Variance analysis

Decomposing the variance

A variance is broken down into price, volume, mix and timing where the underlying data allows, shown side by side against prior-period and budget comparisons, with root-cause notes on the largest movements each month and a short list of items worth a follow-up conversation.

Watching for tax-rate noise, not just operating noise

A margin swing at a Canadian business that sells into more than one province can come from a real operating change, or simply from a shift in the mix of HST-participating provinces (13% to 15% depending on the province) against GST-only provinces (5%). Separating that kind of tax-rate noise from a real price or volume change is part of the analysis, not an afterthought.

Corporate tax rate context

For a Canadian-controlled private corporation, the net federal rate on active business income is 9% up to the C$500,000 small business limit and 15% above it, so a variance in taxable income near that threshold has a real cash consequence worth flagging separately from the operating story.

Not only for large companies

Even a small business benefits from knowing whether a cost jumped because of price, volume or a one-time item rather than assuming the worst from a single number on a report.

How the analysis reaches you

The same named pod that closes your books each month writes the variance notes, so the explanation for a swing comes from the people who already reconciled the underlying accounts rather than someone reading the trial balance cold. Every note passes a senior review before it reaches you, and where a variance is large enough to matter for a lender covenant or a board question, that context is flagged in the write-up rather than buried in a spreadsheet column.

When timing, not the business, is the real story

A cost that jumps in one month and falls back the next is often a timing effect, a large supplier invoice landing a few days late, an insurance renewal, or a GST/HST remittance date shifting the month a payment clears. The analysis calls out timing separately from a genuine change in the business, so a board or a lender reading the report does not mistake a one-month blip for a trend.

Priced with the close, not billed separately

Variance analysis runs on the same pricing as the rest of your close, published on the pricing page with billing terms set out in your engagement letter, and questions about a specific line get a written reply.