Measures how closely a company sticks to its budget over a given period.

What it Measures ?

Are departments sticking to their budgets?

Relevant StakeHolders 

Department Heads, Finance Analyst

In-depth Use Case / Real-world Example

Budget Adherence Rate is calculated by comparing actual expenses to budgeted amounts. For example, if a company had a budget of ₹500,000 and actual expenses of ₹450,000, the budget adherence rate is 90%. Maintaining a high budget adherence rate demonstrates good financial planning and control. A company with low adherence may need to reassess its budgeting processes or deal with unforeseen costs.