Set up Copilot Variance Analysis

You can configure Copilot Variance Analysis to compare your actual data against one budget that exists in Sage Intacct. If you have multiple budgets, the best practice is to use your operational budget that includes approved budget data.

The following are the budget requirements:

• The budget must be created at the top level.
• The budget must include all entities that you want to track.
• The budget cannot be configured as a consolidated budget.
• The budget should include a budget line for each GL account/budget reporting period/dimension combination that you want to track. If there is no corresponding budget detail, Copilot will assume the budget amount is zero.

Learn how to add a budget.

Copilot Variance Analysis uses the following account groups to analyze variance data:

• Net operating income
• Revenue
• Cost of revenue (if applicable)
• Operating expenses

The names of the account groups you want to use for these account groups may differ. The following are the account group requirements:

• All of the GL accounts in the account groups you want to use must have Account type = Income statement account.
• The Net operating income account group must contain the same GL accounts that are included in the Revenue, Cost of revenue, and Operating expenses account groups.

Learn how to view GL accounts and account groups.

Decide which financial report that you want to run for each dimensional analysis. For example, if you only want to analyze by department, use a financial report with rows structured by department.

The financial report must include the following to align with data presented in Copilot insights:

• Actuals for the current year to date (YTD) or current fiscal year to date (FYTD)
• Budget for the current YTD or current FYTD
• Actuals for the prior YTD or prior FYTD

If your company was created using any of the QuickStart templates, you can install one of the Variance analysis reports from the QuickStart library. For more information, see About the Variance analysis report.

Users will be able to launch the financial report directly from Copilot to investigate details on a reported variance. Note the following expected behavior when launching a financial report from Copilot:

• If the financial report is set up with prompts, you'll need to enter the prompts before viewing the report.
• If you choose to analyze by department and also by location or entity, Copilot will launch the location or entity financial report by default for unrestricted users (users who have access to financial information for the entire organization).

Copilot sends Variance Analysis notifications to:

• Budget managers identified as the department, entity, or location manager when operating expense actuals exceed budget for the applicable business unit.
• Finance leaders identified as an unrestricted user. An unrestricted user is someone who will have access to budget and actual information for the entire organization, like a controller or CFO. Your environment can include one unrestricted user or a group of unrestricted users.

To be eligible to receive Copilot Variance Analysis notifications, a dimension manager or unrestricted user must have:

• An employee record (dimension manager only). The employee record must be associated with the applicable user record.
• A user record with a Business or Employee user type.

Learn how to add employees and users.

A manager must be specified on each dimension record for the appropriate budget owner to receive dimension-level notifications. Depending on which dimensions you use for variance analysis, you'll need to assign managers to departments, locations, or entities based on how your organization manages the budget.

1. Do one of the following:
   • Go to Reports > Setup > Dimensions and select Departments.
   • Go to Reports > Setup > Dimensions and select Locations.
   • Go to Company > Setup > Configuration and select Entities.
2. In the applicable dimension list, select Edit next to the desired dimension.
3. Use the Manager dropdown list to select the desired manager.

   If you do not see the desired manager in the dropdown list, ensure there's an employee record for the manager.

4. Save the record.

When you configure Copilot Variance Analysis, you can specify an individual unrestricted user or a group of unrestricted users to which Copilot will send notifications. Unrestricted users will have access to all budget and actual information for your organization. Follow your internal business processes to determine who should have access to this data.

A user who is restricted to certain departments or locations cannot be a member of this unrestricted users group.

Learn how to create a user group.

Sage Intacct administrators can subscribe to Copilot Variance Analysis.

1. Go to Company > Admin > Subscriptions and select the toggle to subscribe to Sage Copilot Close Automation.
2. Select Configure.
3. Select Enable Variance Analysis.
4. Select Save.

After you subscribe to Copilot Variance Analysis, complete the configuration options found in the Budgets application.

1. Go to Budgets > Setup > Configuration and select Copilot Variance Analysis.

   The Configure Copilot Variance Analysis page appears.

2. Use the Budget dropdown list to select the applicable budget.
3. If your company's accounting method is Cash and Accrual, use the Reporting book dropdown to select either the Cash or Accrual reporting book. Otherwise, this field defaults to Accrual or Cash as applicable.
4. If you want to include other reporting books in the variance analysis, select the applicable Other books.
5. Do one of the following:
   • If you didn't select any other books, or if you did select other books and want to analyze data from both the main reporting books and the selected other books, select the Combine reporting book with other books checkbox.
   • If you did select other books and want to analyze data using only the other books, leave the checkbox blank. This is not common.
6. In the Budget insights account groups section, use the dropdown lists to select the Net operating income, Revenue, Cost of revenue, and Operating expenses account groups you identified earlier.
7. In the Analyze by section, do one or both of the following:
   • If you want to analyze budget data by location or entity, select the Location or entity checkbox and then select a Location or entity financial report.
   • If you want to analyze budget data by department, select the Department checkbox and then select a Department financial report.

   If you already have a financial report that shows budget variances by the location or entity or the department, select that report in the applicable dropdown list.

   If you don't already have a report, and your company was created using a QuickStart template, you can install one the Variance analysis reports from the QuickStart library.

   For more information, see QuickStart library: financial report templates.

8. If you want to receive email notifications, select the Email checkbox in the Notify channels section.
9. In the Notify when section, select the Operating expense actuals exceed budget checkbox, and then select the applicable Frequency. For example, if you select Weekly, the applicable dimension managers and unrestricted users will be notified when expenses exceed budget on a weekly basis.
10. In the Notify whom section, you must select at least one user or user group to notify.
    1. Select the applicable dimension managers checkbox. For example, if you selected to analyze by Department, select Department managers.
    2. Select an unrestricted user or user group.

       The unrestricted user or user group members are typically controllers, directors of finance, and so forth. They’ll receive insights related to variance analysis data for your entire organization.

       • To send insights to one unrestricted user, select the Unrestricted user checkbox. Then use the dropdown list to select the user.
       • To send insights to a group of users, select the Unrestricted user group checkbox. Then use the dropdown list to select the user group.
    To run Variance Analysis, users must meet one of the following criteria:

    • They must be the unrestricted user or a member of the unrestricted user group.
    • If you're analyzing by location or department, they must be a location or department manager.
11. Save the configuration.

All dimension managers and unrestricted users need the following permissions to use Copilot Variance Analysis:

• Sage Copilot Close Automation: Variance analysis—Run
• General Ledger: Drill down to all transactions from reports—Enable
• General Ledger: Reports: Financials—View

Learn how to assign user and role permissions.

Additionally, users need access rights to the financial reports you specified in the configuration. If your company denies financial report access to everyone by default, use the Permissions tab in the financials report to grant access to the applicable users.

Learn about financial report level permissions.