Variance analysis refers to comparing the forecast to the actuals for a given time period. It is vital to measure whether the variance is:
- Favorable (actuals > forecasts)
- Unfavorable (forecasts > actuals)
Having the numbers and the charts readily available helps to make accurate and timely decisions.
Despite the importance of variance analysis, most companies tend to perform it for limited durations or perform it at the last moment. As a result, the treasurers take reactive decisions instead of proactive ones.
What’s inside the toolkit?
- An eBook that gives complete information on variance analysis. It discusses its purpose and applications in treasury, the traditional methods for calculating variances, and the best practices.
- A ready-to-use variance analysis template for all quarters, along with graphs to visualize and consume the data in a faster way.
How to use the variance analysis template?
- Simply enter the data for your forecasts and actuals for different quarters.
- The template will automatically calculate variance in your total cash inflows and cash outflows.
- Determine the variance for categories such as payroll, debt, investment, A/R, A/P, taxes, etc.
- Refer to the graphs to understand the variance in an efficient and faster way.
Need some help?
HighRadius AI-based cash forecasting solution supports performing variance analysis for multiple cash flow categories across multiple regions, entities, and currencies.
The HighRadius™ Treasury Management Applications consist of AI-powered Cash Forecasting Cloud and Cash Management Cloud designed to support treasury teams from companies of all sizes and industries. Delivered as SaaS, our solutions seamlessly integrate with multiple systems including ERPs, TMS, accounting systems, and banks using sFTP or API. They help treasuries around the world achieve end-to-end automation in their forecasting and cash management processes to deliver accurate and insightful results with lesser manual effort.