Audit Trail and Record Keeping

Maintaining a complete and accurate audit trail is essential for Spanish tax compliance and good business practice. Factumo automatically tracks every action, change, and transaction in your account, creating an unalterable record that satisfies tax authority requirements and protects your business.

What Is an Audit Trail?

An audit trail is a complete, chronological record of all activities and changes in your invoicing system. Think of it as a detailed history book that answers critical questions:

• Who performed each action?
• What did they do?
• When did it happen?
• Why was it done?
• What changed as a result?

This record is crucial for tax compliance, fraud prevention, dispute resolution, and business transparency.

Why Audit Trails Matter

Spanish Tax Compliance

Spanish tax law requires businesses to maintain detailed records that demonstrate:

Invoice integrity: Proof that invoices haven't been altered or deleted improperly.

Sequential numbering compliance: Evidence that invoice numbers follow legal sequential requirements without gaps or duplicates.

VAT reporting accuracy: Documentation showing how VAT amounts were calculated and reported.

Retention compliance: Records proving you've maintained required documentation for at least 7 years.

Transparency for inspections: Complete history available when tax authorities conduct audits.

During a tax audit, inspectors will examine your records to verify compliance. A complete, automatic audit trail makes these inspections straightforward and demonstrates your commitment to proper record-keeping.

Business Benefits Beyond Compliance

Fraud prevention: Detect unauthorized access or suspicious activity immediately.

Dispute resolution: Resolve client disagreements with concrete evidence of what was invoiced and when.

Team accountability: Track which team members perform which actions, especially in multi-user accounts.

Error identification: Quickly identify when mistakes occurred and trace them to their source.

Process improvement: Analyze patterns in your invoicing workflow to optimize efficiency.

Client transparency: Provide clients with complete payment and invoice histories when requested.

What Factumo's Audit Trail Tracks

Factumo automatically records every significant action in your account. Here's what gets tracked:

Invoice Creation and Modification

Invoice created:

• Who created the invoice
• Date and time of creation
• Initial status (Draft or Finalized)
• Invoice number assigned
• Client information
• Total amount

Invoice modified:

• Who made the change
• What fields were changed (before and after values)
• Date and time of modification
• Reason for modification (if provided)

Status changes:

• Draft to Finalized
• Marked as Sent
• Payment status updates
• Void/cancelled invoices

Important: Once an invoice is finalized, Factumo restricts modifications to maintain compliance. The audit trail records any attempted changes and why they were blocked.

Credit Notes and Corrections

Credit note created:

• Who issued the credit note
• Which invoice it references
• Reason for credit note (correction, cancellation, discount)
• Amount credited
• Date and time

Invoice corrections:

• Original invoice details
• Corrected invoice details
• Link between correction and original
• Justification for correction

This creates a clear chain of evidence showing how errors were corrected properly according to Spanish regulations.

Payment Records

Payment received:

• Date payment received
• Amount paid (full or partial)
• Payment method (bank transfer, cash, card, etc.)
• Payment reference number
• Who recorded the payment
• Any payment notes

Payment modified or deleted:

• Original payment details
• Reason for modification
• Who made the change
• Date and time of change

Overdue tracking:

• When invoice became overdue
• Reminder actions taken
• Client communications sent

This payment history is crucial for financial reconciliation and proving income for tax purposes.

User Actions

In multi-user accounts, Factumo tracks which team member performs each action:

User login activity:

• Successful logins
• Failed login attempts
• Login location and IP address
• Session duration

Permission changes:

• User added to account
• Permission levels modified
• User removed from account
• Who authorized the change

Account settings modified:

• Company information updates
• Invoice numbering changes
• Tax settings modifications
• Branding changes

This user-level tracking provides accountability and helps identify unauthorized access.

Document Actions

Invoice sent to client:

• Date and time sent
• Email address used
• Delivery status (sent, opened, bounced)
• Who initiated sending

Invoice downloaded:

• Who downloaded the invoice
• Date and time
• Format (PDF, CSV, etc.)

