Investigating variances, moreover, when to do so is an important part of any business. A variance is the difference between a budgeted figure and an actual figure. It can happen in almost any area of a business—sales, costs, profit margins, etc.
There are five key factors to look at before your start Investigating variances. Theses are
- How big is the variance
- Can you control the variance
- The accuracy and reliability of your the budget
- Is there a cost-benefit trade of
- Your variance, is it a one-off event, or is there a pattern emerging.
You need to track your variances so you can spot opportunities for improvement, sooner rather than later. Investigate and taker action before you have hit the financial rocks of disaster. Investigating variances is of value, valuable, knowing when to do is invaluable. Your resources will be are focused towards issues with most potential for improvement, get your bottom line moving upwards, not downwards.
Conclusion and good to know
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