Audit Trails in Contract Management Software

Audit Trail

The concept of audit trails in business can spark a great deal of anxiety among executives and employees alike. They are often associated with the spectre of official investigations and legal wranglings and are quickly thought of as a defensive tool, designed to protect against allegations of wrongdoing, or corruption. While these things are all true, audit trails in business are of the utmost importance for reasons beyond defence of your operations. Indeed, with optimal use, audit trails can increase efficiency and accuracy throughout your enterprise, delivering tangible improvement across the board.

What is an audit trail?

At a fundamental level, an audit trail is a collection of documents that record and validate activity within your operation. In the most basic of terms, these documents answer three questions:

  • What? – A clear definition of the activity or event
  • When? – An accurate timestamp indicating the date and time of the activity or event
  • Who? – The identity of the person that initiated the incident or event, and all who participated

In wider society, we see examples of basic audit trails in a variety of settings, including visitor books for places of interest, businesses and institutions, and even in the ‘track and trace’ systems of national healthcare organizations. These simple information logs record activity (the details of visits, or identity, movement and contacts), and form a cumulative set of actionable data. That data allows for the identification of people on a property, or for the management of a public health crisis.

The same principles apply to audit trails in business – the recording of activity to create a cumulative set of actionable data. It is the choices made as part of the ‘actionable’ nature of the data that sets some businesses apart from others, in terms of success. It is the way in which you use the data that determines whether or not your business takes full advantage of the opportunities presented.

Sticking to the trail

The nature of your audit trails will depend upon the nature of your business. Likewise, the way you use the actionable data created will vary according to the needs of your operation over time. It is the case, however, that audit trails have many applications that apply to general business administration.

  • Evidentiary documentation - All businesses are subject to the legal requirements of government and regulatory bodies, and the maintenance of comprehensive audit trails makes official audits and investigations much simpler. At the same time, evidentiary documentation is important in terms of information provided to current and potential investors.
  • Budget planning - Audit trails within your Accounting Department provide you with vital information needed for effective budget planning. Analysis of this data delivers the opportunity to deploy funds in a more productive way, and also to identify areas that need to be cut.
  • Risk Management - The audit trails within every department deliver the information you need to assess risk – in terms of finances, compliance, and data protection – and this means you have the opportunity to adjust decision pathways accordingly, and in a timely fashion.
  • Accounts reconciliation - Comprehensive audit trails within your Accounting Department include all the information you need to speed up the process of accounts reconciliation. This is particularly effective in the case of digital audit trails.
  • Fraud detection and prevention - The close monitoring of activity within your operation, and in terms of financial and data transactions with outside parties, means that any fraudulent activity can be detected and addressed at an earlier stage. Additionally, the transparency of your auditing systems acts as a deterrent, preventing potential fraud from impacting your business in the future.
  • Increased accuracy - Regular review of data accumulated through audit trails provides the opportunity to further enhance accuracy throughout your organization. It is possible to identify areas of operation that are less productive and more prone to errors so that positive adjustments can be made.
  • Increased data security and compliance - With comprehensive audit trails – particularly relating to digital documentation – compliance with regulations pertaining to Personally Identifiable Information (PII) is increased. This aids your efforts in the prevention of data breaches and helps with faster recovery in the event of a data security incident.
  • Faster recovery in the event of disaster - If a disaster were to strike your business – through fire, flood, earthquake, data security incident, or terrorism – having a back-up collection of comprehensive audit trails will help you reconstruct your operation in a shorter timescale. It ensures that you are still able to comply with regulations during your re-building process, and enables you to get back up and running quickly, and with disruption minimized.

These various applications are most effective when audit trails are automated, as this minimizes the risk of human error while increasing the accuracy and potential efficacy of the audit trails themselves. This high level of automation can be achieved with Contract Management Software.

Using Contract Management Software to create actionable audit trails

When you integrate browser-based Contract Management Software with the processes used across your business, you gain the ability to create and customize digital audit trails. Due to the fact that contracts intersect with every area of your enterprise, from Sales to Human Resources, the benefits of this can be seen throughout your organization, with a comprehensive catalog of actionable data then being available.

Browser-based Contract Management Software platforms use Permission-Based Access Control, which means that all activity relating to user access and the modification of data is recorded. This allows for enhanced data security and compliance with all regulations and legislation pertaining to the same. Most specifically, it ensures accountability throughout your business. This is also supported by the fact that these systems are cloud-based and include unlimited storage capacity – something that is of the utmost importance in terms of secure back-ups and the retention of digital audit trail documentation.

But, while Contract Management Software allows for these audit trail functions, it is the way in which the audit trail content is harnessed that transforms them into truly productive data sets.

  • Reporting - When your business is creating comprehensive audit trails, the amount of data accumulated can become unmanageable very quickly. It is vital to have a system in place that can allow for this information to be filtered for the purpose of proper analysis. The proper analysis of audit trail data can achieve the many applications previously discussed, including budget planning, risk management, and a faster recovery in the event of a disaster, and the configurable reporting features of Contract Management Software get this job done.
  • Review - The periodic review of your digital audit trails can help tighten administrative controls throughout your Contract Management System and, consequently, your entire business. It can also help to identify problem areas, such as issues of non-compliance with government or company regulations, and incidents of inefficiency and over-spending. In addition, it enables you to identify current and potential fraud, along with weaknesses in your data security measures.

This is what we mean when we talk about the positive applications of audit trails, beyond the defensive function of the accumulation of evidentiary documentation. Contract Management Software connects with departments throughout your organization and, as such, is the key to taking real control of your audit trails. It represents a tangible opportunity to tighten control of your entire operation and see the benefits in your bottom line.

The most important benefit of all

In order for you to truly harness the power of your comprehensive digital audit trails, it is imperative that this particular data set be entirely secure. It may seem strange to discuss the security of a data set that itself can be used to enhance the data security measures of your business, but this is an area that must be addressed if your business is going to be compliant in terms of regulations and governance, and successful in terms of growth and expansion.

Browser-based Contract Management Software, such as Symfact, provides security for all the data generated by the system, including your digital audit trails. This is because this entirely configurable software employs data encryption and access controls throughout its processes. Moreover, with cloud-based storage, digital back-ups are protected, along with those held on your premises.

All of these benefits make Contract Management Software the best solution for your digital audit trail needs. By making this switch, and integrating this software package with your existing systems within your organization, not only do you gain all of the advantages that comes with tighter control of your contract documentation, but you also have the opportunity to learn about the efficiencies of your administrative processes, and make the necessary adjustments to improve the way your business operates.

The increase in corporate transparency and accountability can have a significant, positive impact on your professional relationship with your staff, too, as well as demonstrating to current and potential customers the fact that you take the security of their data, and the productiveness of their consumer experience, very seriously. Indeed, with digital audit trails in Contract Management Software, your business is prepared and ready for any eventuality and scrutiny, while taking a pro-active approach to growth, expansion, and improved efficiency in budgeting. In that respect, it is a great addition to your business toolkit.