Question

Have you tracked expenses to identify variances? If so, what method did you use?

Answer 1

Answer: Yes

Method: Accounting Software

Tracking of expenses are required in order to get actual figures of expenses – such as raw material expenses, labor expenses, and overhead expenses.

Budgets are prepared earlier and expenses are made now. There might be a difference between these two called variance, which is very important for rectification or required change.

In order to get those variances, tracking the actual expenses are necessary. These are provided through accounting software where actual figures are kept through data entry operation. Suppose Raw Material Expenses for the month of May, 2020 is required; this could be availed through the ledger balance of that account if the period is inserted there as 1st May 2020 to 31st May 2020.