KB186 : What is Audit Trail Feature ? What Are The Core Aspects Of Audit Trail in Business Central?

KB186 : What is Audit Trail Feature ? What Are The Core Aspects Of Audit Trail in Business Central?

KB186 : What is Audit Trail Feature ? What Are The Core Aspects Of Audit Trail in Business Central? Shrutidhara

The Audit trail feature in Business Central provides organizations an edge over those using other ERP software. It seamlessly maintains all their relevant data related to the historical or past financial transactions in the integrated database. While on the one hand, it facilitates proper traceability. On the other hand, it ensures better audit compliance.

Why is the Audit Trail feature in News?

As per the recent amendment notification issued by the Ministry of Corporate Affairs, all the businesses falling under its purview must use the audit trail feature in their accounting software. Moreover, this will come into force from 1st April 2022.

Therefore, businesses using accounting software for maintaining books of account must follow the points mentioned below as part of their audit trail feature.

  • Recording the audit trail of every transaction.
  • To ensure that they do not  disable the audit trail feature.
  • Creating an edit log of every change they make in the book of accounts.
  • To capture the date whenever they make such changes (Edits) in the book of accounts.

Additionally, as per the rule, businesses must also ensure that

  • They use the audit trail feature for all transactions they record in their software throughout the year.
  • They should preserve the edit log feature and not tamper with it.

Audit Trail: A Welcome Move by the Government

The recent amendment notification is a significant step as it aims to promote corporate transparency & increase business accountability. Moreover, it also aims to deal with unrecorded transactions and curb fraud.

However, there is a lack of clarity among businesses regarding the government’s modalities of this latest move.

Therefore, this blog explores how businesses can conform to the new rules by opting for Microsoft Dynamics 365 Business Central as their preferred ERP Solution. Nevertheless, before diving deeper, let us look at the Audit trail and why it is crucial.

What is Audit Trail?

An audit trail is a step-by-step procedure for tracking all the activities related to financial transactions. Moreover, it offers a detailed history of the financial transactions of a business,  Similarly, it also provides essential details like transaction types, date, time, user information associated with a particular transaction.

Why is Audit Trail Important?

Audit trail helps businesses in maintaining transparency & operational integrity. Moreover, it validates their actions & ensures audit compliance. Further, it also allows them to assess their current financial health, future budget planning, risk management, etc.

Core Aspects of Audit Trail in Business Central


As the name suggests, it is the basis of an organization’s financial system and maintains a record of debit and credit entries. In addition, it stores all the financial data in a structured manner for creating financial statements. Moreover, it supports the audit trail feature in Business Central by streamlining the financial processes. Likewise, it keeps businesses well-informed regarding their revenues, assets, liabilities, etc.


Chart of Accounts is an index of all the financial data that businesses store in the General Ledger. It is an important  part of the Audit trail feature in Business Central and allows businesses to track their transactions. Moreover, they can do so by adding segments in these accounts known as “Financial Dimensions,” such as department, cost center, Purpose, etc. At the same time, they can also use the user-defined rules known as “Account Structures” and “Advanced Rules .”As a result, they can easily determine how to connect  financial dimensions  to the main accounts and the other financial dimensions. It also allows them to understand how these transactions are being entered into the system.


It is the foundation for the audit trail feature in Business Central. It is a highly crucial feature and indicates where an entry was created. Moreover, it allows businesses to make entries in financial statements by posting journals, orders, invoices, or credit memos and executing various batch jobs. Further, it automatically assigns all the posted entries to a specific source code. As a result, businesses can trace every transaction to its origin and record it.


It supplements the source code and is also a very important part of the Audit trail feature in Business Central. Moreover, it indicates why an entry was created. Besides, It allows businesses to assign reason codes on individual entries.  Further, it also enables them to assign permanent codes to specific journal templates and journal batches.  As a result,when a reason code is linked to a journal line or a sales or purchase header, all entries are marked with the reason code when they are posted. Additionally, the reason code is copied to each general ledger, customer, and vendor entry when the invoice is posted. This allows posted ledger entries to be filtered by reason code & provides better financial visibility.


Change log is yet another significant aspect of the audit trail feature in Business Central. It captures and records vital information regarding all types of data changes. Moreover, it allows businesses to list changes in chronological order and arrange the financial data in columns. They can do so easily by indicating identifiers, modifications, and dates. Besides, businesses can record the changes in the log once a user’s session expires. As a result, they can effectively track the source of errors in the data or changes to the data.


 Like the Change Log Entries, it includes important information about each change such as – Date and time, User ID, Source Code, Journal batch name, Entry Numbers that correlate G/L Registers entries with the actual general ledger. Doing so enables businesses to generate & export reports and keep a record of the relevant data.

Role of Dhyey Consulting

As a Top ERP & CRM Provider in Vadodara, Gujarat, we are well versed with all the latest government legislations & can help you in embracing features like an Audit trail for ensuring better compliance.

Our team works round the clock to assist businesses in their growth journey. So if your company is looking for ERP services in Vadodara or anywhere in India or around the globe, drop us an email at enquiry@dhyey.com. Our team will be glad to set up a free demo for your brand.