How the calculator works
- Change in $ = this month - comparison month.
- Change in % = change in $ / the comparison month's amount (ignoring its sign) x 100.
- Flag when |change in $| is at least the dollar threshold and |change in %| is at least the percentage threshold. If the comparison month was $0, the percentage is undefined, so the dollar test alone decides.
- The rule runs twice: month over month (MoM, against last month) and year over year (YoY, against the same month last year). YoY helps with seasonal lines, where a big move against last month is normal for the time of year.
Worked example
The sample loaded above is a fictional client with a $2,500 threshold and 20%. The month-over-month figures match the example in our thresholds guide.
| Line | This month | Last month | MoM $ | MoM % | Last year | YoY $ | YoY % | Flag |
|---|---|---|---|---|---|---|---|---|
| Contractors | $49,300 | $46,600 | +$2,700 | +5.8% | $41,200 | +$8,100 | +19.7% | No |
| Professional fees | $9,240 | $3,120 | +$6,120 | +196.2% | $3,400 | +$5,840 | +171.8% | MoM and YoY |
| Materials | $12,700 | $9,800 | +$2,900 | +29.6% | $11,900 | +$800 | +6.7% | MoM |
| Travel | $1,640 | $2,980 | -$1,340 | -45.0% | $1,500 | +$140 | +9.3% | No |
| Bank charges | $310 | $295 | +$15 | +5.1% | $240 | +$70 | +29.2% | No |
| Consulting income | $3,000 | $0 | +$3,000 | n/a | $0 | +$3,000 | n/a | MoM and YoY |
Contractors moved by more than $2,500 against last month but only 5.8%, so it isn't flagged MoM. Against last year it's up 19.7%, just under the 20% line. Travel fell 45%, but by less than $2,500. Consulting income is new, so there's no percentage and the dollar test decides.
Choosing thresholds
Scale the dollar threshold to the client. A practical starting point is about 1% to 2% of average monthly revenue, rounded to a simple number. Use 20% for the percentage, lower for accounts that should be stable (rent, insurance, software) and higher for lumpy ones (repairs, advertising, travel). If more than about five lines a month get flagged, the thresholds are probably too tight.
Go further
Frequently asked questions
When is a line flagged?
When the change is at least the dollar threshold and at least the percentage threshold. The same rule runs twice: this month against last month (MoM) and this month against the same month last year (YoY). If the comparison month was $0, there's no percentage, so the dollar threshold alone decides.
Why use two thresholds instead of one?
A dollar threshold alone flags big accounts like payroll every month on normal movement. A percentage alone flags tiny accounts, like bank charges going from $40 to $80. Requiring both leaves the changes that are large and unusual.
What thresholds should I start with?
A practical starting point is a dollar threshold of about 1% to 2% of the client's monthly revenue, rounded, and 20% for the percentage. Tune them per client. Our guide on materiality and variance thresholds has worked examples.
How is the percentage change worked out?
Change in dollars divided by the comparison month's amount, ignoring its sign, times 100. So a line going from $2,980 to $1,640 is -$1,340 and -45.0%.
Is my data sent anywhere?
No. The calculator runs in your browser. Nothing you type is uploaded or stored, and it's gone when you close the page. Download a CSV if you want to keep the results.
Is this audit materiality?
No. These are review thresholds for management reporting: they help decide which movements to explain to a client. They aren't a substitute for audit or assurance materiality.