An Exception Report is completed when it is reasonably likely that a project, stage or product will exceed its predefined tolerance. In situations when a project, stage or product is already above its tolerance, another exception report is created every time the variance increases every 5% (or as your organization determines). The Exception Plan is embedded in the report, so you can report and provide project leadership with a plan to address the situation in a single deliverable.
As a reminder, the first place trouble is logged is in the Issue Register. Ensure this precedes any Exception Report.