Variance Analysis
The practice of comparing actual financial results against budgets, forecasts, or prior periods to identify and explain differences (variances).
Key Details
- Helps identify unexpected trends, operational issues, or opportunities for improvement.
- Common variance types include revenue variance, cost variance, and volume variance.
- Effective variance analysis requires timely, accurate data from reconciled financial records.
- In fintech, variance analysis often focuses on transaction volumes, fee income, and operational costs.