What is an Audit Trail?
Seasoned accountants will know that an audit trail is a detailed record of accounting data going all the way back to the initial source of the transaction. Audit trail reporting is simply the documentation of the precise steps and outcomes of individual accounting transactions that generate debits or credits. However, audit trail functionality is much more comprehensive than just specific amounts. Audit trail reports trace the exact source, timing, products, individuals involved, and other relevant details attached throughout the entire lifecycle of the entry.
The True Power of Audit Trail Functionality
The overarching benefit of audit trail features is the enhanced accuracy of your general ledger and financial management. Being able to pinpoint and analyze all the details surrounding your finances is critical for six main reasons.
1. Accurate Reporting
Errors in financial reports can have significant repercussions for any organization. Besides slowing down workflow, not having an efficient way to check or prevent data issues can be very costly. In 2012, JP Morgan Chase made a trading loss of $6.2B as a result of a user error in a spreadsheet that wasn’t discovered until it was too late. Consolidating the accounting data into a system that utilized audit trail could have avoided this. Audit trail works as a seamless stream of information attached to an individual transaction. This makes it easier to isolate problems, identify relevant stakeholders, and compare data sets to ensure reports are accurate.
2. Fewer Mistakes
Besides making your overall accounting more accurate, audit trail reporting gives you decisive quality control to help you catch problems before they become issues. As your staff tracks transaction details, being able to drill into the specifics lets them find mistakes sooner, which means they can be addressed with alacrity. Everything from reporting to decision making is empowered by definitive accounting data.
3. Financial Efficiency
Analyzing audit trail helps you define stronger procedures and internal controls to add greater value to your financial processes. For example, one of the most efficient uses for the audit trail is defining the exact amount of net earnings. Verifying the cost of goods sold is also done more accurately and easily with audit trail functionality.
4. Greater Security
Audit trail is a central feature for internal data security because it lets you track changes throughout the financial reconciliation process. This is useful both for maintaining accurate, up-to-date information and for identifying signs of users seeking to defraud the accounting. Time, user, and even location stamps can be rolled into the audit trail report, therefore if there are threats of data corruption and theft, the audit trail will show. With Accounting Seed’s audit trail, you see exactly who is doing what in the general ledger, with project accounting, and every other aspect of the accounting process.
5. Legal Compliance
Audit trail functionality is mission-critical for a broad range of industry and federal regulations including Defense Contract Audit Agency (DCAA) and ISO 27018 compliance. These requirements heavily rely on accounting systems to maintain high levels of data accuracy and security. Both of these require audit trail functionality. Audit trail is a core feature in meeting these requirements because it gives users the structure to protect and maintain data effectively. And, this allows auditors to do their job more efficiently.
6. Greater Strategies
Audit trails allow companies to visualize accounting trends and data to ensure that best practices are conducted all across every dimension of the business. Having historical information surrounding your accounting is vital for building sustainable growth strategies that eliminate costs and improve revenue streams.
Accounting Seed’s Audit Trail
The more detailed and robust the audit trail, the more secure and accurate your financial management will be. Accounting Seed’s audit trail is unique in that you can trace data around sales, accounting, and communications all in one database. From the moment you generate a debit or credit within Salesforce to recognizing it in the general ledger, Accounting Seed’s audit trail gives you total visibility of the account’s lifecycle.
Track your data seamlessly across cases and accounts, custom objects, contacts, leads, and opportunities in a single interface for a comprehensive history of your finances and activities. You also have options to drill down into the specific details of any individual record. This lets you fully define and analyze each component of your accounting process for the most accurate picture of your business’ performance. The robustness and flexibility of our audit trail help you meet any compliance regulations. Accounting Seed can also maintain extended audit trails to meet healthcare, federal, and other industry requirements. Most of all, we provide a secure way to quickly pinpoint accounting data so you can focus on higher business priorities.
Schedule a free demo today to explore how Accounting Seed helps you manage finances your way.