Sometimes you've earned revenue you haven't billed. Sometimes you've been paid for work you haven't done. Both are normal, both sit on the balance sheet, and both trip people up.
Accrued revenue: you've done the work but not yet invoiced. You've earned it, so it counts as revenue now and sits as an asset until you bill.
Delivered £8,000 of work, sign-off pending, not yet invoiced: £8,000 accrued revenue.
Deferred revenue is the opposite. The client has paid, but you haven't delivered yet. The cash is in, but it isn't earned, so it sits as a liability until you do the work.
A client pays £12,000 upfront for six months. On day one that's £12,000 of deferred revenue, not £12,000 of income.
You release £2,000 into revenue each month as you deliver.
Now the useful bit. Variance analysis is comparing what you expected to what actually happened, and asking why.
Forecast revenue £50,000, actual £42,000: an £8,000 variance.
Don't stop at the number. Was a project delayed, so revenue slipped to next month? Did a deal fall through? Did you over-forecast? Each answer points to a different action.
Know what's accrued, know what's deferred, and every month compare forecast to actual and explain the gap. That's how you spot problems while you can still fix them.