It is good practice to compare what actually happened in a month or a quarter with your original forecasts and then revise the budgets. This is why it is useful to keep a note of how figures have been arrived at; when you compare what actually happened in the period with what you budgeted for, you can see where your original budget was wrong and therefore constantly be creating a more realistic forecast. These differences are called variances. The more realistic your budgeting becomes, the fewer will be the variances and the better control you will have over your organisation.

These need to be provided in a timely fashion to enable those responsible for projects and for managing the organisation to see what is happening. Then they can either take corrective action or have reassurance that everything is going to plan. You need to make sure that financial information is communicated across the organisation, and ensure that reports produced are understood and presented in an easy to use form.

Monthly or quarterly financial activity reports are often referred to as management accounts.