Reports generated:

• What report was generated
• Date range included
• Who generated it
• Export format

Deletion Attempts and Blocked Actions

Critical for compliance: Factumo doesn't allow deletion of finalized invoices, but it records when someone attempts to delete one:

Deletion attempt recorded:

• Who attempted deletion
• Which invoice they tried to delete
• Date and time of attempt
• System response (blocked)

This prevents fraudulent record manipulation while maintaining a record of any attempts.

Viewing Your Audit Trail in Factumo

Factumo makes it easy to access and review your audit trail.

Accessing Invoice-Specific History

For individual invoices:

1. Open any invoice from your invoices list
2. Click the Activity tab
3. View complete chronological history

You'll see:

• Every action taken on this invoice
• Who performed each action
• Timestamps for all activities
• Status changes
• Payment records
• Email communications

Accessing Account-Wide Audit Log

For complete account activity:

1. Go to Settings → Audit Log
2. View all actions across your entire account
3. Filter by:
   • Date range
   • User (team member)
   • Action type (invoice created, payment recorded, etc.)
   • Specific invoice numbers
   • Client names

Understanding Audit Entries

Each audit entry includes:

Timestamp: Exact date and time (down to the second) when action occurred.

User: Which team member performed the action (or "System" for automatic actions).

Action type: What happened (created, modified, deleted, sent, paid, etc.).

Target: What was affected (invoice number, client name, setting changed).

Details: Specific information about the change (before/after values, amounts, etc.).

IP address: Where the action originated (useful for security).

Example audit entry:

2025-03-15 14:32:18
User: María García (maria@example.com)
Action: Invoice Finalized
Target: Invoice FAC-2025-0342
Details: Status changed from "Draft" to "Finalized"
Amount: €1,815.00 (Base: €1,500.00, VAT 21%: €315.00)
Client: Tecnologías Web SL (CIF B12345678)
IP: 192.168.1.105

Exporting Audit Trails

For tax audits or external review:

1. Go to Settings → Audit Log
2. Select date range
3. Choose export format:
   • PDF - Human-readable report
   • CSV - Spreadsheet for analysis
   • JSON - Machine-readable format
4. Click Export Audit Trail

The exported file includes complete details of all tracked activities during the selected period.

What Tax Inspectors Look For

Understanding what tax authorities examine helps you appreciate why audit trails matter.

Sequential Invoice Numbering

What they check: Inspectors verify that invoice numbers are truly sequential without gaps.

How audit trail helps: Factumo's audit trail shows:

• Every invoice created
• Sequential number assignment
• No deleted invoices (only credit notes for corrections)
• Chronological consistency between numbers and dates

Red flags they watch for:

• Missing invoice numbers in sequence
• Duplicated invoice numbers
• Non-chronological invoice dates
• Evidence of deleted invoices

Invoice Modifications

What they check: Whether finalized invoices have been improperly altered.

How audit trail helps: Complete record of:

• Original invoice data at time of finalization
• Any modification attempts (which are blocked)
• Proper correction procedures using credit notes
• Clear audit chain for legitimate changes

Red flags they watch for:

• Changes to finalized invoices without proper credit notes
• Altered amounts or VAT calculations
• Modified dates or client information after finalization
• Missing documentation for corrections

VAT Reporting Accuracy

What they check: That reported VAT matches actual invoices issued.

How audit trail helps:

• Complete record of all invoices in each period
• VAT calculations for each invoice
• Payment status of invoices
• Credit notes reducing VAT obligations

Red flags they watch for:

• Invoices missing from VAT declarations
• Incorrect VAT calculations
• Timing differences between invoice dates and reporting periods
• Unrecorded credit notes

Payment Reconciliation

What they check: That reported income matches actual payments received.

How audit trail helps:

• Payment receipt dates
• Payment amounts
• Payment methods
• Bank reconciliation data

Red flags they watch for:

• Unreported cash payments
• Discrepancies between invoiced and received amounts
• Missing payment documentation
• Suspicious payment patterns

Record Retention

What they check: That you've maintained complete records for the legally required 7 years.

