# Understand variance management

Source: https://developer.avalara.com/products/crossborder/integration-guides/avatax-for-cdit/zee2523245585393/

Guide: AvaTax Cross-Border (Customs Duty and Import Tax)

# Understand variance management

Learn about managing tax variances between estimated and actual amounts after customs processing.

Variance is the difference between the estimated tax that was collected on a quote and the amount of tax that governments required you to collect after the item goes through customs. Customs authorities will provide you with documentation declaring the actual amount of tax charged for the item.

In AvaTax, you can adjust a transaction for variance by creating a transaction with a document type of `customsInvoice`. In this document, include a tax override for each tax type that differed between what you calculated and what customs actually charged. You can then run a variance report to view the differences in tax.

When you have variance, it is up to your own business practices to determine how your company will handle variance. Will you review your tariff codes to determine how and why the variance occurred? When a variance occurs that results in a credit, will you keep those funds and retain them in a separate fund for covering shortfalls? Will you provide a reimbursement for each transaction? Consult with your own tax attorneys and cross border experts.