Financial Health Check for NZ Businesses: How to Improve Cash Flow, Profit & Resilience

In today’s complex and fast-moving environment, small and medium-sized enterprises (SMEs) in New Zealand face increasing financial pressure. Rising costs, talent shortages, regulatory change, and digital disruption continue to challenge business owners. Now, more than ever, clarity around your financial position is essential.

At Andersen New Zealand, we support SMEs across a wide range of industries. To meet growing demand for deeper strategic insight, we’ve launched Growth Partner Solutions (GPS) — a dedicated service designed to help SMEs assess, navigate, and improve financial performance. Backed by our wider expertise in Business Advisory, Corporate Finance, Governance, and Tax, GPS empowers business leaders to make confident, data-driven decisions.

A financial health check provides the foundation. Think of it as a “Warrant of Fitness” for your business — diagnosing issues early and identifying opportunities for growth.

1. Start with the Fundamentals — Know Your Numbers

Begin with the three key financial reports:

• Profit & Loss Statement — Review profitability, revenue mix, and cost control. Identify trends and assess margin sustainability.
• Balance Sheet — Examine assets, liabilities, and equity. Evaluate solvency, funding structure, and working capital strength.
• Cash Flow Statement — Understand cash movement. Identify shortfalls or volatility impacting liquidity.

Many SMEs focus on profit, yet overlook balance sheet resilience and cash flow reliability. We use dynamic modelling to stress test different scenarios, helping clients prepare for uncertainty.

2. Test Liquidity and Buffer Strength

Liquidity determines your ability to meet short-term obligations.We assess:

• Current and Quick Ratios
• Cash Reserve Adequacy
• GST, PAYE, and Tax Payment Timing

We build forecasting tools to help clients avoid cash crunches, especially around tax periods or seasonal revenue fluctuations.

3. Evaluate Debt and Funding

With borrowing costs increasing, businesses must regularly assess funding health:

• Debt-to-Equity Ratio
• Debt Servicing Capacity (DSCR)
• Loan Structures and Refinancing Potential

We support clients with debt restructuring, bank negotiations, and alternative funding options.

4. Analyse Margins and Profitability

Profitability measures business efficiency, not just performance:

• Gross and Net Margins
• Cost Allocation Accuracy
• Break-even Points

We guide clients through margin improvement strategies, value-based pricing models, and cost optimisation initiatives.

5. Refine Working Capital Cycles

Poor working capital management impacts cash flow and scalability:

• Debtor and Creditor Days
• Inventory Turnover
• Payment Policies and Automation

Automating debtor management reduces admin burden, improves collection, and enhances liquidity.

6. Stay Ahead of Your Tax Position

Tax obligations affect both cash flow and compliance risk:

• Timely GST, PAYE, and Provisional Tax payments
• Missed tax credit opportunities
• Unmanaged IRD risks and penalties

Early planning improves accuracy and reduces stress. Our tax team works proactively to ensure clients stay compliant and optimise outcomes.

7. Benchmark Against Industry Standards

Understanding performance in context is key:

• Gross margins and cost structures
• Collection cycles and inventory efficiency
• Operating overhead comparisons

We use benchmarking tools to leverage national and industry-specific data to identify gaps and track improvements.

8. Assess Business Risk Beyond the Numbers

Sustainable growth requires operational resilience:

• Customer Concentration
• Supplier Dependencies
• Regulatory or Cyber Risks

Our process to review risk identifies weaknesses in business continuity, revenue diversity, and critical dependencies.

9. Turn Insights into Action

A health check must lead to execution. We work with clients to:

• Prioritise key financial improvements
• Set measurable targets and timelines
• Align forecasts with strategic goals
• Conduct regular reviews

Whether as a sounding board or virtual CFO, we act as a true business partner and stay engaged to ensure progress and accountability.

Final Word

Over 97% of NZ businesses are SMEs (small to medium-sized enterprises). Many of which operate without the clarity or structure required for sustainable growth.

At Andersen, we’re more than accountants — we’re growth partners. Our GPS (Growth Partner Solutions) service integrates our advisory, governance, corporate finance, and tax capabilities to help clients build stronger, more valuable businesses.

We believe informed decisions require clarity. We encourage face-to-face meetings to explain financial statements and performance metrics in clear, practical language. This ensures business owners fully understand their financial position and can act with confidence.

Whether reviewing a forecast, analysing ratios, or adjusting strategy, we simplify complexity and provide ongoing support.

Ready for a check in? Let’s work and grow together to diagnose, strategise, and optimise — so your business doesn’t just survive, it thrives.

Author - Nicolene Botha