
The organisational view finance intends to explain.
04 · Driver
Which evidence?
The permitted operational or transaction detail behind the total.
One comparison, then narrower questions
Define, compare, drill and review.
- Select the governed comparison. Actual, budget, forecast and prior period are named scenarios rather than ambiguous columns.
- Locate the material movement. Use an approved statement or metric at the period and organisational level finance needs.
- Drill through the hierarchy. Move one level at a time through the permitted business structure.
- Inspect the supporting detail. Retrieve only the rows and dimensions exposed by the semantic view and access profile.
- Prepare the commentary. Structure the evidence and draft; finance challenges it and decides what is shared.
Figure cited
−€420K vs budget
Q1 2026 revenue movement, carried through the approved organisation hierarchy.
Trace to source
- P&L movementQ1 revenue below the approved FY26 budget comparison.statement pnl · actuals_vs_budget−€420K
- Service-line drillThe movement is concentrated in Cloud & Infrastructure.org hierarchy · immediate child breakdown−€310K
- Engagement detailTwo enterprise engagements are now scheduled for Q2.permitted project detail · timing category2 items
Source ledger row
| Period | Scenario | Service line | Engagement | Amount |
|---|---|---|---|---|
| 2026-Q1 | Actuals | Cloud & Infrastructure | Engagement #2845 | −185,000 EUR |
Comparability before commentary
Keep the basis stable as the question gets narrower.
The same metric definition, account mapping, scenario registry and hierarchy used for the headline comparison remain in force through the drill-down. Rates and percentages are recalculated according to their governed aggregation rule rather than summed as if they were currency.
If the requested comparison, dimension or detail is unavailable, Précis says so. It does not fill the gap with a plausible explanation.
Generic database MCP vs a governed finance MCP server →
Prepared, not concluded
The evidence can be prepared. The judgement cannot.
Thresholds can help organise a review, but materiality is contextual. A small movement may matter because it changes a covenant, exposes an operational issue or contradicts the assumptions behind a decision. A large movement may be timing already understood by the business.
Précis prepares the comparison and the route through the evidence. The analyst decides which movement deserves attention and what the business should take from it.
Revenue variance · Q1 2026
Revenue below budget by €420K
The movement is concentrated in Cloud & Infrastructure, where two enterprise engagements are now scheduled for Q2. Finance review required before publication.
Source context · Actuals through March · FY26 budget v2.1 · engagement detail available
Part of the reporting workflow
One governed comparison, several useful outputs.
Variance analysis can feed the recurring management report, an ad-hoc investigation or an Excel workbook. Because those outputs call the same governed definitions, the explanation does not need a different version of the number for each interface.
Questions finance teams ask
Variance analysis, evidence and review.
What is variance analysis in FP&A?
Variance analysis compares an actual result with a budget, forecast, prior period or another approved basis, then investigates the dimensions and operating drivers behind the movement. The calculation is only the start; finance still determines materiality and what the movement means for the business.
Can Précis compare actuals with both budget and forecast?
Yes, where those scenarios are configured and the user has access. Scenarios are named in the finance registry so the comparison basis is explicit rather than inferred from a workbook tab or column label.
How does hierarchy drill-down work?
Précis can filter an approved hierarchy node and show its immediate children, allowing finance to move through the organisation one level at a time. Available dimensions and members remain constrained by the finance model and the caller's permissions.
Does Précis write the variance commentary?
Précis can assemble the governed figures, supporting cuts and a concise draft. Finance decides whether the evidence supports the explanation, revises the language and signs off what is shared.
What happens when the data does not support a cause?
The system should state the limitation. It does not invent a driver or estimate a missing figure. The analyst can then request another permitted cut or obtain the missing evidence from the relevant owner.
Is Précis generally available?
Précis is pre-General Availability and is working with a small number of design partners. The read-only Précis Finance MCP engine can be self-hosted today.
Start with one variance your team already has to explain.
Bring the current comparison, the workbook and the questions finance asks before it signs off the commentary.