This article will deal with the revenue variances. They basically compare a period (could be current month, current year, last estimation etc.) with a base period and analysis the deviations and their reasons. Variance analysis are good tools to explain the causes of deviations. For a financial controller it is important to explain the sources of deviation. Oftentimes, it is known that sales are higher or lower but most of the time unless a deep dive analysis has been made, the reasons of increase or decrease may not be clarified easily. Furthermore, an analyst also may want to see the deviations compared with the previous periods. They set the targets and enable the analyzer to see how much it have been approached to these targets by comparing budget with the actual figures periodically. Budgets are the main instruments for planning and controlling.
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