Variance reporting tracks actual fees and expenses against budgeted amounts at the phase level, identifying overruns and underruns with explanation. Most guidelines require notice before a defined variance threshold is exceeded.
Revised budgets typically require approval.
Alternative Names:
Variance Reporting, Budget-to-Actual Reporting
Why it Matters?
Advance notice is the obligation that matters, since guidelines commonly require notification before the budget is exceeded rather than reporting it afterward. A firm that discloses a projected overrun with the reason and a revised projection preserves the relationship, while one that submits an invoice exceeding the budget without warning damages it. The variance itself is expected in litigation; the surprise is what causes problems.
Frequently Confused with
Related terms
Frequently asked questions
When must variance be reported?
What damages the client relationship?
