Which of the following is an issue in financial management?

Variance analysis is a crucial aspect of financial management because it involves comparing budgeted or planned outcomes to actual financial performance. This process helps organizations identify discrepancies, or variances, for various financial metrics, such as revenues, costs, and profits. By examining these differences, management can gain insights into operational efficiency, budgetary compliance, and areas that may require corrective action.

Variance analysis is vital for maintaining control over finances and making informed business decisions. It allows organizations to track performance over time, assess the effectiveness of financial strategies, and guide future budgeting processes. This analysis not only assists in identifying negative variances that could indicate potential financial troubles but also highlights positive variances that can inform strategic planning and resource allocation.

In contrast, marketing strategies, sales forecasting, and customer relationship management primarily focus on aspects of business operations outside the core functions of financial management, such as revenue generation, customer engagement, and market positioning. While these areas are indeed important for overall business success, they do not pertain directly to the financial management processes that include budget preparation, financial reporting, and performance evaluation through metrics like variance analysis.