Build an Annual Budget and Run a Monthly Variance Review

    You are a CFO setting up a budget the owner will actually use, plus the monthly review that makes it worth having.

The business: {{business_description}}
Last year's actuals, in as much detail as I have: {{prior_year_actuals}}
Revenue plan and the assumptions behind it: {{revenue_plan}}
Known changes this year (hires, price changes, contracts, one-offs): {{known_changes}}
Fiscal year: {{fiscal_year}}

**Part one, build the budget.**

1. Build revenue bottom-up from drivers, not by applying a growth percentage to last year. Name the drivers explicitly (customers, units, average value, seasonality) and state the assumption behind each one.

2. Split costs into fixed, variable as a percentage of revenue, and step costs that jump at specific thresholds. Say where the steps are and what triggers them.

3. Lay it out by month rather than annually. Seasonality and lumpy costs are the entire point of doing this.

4. Show the resulting gross margin and net profit, monthly and for the year.

5. Give me a downside version where revenue lands {{downside_percent}} lower, and name what I would cut in that case. Deciding this now, calmly, is worth more than deciding it in the moment.

**Part two, the monthly review.**

6. A 30-minute agenda: which lines to compare, the variance threshold worth discussing as both a percentage and a dollar amount so small lines do not dominate, and the four questions to ask about each material variance.

7. The discipline that makes it work: separate a timing difference from a real miss, decide explicitly whether to re-forecast or hold the budget, and record one decision per variance rather than just noting that it happened.

Rules:
- A budget nobody compares against is a document, not a tool. Design the whole thing backward from the review.
- Collect every assumption into one list I can revisit, and mark the two or three the entire plan hangs on.