What term is used for the process of comparing budgeted figures to actual figures?

The process of comparing budgeted figures to actual figures is referred to as variance analysis. This practice is crucial for organizations as it helps identify the differences between expected financial performance and the actual outcomes. By conducting variance analysis, businesses can evaluate their financial performance, pinpoint areas where they are over or under budget, and understand the reasons behind these discrepancies. This insight can lead to better decision-making, allowing management to adjust their strategies or operations accordingly to improve overall financial performance and enhance budgetary control.

While budget control and financial analysis encompass broader aspects of managing finances and ensuring budgets are adhered to, they do not specifically focus on the comparison aspect that variance analysis highlights. Forecasting, on the other hand, involves predicting future financial results, which is a different process from the retrospective comparison done in variance analysis.