How audit trail helps:

• Permanent storage of all invoice data
• Unalterable historical records
• Complete documentation chain
• Easy retrieval of historical information

Red flags they watch for:

• Missing historical invoices
• Incomplete records for earlier periods
• Inability to produce requested documentation
• Evidence of deleted or lost records

How Factumo Automatically Maintains Audit Trail

You don't need to do anything special - Factumo handles audit trail creation automatically.

Automatic Recording

Every action in Factumo triggers automatic audit trail recording:

No manual work: You don't create audit entries; they're generated automatically.

Real-time capture: Actions are recorded the instant they occur.

Complete coverage: Nothing slips through; every significant action is tracked.

User attribution: Multi-user accounts automatically track who did what.

Unalterable Records

Once created, audit trail entries cannot be modified or deleted:

Immutable data: Even account administrators cannot change audit records.

Tamper-proof: Cryptographic techniques ensure data integrity.

Permanent retention: Audit trails are stored indefinitely (exceeding 7-year legal requirement).

Verifiable: Tax authorities can confirm records haven't been altered.

This immutability is crucial for legal compliance and establishing trust during audits.

Secure Storage

Audit trail data is protected with enterprise-grade security:

Encrypted storage: All audit data encrypted at rest and in transit.

Redundant backups: Multiple geographic backups prevent data loss.

Access controls: Only authorized users can view audit trails.

ISO-compliant: Storage meets international security standards.

Always Available

Your audit trail is accessible whenever you need it:

Instant access: View audit trails anytime from your Factumo account.

Fast searching: Filter and search through years of records in seconds.

Easy exporting: Generate reports for accountants or tax authorities.

No additional cost: Audit trail is included in all Factumo plans.

Audit Trail and Verifactu Compliance

As Spain implements Verifactu (2025-2026), audit trail requirements become even more important.

Enhanced Tracking Requirements

Verifactu will require:

Digital signature tracking: Record of cryptographic signatures applied to each invoice.

Real-time reporting confirmation: Proof that invoice data was transmitted to tax authorities.

QR code generation: Documentation of verification codes created.

Certificate usage: Tracking of digital certificates used for signing.

Transmission failures: Records of any reporting failures and how they were resolved.

Factumo will automatically track all these Verifactu-specific elements when the regulation takes effect.

Continuous Compliance Monitoring

With Verifactu, audit trails enable:

Automated compliance checking: System verifies all invoices meet requirements.

Real-time alerts: Notification of any compliance issues immediately.

Proactive correction: Identify and fix problems before they become audit findings.

Complete documentation: Comprehensive records for proving compliance.

Best Practices for Using Audit Trails

Regular Reviews

Even though audit trails are automatic, periodic reviews are valuable:

Monthly spot checks: Review recent activity to ensure everything looks normal.

Quarterly reviews: More thorough examination of patterns and trends.

Annual audits: Comprehensive review before tax season.

After team changes: Check activity when team members join or leave.

Team Training

Educate your team about audit trails:

Transparency: Explain that all actions are tracked.

Accountability: Ensure team members understand their actions are recorded.

Compliance: Train staff on proper procedures that create clean audit trails.

Error handling: Teach correct methods for handling mistakes (credit notes, not modifications).

Use Audit Trails Proactively

Don't wait for audits to use your audit trail:

Dispute resolution: When clients question invoices, show them the complete history.

Process improvement: Analyze patterns to optimize your invoicing workflow.

Financial reconciliation: Use payment records to match against bank statements.

Client service: Provide detailed payment histories when clients request them.

Document Unusual Situations

When unusual circumstances occur:

Add notes: Use Factumo's notes feature to explain unusual situations.

Keep supporting documentation: Store related documents with invoices.

Clear communication: Ensure audit trail shows clear reasoning for unusual actions.

Consult advisors: For complex situations, document advice received.

Common Audit Trail Questions

Can I delete old audit trail entries?

No. Audit trail entries are permanent and cannot be deleted. This immutability is essential for legal compliance and establishing trust.

