Creating a Rule

FloQast AI Variance Analysis uses Rules to define exactly which accounts to monitor, how to compare them, and when a variance is flagged as material. Each Rule lives inside a Rule Collection and is configured in three sections: Rule Setup, Conditions, and Outcomes.

The Rule Setup section defines the core identity and structural context of the rule. Navigate to Reporting > AI Variance Analysis and click Add Rule.

Create a Rule Wizard

The Create a Rule Wizard is divided into three sections: 

• Rule Setup: Defines the rule name, statement type (Income Statement or Balance Sheet), and description. While general settings are established here, workflow assignments are managed within the Outcomes section.
• Conditions: Specifies the data source, materiality thresholds, and filtering logic—including dimension groupings and matching values. This section also configures sign-flipping options such as Statement-Aware and Normal Balance.
• Outcomes: Determines the automated schedule and identifies the designated Preparers and Reviewers, along with their respective due dates.

Section 1: Rule SetupBack to top ↑

Once the Create a Rule set up wizard opens: 

1. Enter a Rule Name that clearly describes what this rule monitors (e.g., "Revenue MoM" or "Payroll Expenses QoQ").
2. Select the Statement Type (Income Statement or Balance Sheet).
3. Provide a Description for the rule to give context to your team.
4. Select the Rule Collection this rule belongs to from the dropdown.

Section 2: Conditions Back to top ↑

The Conditions section defines data sources, filer logic, and grouping parameters

Select Data Source: Choose the FloQast entity for analysis via the Select data source dropdown.

Configure Filters and Grouping: Use custom parameters to isolate GL data:

• Dimension Grouping: Select GL Data or an FDM-derived Dimension Grouping.
• Dimension: Select a data layer like Department or Subsidiary.
• Condition: Choose an operator such as Equals or Starts with.
• Matching Value: Input the specific value to complete the rule.

Add Multiple Conditions: Click + Add Condition to layer additional filtering logic. Examples are provided below the screenshot. 

Here are some Filter and Grouping configuration examples: 

Example 1

In this example, we are analyzing all GL accounts (second condition) associated with the Income Statement group (first condition), using data from the Primary Accounting Book (third condition). The Financial Statement Grouping utilized here is defined in the Financial Data Model. Please note that this analysis includes consolidated balances, as no specific subsidiary was selected.

Example 2

This Filters and Groupings example examines a population similar to Example 1, with one key distinction. While Example 1 analyzed consolidated balances across all subsidiaries, this example incorporates a fourth condition to isolate data specifically for Honeycomb Mfg.

Example 3

In this example, we are analyzing all GL accounts within the Expense group (first condition). The data is sourced from the Primary Accounting Book (third condition), utilizing the Financial Statement Grouping defined in the Financial Data Model. Furthermore, Expense accounts are segmented by Department (fourth condition). As no specific subsidiary was selected, this analysis includes consolidated balances.

Section 2: Conditions (continued) (Comparison Period and Materiality)

The Conditions section establishes the timeframe and numerical thresholds used to determine exactly when a variance is flagged for review.

1. Set the Current Period: Click the Current Period dropdown to select the primary reporting timeframe you want to analyze.
2. Select Amount Type: Use the Amount Type dropdown to define how the values should be calculated (e.g., Functional Default Amount).
3. Establish Baseline Thresholds:
   • Never explain amounts below: Enter a minimum dollar value. Any variance below this amount will automatically be ignored.
   • Always explain amounts above: Enter a maximum dollar value. Any variance exceeding this amount will always trigger a mandatory explanation.
      

Configure the Comparison Period: 

• Click the Comparison Period dropdown to select the historical timeframe you are comparing against the Current Period (e.g., Prior Month, Same Period Prior Year).
• Define Materiality Conditions: Set the mathematical parameters for flagging variances:

• Logic Selector: Use the toggle to specify whether Any or All conditions must be met.
• Materiality Condition: Select an operator (e.g., Greater than or equal to).
• Format: Choose whether the threshold is an Amount or a Percentage.
• Value: Enter the numeric threshold.
• Tip: Click + Add Materiality Condition to add more rules, or the trash icon to remove them.

Section 3: OutcomesBack to top ↑

The Outcomes section handles workflow management, automated timing, and ownership assignments. This section is where you define the Automated Schedule for when the rule should run.

1. Assign Preparers to provide explanations for flagged variances.
2. Assign Reviewers to evaluate and approve those explanations.
3. Set the Due Dates for both Preparers and Reviewers.

Review your rule settings, then select Save and Publish.

With your rule saved, it will run automatically on its designated schedule. You are all set up to complete the new and improve financial variance analysis workflow, Up Next: AI Variance Analysis Finalizing and Sign-Off
 

If you have additional questions, contact support@floqast.com.

🎓 Ready to learn more? Accelerate your reporting and variance analysis workflow with our interactive FloQademy course: FloQast AI Variance Analysis: Setup, Use, and Best Practices. This course is CPE-eligible through the FloQast AI Variance Analysis & Reporting program.

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