Evaluating the Financial Health of Your Business
Understanding the financial health of your business is essential for long-term success. At Long + Cowan Chartered Accountants, we help Wellington businesses build stronger financial foundations through professional Financial Advice, strategic Financial Planning and proactive Business Advice.
Our office, located at Level 2, 276 Lambton Quay in Wellington Central, supports clients across all surrounding suburbs. We work with business owners to reduce financial stress by providing practical tools, insights and strategies to improve profitability and resilience.
While it is easy to check a bank balance or monitor transactions online, true financial awareness comes from accurate record-keeping and long-term planning. Reliable records provide the foundation for business decisions and future growth. A clear understanding of your financial position gives you the confidence to manage uncertainty, adapt to change and prepare for opportunities.
Planning for the Future – Why a Business Plan Matters
For any business, proper planning is the first step toward financial control. Most firms develop budgets that estimate expected income and expenditure for the year ahead. A realistic budget should not just predict numbers; it should also reflect your goals, market opportunities and challenges.
To create an accurate budget, every business needs a comprehensive Business Plan. This plan outlines how the company intends to operate and grow, and it provides a roadmap for achieving profitability.
In today’s unpredictable environment, detailed business planning is more important than ever. Economic fluctuations, workforce challenges and shifting costs can all impact your ability to meet objectives. A well-prepared business plan allows you to take a proactive approach rather than reacting to changes as they occur.
When developing a business plan, key considerations should include:
- How your business will attract and retain customers
- Operational and financial strategies to support growth
- Adapting to new competitors or emerging market trends
- Required capital expenditure and available resources
- Borrowing needs and repayment strategies
Time spent developing a clear business plan – supported by a detailed, cash-based budget – is always time well invested. It creates structure, strengthens financial forecasting and helps align every decision with your long-term objectives.
If you need professional guidance to develop a plan that works for your business, contact us for more info by filling in an enquiry form or e-mailing or calling us during office hours to arrange a confidential discussion with our Wellington team.
Is a Bank Statement Enough to Measure Financial Health?
Many business owners rely solely on their bank statements to track financial performance. While this provides a snapshot of cash movements, it does not offer the full picture.
A Cash Flow Statement gives a broader view of how money flows in and out of your business. It presents income and expenses by category, usually monthly, and compares actual results with planned figures from your budget. The variance between planned and actual performance highlights where adjustments may be needed.
For small firms and sole traders, a cash flow statement may be sufficient to manage short-term finances. However, larger organisations with more complex operations require additional oversight. Without a detailed understanding of your cash flow, unexpected expenses or delayed payments can cause financial strain, disrupt operations or force reliance on overdraft facilities.
This is where accrual accounting becomes vital. Unlike cash accounting, which records transactions only when money changes hands, accrual accounting records income and expenses when they are earned or incurred. This provides a clearer picture of your true financial position and helps you manage liabilities and receivables more effectively.
Accrual accounting is particularly useful for businesses with multiple projects, deferred payments or significant credit activity. It allows better forecasting, improved resource allocation and more informed decision-making.
At Long + Cowan Chartered Accountants, we help clients transition smoothly to accrual-based accounting, ensuring compliance, accuracy and clarity. Our qualified accountants use systems like Xero and MYOB Accounting to keep your financial data current, organised and easily accessible.
If you would like expert assistance setting up or refining your accounting processes, contact us for more info by filling in an enquiry form or e-mailing or calling us during office hours and let us help you gain better financial control.
Practical Financial Advice for Wellington Businesses
Our role as your trusted Wellington Chartered Accountants is to simplify financial management and empower you to make better business decisions. We provide professional Financial Planning and Business Advice tailored to your organisation’s size, structure and goals.
Here are key areas where we can assist:
- Budgeting and Forecasting: Building and maintaining practical budgets and forecasts that support decision-making.
- Cash Flow Management: Identifying payment trends, managing receivables and ensuring liquidity.
- Business Planning: Developing strategies to guide your business toward profitability and stability.
- Tax and Compliance: Managing GST, PAYE and income tax obligations efficiently.
- Payroll Processing: Ensuring employees are paid accurately and on time.
- Technology Integration: Implementing cloud-based systems such as Xero and MYOB for efficiency and transparency.
Our goal is to provide you with actionable insight, not just reports. We focus on identifying financial strengths, addressing weaknesses and positioning your business for growth.
By combining our decades of experience with modern accounting tools, we help clients across Wellington reduce risk, improve efficiency and plan for the future with confidence.
To learn more about our tailored Financial Advice and Business Planning solutions, contact us for more info by filling in an enquiry form or e-mailing or calling us during office hours.
