A leading firm of accountants has claimed that the number of business failures in Scotland dropped in the last quarter; going on to suggest the worst of the downturn could be at an end.
KPMG said that in the first three months of the year, there had been 159 firms going to the wall. This is down from 294 in the first quarter of 2012. It also said that the number of firms entering liquidation was down for 2013, dropping to 122 from 264.
KPMG Scotland’s head of restructuring, Blair Nimmo, said:
“The worst of the market turmoil could be over. Significantly, fewer smaller companies are going out of business year-on-year, while the total number of corporate insolvencies has decreased by a third in the last six months.
“The banks are reporting fewer companies entering their support units and our own clients generally appear in better health.”
Many firms in Scotland have been quick to recognise the changing conditions, and have introduced new financial strategies. Many of those who are eager to reduce debt and credit lines have looked to work with factoring and invoice discounting.
It is something KPMG picked up on, with Nimmo saying:
“I sense that many businesses are accepting that the economy as it stands is unlikely to change materially in the short term – that in effect ‘now is the new norm’ – and have cut their cloth accordingly.”
However, there was also a cautionary note in the findings, which showed that administrations and receiverships, which are more likely to affect larger corporations, had risen from 30 to 37.