Variance in Accounting

What is Variance in Accounting ?

Variance in finance refers to the difference between an actual result and an expected result. In accounting, variance analysis is a process of comparing actual financial results to budgeted or planned results in order to identify differences and analyze the reasons for them. Variances can be either favorable or unfavorable, depending on whether the actual result was better or worse than expected. In project management, variance analysis can be used to assess the performance of a project by comparing actual costs, duration, or other metrics to the planned or budgeted amounts. Variance analysis is an important tool for decision-making, as it allows businesses to identify areas where they are performing well and areas where they need to improve.

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