Panning adjusts the portion of a channel's signal that is sent to each output channel. In a stereophonic (two-channel) setup, the two channels represent the "left" and the "right" speakers. Two channels of recorded audio are available in the DAW, and the default setup sends all the "left" recorded channel to the "left" output channel, and all the "right" recorded channel to the "right" output channel. Panning sends some of the left recorded channel's level to the right output channel, or some of the right recorded channel's level to the left output channel. Each recorded channel has a constant total output level, which is divided between the two output channels.

The default setup for a left recorded channel is for "full left" panning, meaning that 100% of the output level is output to the left output channel. An audio engineer might adjust this so that 80% of the recorded channel's level is output to the left output channel, and 20% of the level is output to the right output channel. An audio engineer might make the left recorded channel sound like it is in front of the listener by setting the panner to "center," meaning that 50% of the output level is output to both the left and right output channels.

Balance is sometimes confused with panning, even on commercially-available audio equipment. Adjusting the balance changes the volume level of the output channels, without redirecting the recorded signal. The default setting for balance is "center," meaning 0% change to the volume level. As you adjust the dial from "center" toward the "full left" setting, the volume level of the right output channel is decreased, and the volume level of the left output channel remains constant. As you adjust the dial from "center" toward the "full right" setting, the volume level of the left output channel is decreased, and the volume level of the right output channel remains constant. If you set the dial to "20% left," the audio equipment would reduce the volume level of the right output channel by 20%, increasing the perceived loudness of the left output channel by approximately 20%.

You should adjust the balance so that you perceive both speakers as equally loud. Balance compensates for poorly set up listening environments where the speakers are not equal distances from the listener. If the left speaker is closer to you than the right speaker, you can adjust the balance to the right, which decreases the volume level of the left speaker. This is not an ideal solution, but sometimes it is impossible or impractical to set up your speakers correctly. You should adjust the balance only at final playback.