Certified Treasury Professional Practice Exam

Variance analysis primarily aids in the detection and analysis of discrepancies between expected and actual results. In treasury management, this involves comparing budgeted figures or forecasts against actual performance metrics to identify variances. By investigating these discrepancies, treasury professionals can gain insights into underlying issues affecting financial performance, such as unexpected fluctuations in cash flow, changes in interest rates, or operational inefficiencies.

This analysis allows organizations to assess their financial projections and operational effectiveness. It provides a critical feedback loop for management, encouraging adjustments to budgets, enhancing financial strategies, or implementing corrective measures where necessary.

Understanding these variances is crucial for maintaining control over the financial aspects of the organization and ensuring that capital is being used effectively to support strategic goals.