Have you scrambled to find the exact amount of a transaction to close out the month? Maybe your team struggled to identify what went wrong in the reporting cycle or tried to understand how you achieved stronger sales last quarter. Answers to critical accounting errors, workflow issue solutions, and budget assessments can all be identified through an intuitive audit trail. Let’s look at why this is such a critical feature in your accounting system.
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 documents steps and the possible outcomes of individual accounting transactions that generate debits or credits. However, audit trail functionality is more comprehensive than just financial amounts. Additionally, audit trail reporting traces the source, timing, products, individuals involved, and other relevant details associated with the entire lifecycle of the entry.
The Benefits of Audit Trail Functionality
The overarching benefit of an audit trail is the enhanced accuracy of the general ledger. Secondly, the ability to pinpoint and analyze all the details surrounding your finances is critical for six main reasons.
1. Accurate Reporting
Financial reporting errors have significant repercussions for any organization. Besides slowing workflow, not having an efficient way to pinpoint and 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. Audit trail works as a seamless stream of information attached to each individual transaction. The information is all present. This makes it easier to isolate problems, identify relevant stakeholders, and compare data sets to ensure reports are accurate.
2. Fewer Mistakes
Audit trail reporting gives you decisive quality control to help you catch problems before they become issues. As your staff tracks and reports on transactional data, users are able to drill into the specifics and find mistakes sooner. Consequently, this means mistakes can be addressed with alacrity. Everything from reporting to decision making is empowered by definitive accounting data.
3. Financial Efficiency
Analyzing audit trail trends helps you define procedures and internal controls that enhance your financial processes for peak effectiveness. For example, you can use the information to validate the exact amount of net earnings more efficiently by examining delays or steps staff took to calculate. Also, you can use an audit trail to verify information faster. Simply look up dates and accounts and see what amounts and timelines look like.
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 data. 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 all other accounting processes.
5. Legal Compliance
Audit trail is mission-critical for a broad range of industry and federal regulations. Defense Contract Audit Agency (DCAA) and ISO 27018 compliance standards are just a few. These requirements heavily rely on accounting systems maintaining high levels of data accuracy and security. Both 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. Additionally, official auditors can use the feature to do their job more efficiently.
6. Greater Strate
6. Greater Strategies
Audit trails allow companies to visualize accounting trends and data to ensure that best practices are conducted 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 your audit trail is, 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. Here are some perks.
- 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 data seamlessly across all cases and accounts, custom objects, contacts, leads, and opportunities in a single interface.
- Use multiple options to drill down into the specific details of any individual record to get the answers you need.
- Fully define and analyze each component of your accounting process for the most accurate picture of your business’ performance.
- Maintain extended audit trails to meet federal, state, and other industry requirements.
The robustness and flexibility of our audit trail help you meet any compliance regulations. 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.