Plan VS Actual chart in Excel | The BEST One!
How to perform plan vs. actual comparisons
Here are the fundamental steps you can take to perform a plan versus actual comparison, though the process can vary depending on the business product costs and sales cycle:
1. Make a plan
Make some predictions about your sales performance to begin with, and then plot them on a chart. Include details like the products’ names, how many units you anticipate selling, and their prices. Include the costs of any extra services or accessories that may be included with the product. Then determine your total expected profit.
2. Record the actual results
Place your sales results on a chart once your sales cycle is over. The same categories from the prediction chart should be included, but only sales performance information. Then, calculate your total actual profits.
3. Compare the plan and the results
You can evaluate the discrepancies between the numbers you anticipated and the actual results now that you have both charts. You can determine which areas of predictions to evaluate by looking at the variance in these numbers. Then, take into account any context that could explain specific changes. For instance, if a business sells umbrellas, dry seasons may see lower sales.
4. Implement changes
Make a plan for how to modify your management and sales strategies. Implement the changes you’ve identified as the business strategies you can modify in upcoming sales cycles. You can keep using the comparison between the plan and the actual results, incorporating what you’ve learned into your predictions to boost their accuracy over time.
What is a plan vs. actual comparison?
Businesses use the plan versus actual comparison to assess predictions against actual outcomes. You start by making a financial forecast, then you come up with plans to make sure your prediction comes true. You check the actual data for variance after the event on which you based your predictions has occurred. The difference between the two sets of data is called “variance,” and it indicates the adjustments you can make to your subsequent prediction to get better results.
Example of plan vs. actual comparisons
Heres an example of a plan versus actual comparison:
Example of a sales plan
Heres an example of a sales plan:
The Triumph Bike Shop sales team creates a sales forecast by dividing the anticipated number of bikes sold by the average unit price. They base their forecasts on the shop’s past performance as well as the management team’s expectations for the shop’s future performance. They use this chart to record their predictions:
Example of actual results
Here’s an illustration of what happens when a team creates a sales plan in practice:
The sales staff at Triumph Bike Shop keeps track of their actual sales data from January to March. Then, they deduct these findings from their earlier forecast. The accounting report looks like this before the variance is discovered:
Example comparison of a plan and the actual results
Heres an example of a plan versus actual comparison:
Triumph Bike Shop’s sales team uses positive numbers in their accounting records to show positive variance because more units were sold, the average price was higher, or sales were higher. The sections with negative numbers show negative variance.
The team could also use negative numbers to record lower than anticipated expenses in a table that displays the company’s expenses and consider that a positive variance. The team could also use positive numbers to record expenses that were higher than expected and treat that as a negative variance. The table below displays the discrepancy between the sales plan and actual results for the team:
Why do sales teams use plan vs. actual comparisons?
Making plan versus actual comparisons is crucial for sales teams and their managers to do throughout each sales cycle The team can use the detailed accounting to better understand how the company performs in specific areas and to gather information that the business can use to modify its management strategy. Recognizing the discrepancies in the company’s financial records can show how inconsistent predictions and outcomes are.
Completing a plan versus actual comparison may also help your team get better at planning. You could modify future sales plans to increase the company’s profits, for instance, if your sales team uses the results of a plan versus actual comparison to discover that selling fewer units at higher prices is a wise strategic move. You and your colleagues might also decide the following using a plan versus actual comparison:
FAQ
What is the difference between forecast and plan?
Subtract the planned amount (in the example above, 36 units) from the actual amount (31 units) to determine the variance. In this manner, a variance that is less than expected is negative (31-36 = -5) For costs and expenses, less is better. Subtract the actual amount from the anticipated amount to determine the variance.
How do you analyze budget vs actual?
A forecast is a prediction of upcoming events made using methods other than just a wild guess. Contrarily, a plan outlines the company’s strategy for responding to a demand forecast.
