Variance reporting helps management by:

Variance reporting is a crucial tool for management as it highlights the differences between expected outcomes and actual performance. This process involves comparing financial forecasts or budgets to the results achieved, allowing management to gauge how well the organization is performing against its goals. By identifying these variances, management can analyze the reasons behind the discrepancies. This insight not only assists in understanding areas needing immediate attention but also helps in strategic planning, enabling the organization to adjust its operations to improve future performance.

Through variance reporting, management can detect trends, assess the efficiency of resource utilization, and make informed decisions to align actual results with expectations. This comprehensive understanding empowers leaders to implement corrective measures in real-time and enhance overall financial health and operational effectiveness.

The other choices do not encapsulate the core purpose of variance reporting. While identifying new revenue streams and determining employee satisfaction may be important for overall business health, they are not direct outcomes of variance analysis. Similarly, revealing areas of operational success is a subset of variance reporting but does not represent its complete function, which also includes identifying areas of underperformance.