|
|
|
Variance Analysis
Most companies conduct variance and fluctuation analyses either in spreadsheets or with a very limited capability in their GL or ERP system. BlackLine's Variance Analysis provides a natural repository for variance monitoring, explanations, and analysis. A history of all balances for all accounts are stored within the application. The system incorporates the ability to define "Variance Rules" which, if broken, require variance explanations to be made.
Variance Analysis is typically a tool used by management in determining where variances are occurring within the company and what they might mean for the bottom line. One difficulty with variance analysis is work flow communication. While the executive or manager may be able to easily identify the accounts that have variance, the actual reason (or reasons) for it are usually known at a much lower level within the organization (i.e. the preparer of the reconciliation or the owner of the account.)
Variance Rules can be for Actual vs. Budgeted balances within a single time period, month-over-month, quarter-over-quarter, year-over-year, or YTD. They can apply to single GL accounts or groups of accounts. Variance rules can be applied to ranges of accounts or specific areas of the company. The flexibility with variance rules is virtually unlimited.
Variance Analysis automates a manual process whereby a manager maintains a spreadsheet and makes multiple phone calls and entries regarding the reasons for variance. With flexible rules, variance analysis can be used much more extensively to manage risk throughout an organization without adding additional workloads.
|
|
|
|
 Replaces a manual, people-intensive process with proactive monitoring by the system for "breakage" of variance rules
Automatically requires responsible parties to explain variance
Produces consolidated fluctuation analysis reports for management
|
|
|