Month End Glossary

Variance Analysis

Variance Analysis is the process of comparing actual financial or operational outcomes to the expected or planned figures to detect and analyze deviations.

Variance Analysis is a systematic approach to identifying and understanding differences (variances) between planned objectives and actual results in financial and operational performance. It is a key component of performance management and helps organizations assess their budgeting and forecasting processes. For example, in a company, variance analysis might involve comparing the actual sales revenue achieved for a month to the budgeted revenue for that period and analyzing the reasons for any discrepancies.

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