The requirements traceability matrix provides a context to the development team and sets expectations & goals for the testing team.

Requirements tracing is bi-directional.

Forward tracing: Requirements are traced forward to test cases, test execution, and test results
Back tracing: Features/functions are traced back to their source, typically a business requirement
What is the need for a Requirements traceability matrix?

Why Description

To ensure compliance All specified requirements have been met and final deliverables can be traced back to a business need. It also makes sure that every requirement is accounted for.

Helpful in analysis and design Requirements traceability ensures that each business need has been translated to a requirement, which further transforms into technical specifications, and then resulting in a deliverable.
Change impact analysis In case of any requirement changes, traceability helps in finding the affected workflow, design, and impacted test cases.

Ensures comprehensive test coverage Requirement traceability ensures that the right test cases, which are mapped to the requirement under test, are executed. This further improves the test coverage since all the test cases are accounted for.

Helps in optimizing the testing process Not all test cases that have been generated need to be executed in case there are any changes. Traceability aids in identifying impacted parts and relevant test cases can then be executed, thus resulting in an optimal test process.

Aids in keeping track of project progress Analysis of the requirements and the test results, and tracing it back to origins, helps in keeping track of how far the project has progressed. It also helps in keeping tabs on reality checks whether the timelines will be practically met or not.

Decision-making and analysis Any changes in the business need to have a direct impact on requirements, which further propagates to the development and testing process. Requirement traceability helps in isolating the impacted requirements, thus identifying and updating the test cases associated with them. It makes it easier for the teams to analyze the impact of the change across the board.

Faster time to market Requirements traceability accelerates the overall development process, thus speeding up the release cycles. The number of defects is inversely proportional to requirements traceability. As the traceability increases, the defect rate goes down, simply because it becomes easier for the development team to understand and relate, and for the testing team to understand the context and scope of testing.

Increased customer confidence Requirements traceability helps in gaining and maintaining customers’ trust and confidence by increased transparency. Customers can be assured in the knowledge that all their business needs have been accounted for and are traceable to a fully functional and high-quality end product. Read this Blog: Requirement traceability matrix
https://www.webomates.com/blog/software-requirement-metrics/9-reasons-why-requirements-traceability-is-important-in-agile/