The number of companies going into receivership has fallen but more businesses are wanting advice on how to avoid financial trouble, according to one of the country's top receivers.
William Black, a partner at McGrathNicol who handled the South Canterbury Finance receivership, said there had been a decline in companies going to the wall in the past nine to 12 months.
"It's not a sudden occurrence ... but it is swinging more to the advisory side."
Black said the switch reflected a slow economic recovery which was also seen in lower provisioning being set aside by the banks.
Black said a lot of companies had accepted tougher times as the new normal but some still had not recognised the situation.
"It is a new environment we are in."
Black said those sectors still struggling included parts of the retail industry, print and some parts of the agricultural sector.
"There are some pockets of dairy which have got issues but it's more outside of that in aquaculture and viticulture."
Last month, popular wedding and event venue Ascension Wine Estate was placed into receivership. The Matakana winery, with a CV of $2.3 million for land and buildings, has been put up for sale
Black said the biggest red flag that pointed to a company struggling was its cashflow.
"Businesses that have cash don't tend to fail."
How a company managed its working capital was critical, he said. A key part was ensuring financial reporting was up to scratch.
"If you haven't got a set of numbers you can rely on, how can you really be on the pulse of the business?
"What is quite surprising is the number of businesses, even of a size, which don't have sufficient or robust reporting."
When economic conditions were strong, businesses did not need to have much of a focus on cashflow, he said.
"Those things tend to come to light when the economic cycle turns."
Black said a lot also came back to planning for the unexpected.
Another area businesses should focus on was managing debtors and creditors.
"That is where we see companies are not as effective as they could be. Do they really understand the cycle of cash through the business?"
Black said there could be no doubt there was a cost associated with managing debtors. But he said the more a business could systemise it, the less effort it required.
He also warned businesses to be careful about being too exposed to one particular customer.
"It's hard; when you have a good customer you want to look after them, at the same time you've got to be mindful of concentration risk."