What is the purpose of a variance report?

A variance report is primarily utilized to identify the differences between planned outcomes and actual outcomes in a project or budget. It serves as a crucial tool for project managers and financial analysts to evaluate performance. By comparing the expected results against what actually occurred, stakeholders can gain insights into areas where the project is deviating from its goals. This allows for timely corrective actions to be taken, enhancing overall project management and ensuring that objectives are met effectively.

The importance of variance reporting is underscored by its ability to provide actionable information, identifying specific areas of concern—such as overspending or delays—that require attention. This process not only aids in maintaining accountability but also enhances future planning and decision-making.

In contrast, the other options fall short of capturing the primary function of a variance report. While calculating total expenses, analyzing user satisfaction, and summarizing project timelines may be related to overall project management, they do not directly pertain to the core purpose of assessing and explaining variances between what was planned and what was achieved.