Although it could be argued that the advent of the Global Positioning System (GPS) has made the old piloting and navigation systems such as Loran, the sextant and even the compass obsolete, most experienced sailors aren't quite ready to put the older systems in a glass case labeled "Nautical Curiosities". Boat GPS, like any other piece of sensitive electronic gear, can fail, run out of battery juice, or even be dropped overboard in the case of hand-held models. And GPS systems suitable for tight piloting in poor visibility or for long bluewater voyages are often financially out of reach for the average mariner.
Of all the systems available to everyone, from the fishing boat to the "Daddy Warbucks" Gold cup racer, the compass still reigns supreme as the heartbeat of boat navigation and piloting.

Many rookie mariners, however, don't realize that the compass which came attached to the bulkhead of your boat is reliable only if you put out some effort to make it so.

First is calibration. You can reasonably assume that the needle pointed to magnetic north at the factory, but will it do so once it's installed in your boat? Probably not. All boats contain gear with ferrous (iron) content -from the motor to gimbaled drink holders- which create a complex magnetic field which can drag the compass needle in any number of misleading directions.

Almost all compasses come equipped with adjustment screws, and you can use them to calibrate the compass for your boat once it's installed. For this job, you need to find a "range" -a body of water with numerous reference points locatable on a nautical chart. Reference points can be shoreside objects such as stacks and microwave towers. In the water, good references are waterway markers, center spans of bridges, marina entrance buoys and so forth. Select a marker or buoy, which we'll call your "zero" position, and using the chart's compass rose, mark the magnetic courses from the marker (or buoy) to all reference points on the chart.

On a clear and calm day, motor into your range and anchor as close as you can reasonably (and legally) get to your zero position. Then, using your motor and rudder, rotate your boat around the pivot of the anchor until it's pointing toward a reference point previously marked as magnetic north from your position. (Rotating in that manner may cause your anchor to pull free, so you may have to simply motor around in the vicinity of the marker, staying as close as you can to the zero position.) While your boat is pointing directly at magnetic north, use the compass's adjustment screws to move the needle to due north.

Your compass is now calibrated, but only for north and south. Unfortunately, the magnetic fields in your boat will cause the compass to "deviate" from accurate magnetic courses other than north and south, so you need to make up a "deviation table".

To do this, maintain your zero position and point your boat toward another reference point previously marked on your chart. Let's say it bears northeast (45 degrees) from your zero position. But when you look at the compass, it reads 40 degrees! That's compass deviation.

There's no point to readjusting the compass for that error, because when you turn back to due north, the compass won't read north (0 degrees) anymore. Instead, you write down: "To achieve 45, steer 40". (Best would be a page with two columns, one headed "To Achieve", the other headed "Steer", since you'll be making many deviation notes before you're done.)
Now, rotating eastward to your next reference point, line it up, note the compass reading compared to the heading marked on the chart and write down the deviation. Continue on around until you're back to due north.

Back on dry land, it's time to prepare your formal deviation table. Most tables are prepared in increments of 5 degrees, but that's usually wishful thinking. Unless you have access to a formal bearing range -they do exist- you'll have gaps in your notations much larger than 5 degrees, due to lack of suitable reference points. To fill those gaps, you interpolate.
Interpolation may sound crude, but if you take a piece of graph paper, draw a straight line marked in 5 degree increments from north to south, then mark your deviations on each side of it (east side and west side), you'll be surprised to see that "connecting the dots" forms a very nice "S" curve. Magnetic fields on your boat don't act in a random manner; they move, as the boat changes headings, in a predictable fashion.

Using that S curve to fill in the blanks, your deviation table is complete. All that remains is to laminate it, or at least put it into a Zip-Loc baggie, and keep it near the compass. (I tape my table to the bulkhead alongside the compass.)
It's all very tedious, but it pays off in the long run. I remember a three-boat convoy headed from Boynton Beach, Florida to West End in the Bahamas. Before setting out, the three skippers agreed on a course of 85 degrees to allow for the Gulf Stream, but once we cleared the inlet, one boat was headed toward the Abacos, the other toward Ireland! Eventually they sheepishly fell in behind us, leading to a perfect landfall on West End.

With a properly calibrated compass, supported by an accurate deviation table, it's hard to go wrong.