A traceability matrix is a document, usually in the form of a table, that connects any two documents that require a many-to-many relationship to determine the completeness of the relationship.
Traceability Matrix can be established using a variety of tools including requirements management software, databases, spreadsheets, or even with tables or hyperlinks in a word processor.
Traceability also provides the basis for test planning. Test cases are associated with the requirements on which they are based and the product to be tested against the requirement. Traceability ensures completeness, that all lower level requirements come from higher level requirements, and that all higher level requirements are allocated to lower level ones.
For requirements tracing and resulting reports to work, the requirements must be of good quality. Requirements of poor quality transfer work to subsequent phases of the SDLC, increasing cost and schedule and creating disputes with the customer.
Below is a simple traceability matrix structure