RAG REPORTING
Budget Variance Reporting and Programme RAG Reporting Are the Same Thing.
You Already Do This.
Every month you produce a budget variance report.
Revenue: £2.4m budget. £2.1m actual. £300k adverse variance. Reason: three contracts delayed. Action: accelerate Q3 pipeline.
You rate it: RED. Needs management attention.
Operating costs: £1.8m budget. £1.75m actual. £50k favourable. Reason: recruitment delay. Action: monitor — headcount plan at risk.
You rate it: AMBER. Under control but watch it.
Capital: £450k budget. £430k actual. £20k favourable. Reason: procurement savings. Action: none — tracking well.
You rate it: GREEN.
On an ERP implementation programme the Finance Workstream does exactly the same thing.
Gate 2.1 — Test Complete:
— SIT test pass rate: 95%. GREEN.
— Data migration reconciliation: 3 variances under investigation. AMBER.
— Payroll integration: CWM hours defect unresolved. RED.
The framework is identical. The content is different. The accounting judgment that tells you what is material and what is not — that is the same skill.
You have been producing RAG reports your entire career.
You just formatted them differently.
Discussion question: What is currently RED in your organisation's finance performance that is being reported as AMBER because nobody wants to have the difficult conversation?
Fall4U FCA FCCA — Future Defined Academy
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RAG REPORTING
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FDA teaches accounting students and finance professionals how to translate their finance knowledge into ERP, systems and transformation careers.
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