Financial examination or financial check-up This is something that is needed to ensure that financial flows take place in a healthy manner. Both his goals for personal and company finances will have a big impact on the future.
Through financial audits, it will be known what expenditure items need to be reduced and what must be eliminated. Through this examination, the economic condition of each person or group can be more stable and healthy and avoid losses.
We have some information about the benefits and how to carry out a good and appropriate examination. We will summarize all this information in the discussion below!
Definition of Financial Check Up
Financial check upis a routine examination of financial conditions within a certain period of time, generally within a 12 month period. The examination carried out applies to expenses, debts, assets, investments and various types of assets.
Financial checks should be carried out as regularly as possible to ensure there is no excessive spending or other actions. The more frequently inspections are carried out, the faster resolution will be made when there is a problem.
Personal and group financial stability will be better if a strict evaluation is carried out. Consistency in financial audits is the key to avoiding losses.
Benefits of Financial Check Up
Routine and thorough financial checks provide many benefits for both individuals and companies. We will try to explain these benefit points in the following discussion:
- Controlling Financial Flows
Examination of personal and group financial flows plays an important role as a reference for appropriate control. The more precise the financial information, the more precise the decision to reduce or add, or even eliminate expenditure items.
The source of financial records is the most valid tool in assessing personal and group financial flows. You can control it yourself or ask for analysis from a professional. - Makes Saving Goals Easier
Saving can be done if financial control is good and regular checks are one effort to realize this control. The more consistent you are in control, the more focused your expenditure items will be so that your savings can become an emergency fund in the future.
Saving can save yourself from anything urgent in the future. Various unexpected things, such as disease outbreaks, global crises, and so on can be handled through savings. - Making the Right Decision
Even in business or for personal purposes, decisions regarding finances are sensitive. Making the wrong decision will lead to long-term losses. Luckily, if you carry out checks diligently, these losses can be avoided.
It is not impossible that through good financial control, you will actually discover the fact that you can go on holiday abroad every year. As long as you reduce unnecessary expenses, it is not impossible to get better rewards. - Understanding Financial Conditions
The most common benefit underlying the income of various other benefits is understanding your financial condition as a whole. By understanding financial conditions, control and decision making will become more effective.
The four benefits above are some of the things you can get when you carry out routine financial checks. Of course, there are other undeniable benefits, namely avoiding stress because there is no such thing as financial difficulties.
How to Do a Financial Check Up
Based on the various benefits that we have explained previously, it is certainly enough to motivate you to carry out regular financial checks. It's not difficult to do because you just need to do the following:
- Recording Income and Expenditures
The most important thing to note is routine income and expenses or those that only occur once or twice during the year. If possible, recording expenses and income must include evidence, especially if it involves business matters.
The existence of evidence can provide full proof or strength for the nominal value recorded. Don't forget to include the transaction date to make it easier when carrying out monthly or annual recapitulations. - Record All Assets
The assets owned are not only cash, but also various assets in the form of land, objects, and so on. Recording these assets is useful for monitoring annual price increases.
Some assets may experience depreciation so that their value decreases, say vehicles or machinery. The more often it is used, the more its value decreases and this means reducing the number of assets you own. - Record All Debts
Other notes that must be included in financial reports are debts or loans to external parties. Various other people's debts to you must also be recorded neatly to find out how much assets are owed to outside parties.
At the time of repayment, the debt record must be deleted so as not to deceive the overall financial report. Just like income and expenses, debts should also be recorded along with the dates of borrowing transactions and repayment.
Financial check upor checking finances owned by individuals and companies provides many benefits. The series of benefits are related to the following points:
- Control financial flows well.
- Saving becomes easier.
- The right decision making tool.
- Able to understand financial conditions well.
Meanwhile, to get the series of benefits above, there are several ways to deal with it. The ways to manage finances well include:
- Record routine income and expenses.
- Record regularly all assets owned.
- Record all debts and receivables.
Healthy financial conditions make prosperity easier to achieve, but it takes effort and consistency to make it happen. The stricter and more routine financial checks are carried out, the more prosperity will be achieved in financial terms.