What if I made a mistake on an invoice?

Finalized invoices cannot be modified. Create a credit note to correct the error, then issue a new corrected invoice. The audit trail will show the complete correction process.

Can I see what my team members are doing?

Yes. Account administrators can view all user actions through the audit trail, filtered by specific team members.

How long does Factumo keep audit trail data?

Indefinitely. While Spanish law requires 7 years, Factumo maintains audit trails permanently.

Will tax authorities have direct access to my audit trail?

No. Only you control your Factumo account. During audits, you can export and provide audit trail reports to tax authorities.

What happens if someone tries to delete a finalized invoice?

The deletion is blocked, and the attempt is recorded in the audit trail. The invoice remains intact and unaltered.

Can I customize what gets tracked?

No. Factumo tracks all significant actions automatically to ensure complete compliance. You cannot disable or customize audit trail recording.

How do I prove my audit trail hasn't been tampered with?

Factumo uses cryptographic techniques to ensure audit trail integrity. During audits, we can provide verification that records are unaltered.

Audit Trails and GDPR

While maintaining compliance with tax law, Factumo also respects data protection regulations.

Personal Data in Audit Trails

Audit trails contain personal data:

• User names and email addresses
• Client names and information
• IP addresses
• Action details

GDPR Compliance

Lawful basis: Audit trails are maintained for legal compliance (tax law requirements).

Data minimization: Only necessary information is recorded.

Security: Audit data protected with strong encryption and access controls.

Retention: Records kept as required by tax law (7+ years).

Access rights: Users can request copies of audit entries concerning them.

Right to Erasure Limitations

Under GDPR, individuals can request data deletion ("right to be forgotten"), but:

Tax law exception: Spanish tax law requires 7-year retention, which overrides deletion requests during this period.

Audit trail integrity: Deleting audit entries would violate tax compliance requirements.

After retention period: Personal data in audit trails older than required can be anonymized.

See our Data Retention Guide for more about balancing tax law and GDPR.

Preparing for Tax Audits

When tax authorities notify you of an audit, your audit trail is your best defense.

Immediate Steps

1. Notify your accountant or tax advisor about the audit.
2. Export complete audit trail for the audit period.
3. Review audit trail yourself to understand your records.
4. Gather supporting documentation referenced in audit trail.
5. Prepare explanations for any unusual entries.

What to Provide

Tax inspectors may request:

Invoice registers: Complete list of all invoices issued (export from Factumo).

Specific invoices: Individual invoice details and PDFs.

Correction documentation: Credit notes and reasons for corrections.

Payment records: Proof of payments received.

Audit trail: Complete activity log showing all actions.

Factumo makes this easy: All required information can be exported directly from your account.

During the Audit

Be cooperative: Provide requested information promptly.

Be organized: Use Factumo's filtering and export features to provide exactly what's requested.

Be honest: If there were errors, show how they were corrected properly using credit notes.

Let the audit trail speak: The automatic, unalterable records demonstrate compliance better than explanations.

After the Audit

Document findings: Keep copies of audit reports and any requests made.

Implement improvements: If inspectors suggest process improvements, document changes.

Update procedures: Adjust your workflows based on lessons learned.

Inform your team: Share key findings with relevant team members.

Next Steps

Learn more about compliance and record-keeping:

• Data Retention - 7-year storage requirements and best practices
• Verifactu - Upcoming e-invoicing regulations (2025-2026)
• Spanish Requirements - Legal invoicing requirements
• Managing Invoices - How to handle corrections and changes

Summary

Factumo's automatic audit trail provides:

• Complete transparency into all account activities
• Tax compliance meeting Spanish legal requirements
• Fraud prevention through immutable records
• Team accountability with user-level tracking
• Audit preparedness with easy access and export
• Peace of mind knowing your records are secure and complete

You don't need to think about maintaining audit trails - Factumo handles it automatically, ensuring your business stays compliant and protected.

Questions about audit trails? Contact support at support@factumo.com or consult your tax advisor for specific situations.