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Late invoice payment contributes to engineering firm collapse

Category: Scotland Business News — Mark on August 20, 2013

A Shetland-based engineering firm has entered administration, with the late payment of invoices cited as a significant factor in its collapse.

The failure of civil engineering company MK Leslie will see more than 50 jobs lost across the firm’s two sites.

The company has struggled to cope with falling demand since the recession. It has also suffered considerably from the late payment of invoices from other firms which have also gone to the wall.

It is a growing trend across the UK, as firms struggle to manage their cash flow.

However, many businesses which are struggling to maintain operational cash have introduced new strategies to provide boosts.

New commercial finance opportunities have been effective, for example, with a number of firms working with factoring companies in Scotland.
For MK Leslie, new contracts becoming harder to win and existing contracts not being renewed has been catastrophic, however.

The news leaves 30 staff employed at Scalloway and another 25 at Dalcross, near Inverness, facing up to redundancy.

The fact that the collapse comes in the firm’s 20th year of operation will be even more galling for directors and staff.

Employees working at the Dalcross Industrial Estate are to be given assistance to find new positions as soon as possible. Working with local recruitment agencies and Pace and Skills Development Scotland, it is hoped many will find suitable employment.

However, details of the assistance available to Scalloway staff are a little less clear, though a small number will be retained to work on ongoing contracts.

'Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.

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