Variance Bridge

Updated September 2026Finance Software Glossary

A variance bridge is a chart or schedule that explains the gap between two financial figures, such as budget versus actual profit, by breaking the total difference into named components like volume, price, mix, cost and currency. Each component adds or subtracts from the starting figure until it reaches the ending figure.

The bridge is usually drawn as a waterfall chart. It might start at budgeted EBITDA of 50, show plus 4 from price, minus 6 from volume, minus 2 from input costs and plus 1 from currency, landing at actual EBITDA of 47. The format forces every driver of the miss or beat to be quantified, which makes it a standard exhibit in board decks and monthly reviews.

Building one requires decomposition logic, since price, volume and mix effects overlap. Companies commonly fix a calculation order, such as volume at old price first, and apply it consistently so bridges are comparable month to month.

In software: OneStream and CCH Tagetik support variance decomposition in reporting on consolidated actuals versus budget. Prophix and Pigment let teams build bridge calculations in the planning model and render them as waterfall visuals for management reporting.