P&L + cash vs plan (variance analysis)
Explain the gap between what was budgeted and what actually happened, line by line, with a reason for each material variance.
This is where investors with finance backgrounds spend real time before the meeting; Suster notes boards should get the actuals-vs-budget table, not just the actuals.
- Actual vs. budget for revenue, COGS, opex, and net burn
- A one-line reason for every line item off plan by more than 10%
- Cash balance at quarter start and end, tied to the runway number on the dashboard
- Line items with no variance explanation, just a red or green cell
- Currency rounding that obscures a real miss (e.g. '$300K' instead of '$312K')
- A large variance with no explanation attached
- Cash on this slide doesn't match cash on the KPI dashboard
- Explaining every miss as 'timing' without naming what actually shifted
- Averaging variance across the year to hide a bad month
- · Does every line item over 10% variance have a one-sentence reason attached?
- · Would a director unfamiliar with the business understand why burn came in high?
[Line item]: $[actual] vs. $[budget] ([+/-X]%) , [one-line reason]
"Spend was a bit higher than planned this quarter due to various factors."
"Opex: $312K actual vs. $280K budget (+11%), driven by two early sales hires pulled forward from Q3 to close a $40K enterprise deal now instead of Q4."
Nimbus names the exact hires and the reason, so the board can judge whether the tradeoff was worth it, not just that a number moved.
Quick quiz
1. What must accompany any line item off plan by more than 10%?
- ○ A color code
- ✓ A one-sentence reason for the variance
- ○ Nothing, the number speaks for itself
- ○ A footnote citing GAAP
A variance without a reason forces the board to guess, or ask, using meeting time.
2. Why must cash figures match exactly between the P&L slide and the KPI dashboard?
- ○ It doesn't matter, they're for different audiences
- ✓ A mismatch signals sloppy finance tracking and undermines trust in every other number
- ○ Boards never compare slides
- ○ Only auditors check this
Directors cross-reference slides. An inconsistency raises doubt about the whole deck.