Examining the difference between actual results and a budget, forecast or other comparison, and explaining its causes.
Variance analysis starts with a comparison between an actual result and a planned or reference amount. The analyst checks that the figures cover comparable activity and periods, calculates the difference, and investigates what caused it. For costs, this can involve comparing actual expenditure with planned or target costs and examining the underlying transactions. A difference is a starting point for explanation, rather than a conclusion about performance. The comparison basis matters because a result can differ from the budget while remaining close to a revised forecast. Useful commentary identifies which comparison is being made and explains the drivers.
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At Holt Renfrew in Toronto, an operations finance analyst was expected to explain differences in the figures during the monthly close. A variance is a starting point for that explanation. Commentary gives the people reading the results a reason for the difference, beyond the amount by which the figures diverged. Search local jobs for “finance”.
