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Business insolvency rate drops in Scotland

Date Added: 07/01/2013  

New figures have shown that fewer firms based in Scotland are being forced to close down.

Data released by accountancy organisation KPMG shows the number of companies going bust in Scotland dropped in 2012, which is the first time in four years it has done so.

But Blair Nimmo, head of restructuring at the big four accountant in Scotland, warned that the state of the economy means firms are going to remain cautious.

Some may need to take business debt advice in order to ward off the threat of being served with a winding up order in the coming weeks and months.

Speaking to the Herald, Mr Nimmo explained a lot of companies have been able to adapt to the tough financial conditions they have been working with since the start of the recession in 2008.

But despite figures released by KPMG showing that there was a 27 per cent drop in the number of insolvencies in the final quarter of 2012, Mr Nimmo pointed out the economic uncertainty in the UK is still going to weigh heavily on the minds of directors and executives.

"The reduction is not significant enough to indicate the many challenges posed by the current global economic climate have been completely overcome," he said.

Companies struggling to keep their heads above water were advised by the KPMG representative to try to keep a tight leash on costs and to watch their cash at all times.

"Having got this far through five difficult years many Scottish businesses will now hope to survive until growth returns to the economy, but until that time we will continue to see very little speculative investment or transactional activity," he told the newspaper.

Last year saw a lot of big high street names facing financial difficulties and there is speculation 2013 is also going to be tough for retail companies.

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