Opex vs. Budget
Actual operating expenditure as a percentage of the approved opex budget, by cost centre or in total
What is Opex vs. Budget?
Operating expenditure (opex) versus budget compares actual day-to-day spending with the budgeted amount. It shows whether running costs are under control.
Opex affects profit directly each period, so tracking it is central to financial management.
How this KPI is measured
- Function
- Finance
- Sub-function
- Budgeting & Forecasting
- Industry
- All Industries
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Monthly / Quarterly
- Formula
- (Actual opex / Budgeted opex) × 100
How to calculate it
Divide actual opex by budgeted opex, and multiply by 100.
For example, if actual opex was 5,250,000 against a budget of 5,000,000, the result is 105%.
Break it down by cost centre and category, and look at whether differences come from volume, price or timing.
Where it is used
Controlling running costs
Spot overspends.
Forecasting profit
Estimate the year-end result.
Holding managers to budget
Give clear accountability.
How to improve it
Tips and common mistakes
- Explain variances, do not just report them.
- Watch prepayments and accruals timing.
- Set materiality thresholds.
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