The term used to describe the difference between the amount of money that was budgeted and the actual amount of money spent is called budget variance. It represents the difference between the budgeted amount of expense or revenue and the actual cost or revenue incurred

. Budget variance can be either:

• Favorable (positive) variance : When actual expenses are less than budgeted expenses or actual revenue is higher than budgeted revenue.
• Unfavorable (negative) variance : When actual expenses exceed budgeted expenses or actual revenue is lower than expected

Budget variance is a key concept in financial management and budgeting, helping organizations analyze discrepancies between planned and actual financial performance and make informed adjustments