Scottish Business Failures on the Rise
19th April 2018.
Scottish business failures rose during the first three months of 2018, compared to the same quarter last year, new figures show.
It seems that even outside the capital, businesses are struggling to stay afloat. According to new figures released by the professional services firm, KMPG, in the first quarter of this year, the total number of business insolvency appointments in Scotland increased by 38 percent to 233.
This comes days after accountancy firm, Campbell Dallas, announced that Scotland’s construction industry was facing unprecedented problems. Political pressures, as well as the damage inflicted from the recent bout of bad weather, has hit the construction industry hard. While the overall economic picture is improving, Scottish and English businesses need to ensure they’re prepared for any further economic downturns.
Whether you’re far up North, or way down South, the whole business community should do what they can to keep doors open. Business costs are up, and morale is down, but freeing up cash flow is a solution that can easily be accomplished. At the Credit Protection Association, our debt recovery services chase down unpaid invoices on our members’ behalf and supply financial freedom or simply the opportunity to trade another day.
While corporate insolvencies saw an increase at the start of the year, KMPG insists that the overall business landscape is stable. Compared to the previous year, the total number of insolvencies fell by five percent, illustrating a small- but clear- improvement.
Furthermore, the research found that liquidations, which tend to affect smaller businesses, fell by 4 percent, while administrations, which usually involve larger organisations, decreased by 15 percent.
Blair Nimmo, global head of restructuring for KPMG, said: “Although corporate insolvencies increased in Q1 compared to the same period last year, the statistics don’t reflect the wider picture. The end of 2017 saw corporate insolvencies at an eight-year low – an achievement, considering long-running levels of uncertainty coupled with wider global pressures – and so these figures need to be put into context.
“On the whole, insolvencies are falling compared to the previous 12 months and generally fall in line with what are relatively normal attrition rates.
“Nevertheless, sectoral challenges remain. Retail and casual dining must evolve due to cost increases and changes in consumer spending habits due to pressures on household incomes squeezed by inflation and relatively stagnant wages. Many businesses rely on the festive period to boost sales, but even so, some well-established brands have had to face significant branch closures in recent months as a result of those challenges.
He added that the construction industry, which is often seen as a bellwether for the wider economy also faces pressures. But demand for building services remains high and he expects the sector to continue growing.
He said: “Overall in Scotland, I sense that most businesses are adopting a fairly cautious strategy in light of political and economic uncertainty.”
The business world is inherently unstable at present. Whether you are a business owner or an employee, your professional position is anything but secure. While some businesses have surrendered at the first sign of falling profits or the first unpaid invoice, this is premature and there are ways to survive this tough climate. Highly publicised failures such as Carillion and Toys r Us are caused by poor management of finances and can be resolved by approaching a third party for aid.
Here at the Credit Protection Association, while our debt recovery services get our members paid, our credit checks and company directories ensure our members know exactly who they’re doing business with. Without the correct credit checks and credit application forms, any extra cash recovered will be threatened by more bad payers and even swindlers.
Before being reduced to another statistic, approach CPA for help and advice.
Not only does our team free up cash flow and spring clean finances, we also have a special scheme using a little-used legislation that helps business owners realise a hidden source of cash and unlock hidden potential within their business.
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
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