What threshold triggers a flux explanation?

Short answer

Most teams require an explanation when a change passes both a dollar amount and a percentage, such as $25,000 and 10%, often set by account.

A threshold keeps flux review focused. Without one, the team explains every line, including changes too small to matter. Set too high, a real misstatement passes without a second look. The threshold is a close policy: documented, applied the same way every period, and reviewed when the business changes.

How a dual threshold works

Using both a dollar and a percent test filters out two kinds of noise: large percentage swings on small balances, and small percentage moves on very large ones. With a threshold of $25,000 and 10%:

Change	Dollar change	Percent change	Explanation required?
Software expense, $20,000 to $28,000	$8,000	40%	No, under the dollar threshold
Payroll expense, $600,000 to $630,000	$30,000	5%	No, under the percent threshold
Accrued liabilities, $150,000 to $190,000	$40,000	27%	Yes, passes both
New legal reserve, $0 to $60,000	$60,000	Not meaningful	Yes, flagged on the dollar amount

Some teams flip the logic and require an explanation when either test is met, which catches more lines and creates more work. Others add a dollar ceiling that always triggers an explanation, whatever the percentage.

How thresholds are set

Start from materiality: The dollar amount is often anchored to a fraction of the materiality level used for the financial statements, so anything that could matter to a reader gets reviewed.
Vary by account: Cash, revenue, and accrued liabilities often get tighter thresholds than accounts that move on a fixed schedule, such as depreciation.
Handle new and zeroed accounts: An account that goes from zero to a balance, or back to zero, has no meaningful percent change, so it's tested on the dollar amount alone.
Line up with the auditors: Thresholds close to what external auditors expect mean close explanations can double as audit support.

Keeping thresholds consistent

Document the policy: Record the thresholds, the comparison periods, and who reviews the explanations.
Don't adjust mid-close: Changing a threshold to avoid an explanation defeats the control.
Revisit when the business changes: An acquisition or a step change in revenue usually means the old dollar amount no longer fits.

Setting the threshold in Ramp Stack

In Ramp Stack, the threshold policy is written once in a skill and applied at every close.

Step	How it works in Stack
Write the policy into the skill	Under Stack > Knowledge > Skills, the variance analysis skill holds the dollar and percent tests, whether a line has to pass both or either, any tighter thresholds for cash or revenue, and the dollar-only rule for new and zeroed accounts.
Run it from the connected ledger	Each close, the agent pulls current and prior balances from QuickBooks Online, NetSuite, or Sage Intacct and applies the tests account by account.
Show which test was met	The results land in a workbook that lists each account's dollar and percent change, so a reviewer can see why a line was flagged or skipped.
Explain only what passed	Accounts that clear the threshold get a draft explanation. Accounts under it aren't written up.
Keep the record for audit	The Session Audit Log records the sources the agent used and the actions it took, which supports the close explanations when auditors ask how lines were selected.
Change the policy in one place	After an acquisition or a step change in revenue, the team edits the skill, and the next close uses the new amounts. Skills are reusable, so a firm can apply one policy across its clients.